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.
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