VAT waivers set to boost agriculture

Dr Mgimwa
Decision by Finance Minister, Dr William Mgimwa to waive value added tax (VAT) on irrigation, tractors, farm implements and milk processing products will help growth of the agriculture sector.

The Agriculture Council of Tanzania (ACT) said in a statement that the move has come at the right time following complaints from the private sector relating to a harsh tax regime suffocating the country's economic backbone.

"Whereas the government is very much aware of some unnecessary taxes imposed on farmers, it has been slow to address the issue.

ACT has consistently been pleading with the government to remove disincentive taxes on agriculture because they stifle this industry," ACT's Communications Manager, Cleophas Rwechungura said in a statement.

He said the decision, revealed by Dr Mgimwa in parliament last week, while presenting Finance Bill of 2012/13, will help the industry produce quality products which can be sold to the East African regional market.

Presenting the Bill in parliament last week, Dr Mgimwa said VAT has been waived on agro-nets which are used for covering horticultural crops to protect them against pests and harmful insects but can also be used in covering poultry structures to protect the birds against attacks.

Tractors and farm implements spare parts, irrigation equipment and spare parts, milk products and packaging materials were also included.

"This decision will help address the problem of overhead costs facing our agriculture sector hence increase growth," Dr Mgimwa said.

"ACT expresses gratitude to the government and the Parliamentary Committee on Agriculture, Livestock and Water, for responding positively to its call to remove nuisance taxes.

ACT therefore, urges the farmers and livestock keepers to utilize this opportunity to increase production and quality," Rwechungura said.
Source: The Daily News, http://www.dailynews.co.tz, reported by Finnigan wa Simbeye

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