There is no law barring manufacturers
hosted by Export Processing Zones (EPZs) to supply their products to the
local market provided they pay all the required taxes.
“There is no law or regulation that prohibits EPZA
registered investors from selling their products in the domestic or
local market.
“Contrary to what some business people
might be thinking, both the EPZ and Special Economic Zone (SEZ) Acts are
very clear on modalities for selling in the domestic market,” he
explains.
Under section 22(1) (b) of the EPZ Act, 2006; an EPZ investor
is allowed to sell up to 20 per cent of the manufactured goods in the
domestic market provided that all applicable duties, levies and other
charges are paid.
Further, section 22(1) (2) of the same
Act which empowers EPZA to authorise an investor to sell in the domestic
market above 20 per cent provided that once EPZ goods are sold in the
domestic market, all applicable duties and taxes are paid in full, he
notes.
The exercise of ensuring that applicable
duties and taxes are paid in full is monitored by both EPZA and
Tanzania Revenue Authority (TRA).
He said some businesspeople still
confuse the difference between the EPZ and SEZ schemes. As opposed to
the EPZ scheme which has the 80 per cent export condition on the
manufactured goods, the SEZ scheme, which is also supervised by EPZA,
has no condition for exports.
The SEZ Act under section 27 permits
manufacturers to sell products in the domestic market, and that section
27 is further supported by section 39 which gives incentives to SEZ
investors selling in the domestic market.
It is important to note that
an EPZA investor who has been registered under the SEZ scheme is
permitted by the SEZ law to sell any percentage of his products in the
domestic market.
But there are some companies which have
registered two sister companies; one under Tanzania Investment Centre
(TIC) for domestic and local sales and the other under EPZA for exports.
Goods coming in the country in the form of raw materials designated for
local sales have their separate facilities and are treated separately
under the TIC Act, whereas goods which are meant for export are treated
under the provisions of the EPZ Act.
Such operations are normal and are well
monitored by both EPZA and TRA and have so far not resulted into any
complication. “Business people who are still not clear with EPZA
operations should visit the Authority for clarifications.
The practice of offloading EPZ products
in the domestic market after paying all applicable duties is common in
almost all countries where such schemes are in practice.
“It would have
been unfair to Tanzanians if EPZ manufactured products were barred from
being sold in the domestic market because if there is a unique item
which is being produced by EPZ companies here in the country and the law
prohibited to sell their products in the domestic markets, he
explained.
Dr Meru further notes that it would have
not been wise for Tanzanians in need of such an item to begin searching
for it in foreign countries while it is made at home.
“Business people
especially the small and medium enterprises (SMEs) operators should come
forward and seize investment opportunities in both the EPZ and SEZ
schemes so as to benefit from the incentive packages provided under them
and enjoy the best facilitation services offered by the Authority.
“Tanzanians should not stand back and
watch or complain on the incentives given under the two schemes but
instead, they should come forward and seize the available EPZ and SEZ
opportunities through which their businesses will grow very fast,
thereby contributing to employment creation, income generation, transfer
of new technologies and ultimately to our country’s economic growth,”
he explains.
Source: The Daily News, dailynews.co.tz.reported from Dar es Salaam
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