HORTI PRODUCERS HAPPY WITH TAX RELIEF

Removal of value added tax (VAT) and skills development levy (SDL) is set to boost horticultural production which earned the country $ 477 million last year in exports.

"We are relieved by measures taken by the government as announced during the Finance minister's speech", remarked the policy and advocacy manager with the Tanzania Horticultural Association (Taha) Anthony Chamanga.

He said the move followed pleas from the industry players and recent announcement on sparing agriculture from the taxes was enough indication of the government's commitment to boost horticulture.   

With improved business environment, the horticultural sector is expected to grow significantly,
with exports estimated to reach US$1 billion in the year 2020.

Agricultural sector was removed from SDL exemption list in July 2013 folllowing Amendment of VETA/Finance Act, a measure which farmers complained increased tax burden on them.

Accordingly, horticultural farmers in Tanzania are spending about 10 per cent of total annual farm revenue to pay different taxes, levies and fees.

"Farming is labour intensive and paying SDL could pose a significant challenge" Mr. Chamanga told reporters, lauding the government for the move.

During her tabling of the 2015/2016 annual budget on June 11th, Finance minister Ms Saada Mkuya said the government has agreed to proposals to reinstate agriculture in the SDL exemption list.

With improved business environment, horticultural sector is expected to grow significantly, with exports estimated to reach $ 1 billion in the year 2020.

The association also lauded the government for reducing land rent to Sh. 5,000 per acre from Sh. 10,000 for urban farming and from Sh. 1,000 to Sh. 400 in the rural areas.

According to Mr. Chamanga, the government has also agreed to scrap VAT on farm inputs such as seeds, fertilizers and agro-chemicals.

In its pleas to the government, Taha teamed up with its partners; Agricultural Council of Tanzania (ACT), Tanzania Private Sector Foundation (TPSF) and SAGCOT Centre Limited.

Horticulture exports from Tanzania hit a record $ 477m last year, up from $ 374m in 2013 and $ 380m in the previous year.

Most of the produce being flowers, cuttings, beans, peas and berries and others were exported to the Netherlands, Belgium, France,, United Kingdom, Canada, Austria and Kenya.

Taha's goal is to reach a yearly export value of $ 1 billion exports with increased investments in the sector. At the association's inception in 2004 exports earned the sector a mere $ 64m.

According to the association's CEO Jacqueline Mkindi between 2005 and 2010 nearly $ 1 bn was channeled by the private investors to commercial horticultural production and trade.

As a result there has been increased employment levels, with over 400,000 people currently employed in horticulture; directly and indirectly and increased market access to farmers.