Dar es Salaam:  The introduction of a number of taxes in the transport sector in the 2013/2014 government budget poses serious threat to the sector, the operators said yesterday. In a presentation to the Parliamentary budget Committee in Dar es Salaam yesterday, the Tanzania Truck Owners Association Chairman, Seif Ally Seif expressed concern that the taxes would not only hurt the sector, but the whole economy. He said currently the transport sector ranks second from fifth position few years ago in terms of its contribution to the GDP following its long struggle in collaboration with the Government and other authorities to remove a number of weaknesses holding back the sector.

However, the recent move by the Government to introduce number of taxes without due consideration to the existing transportation challenges and the need to strengthen Tanzania’s economic advantage in the East African Region, threaten to reverse the gains, negatively impacting on the whole economy.

He cited increased fuel levy during the 2013/2014 budget session, higher rates of insurance, increased road license fees, higher salaries and wages in the transport sector, increased cost of tyres and spares parts and higher Sumatra fees. Other costs are the introduction of withholding tax, increased bank charges and interest costs.

TATOA requested the government to review its decision with regard to imposition of the said taxes by considering the repercussions it has on the national economy and also by considering the economic strength of Tanzania compared to its East African neighbours.

He pointed out that the country’s economic development is highly dependent on growth and development of the transport sector. He pointed out that the sector was a link to and affected the performance of all other economic sectors in the country. “The flood of taxes, signals a national economic disaster,” he warned.

He pointed out that TATOA a few years back initiated a move in which its collaboration with government visited all neighboring countries to market Dar es Salaam Port as a major gateway for cargo to and from those countries, pointing out the advantage of Tanzania’s geographical location.

As a result the performance of Dar es Salaam Port has improved dramatically in the past few years. The country has benefited a lot in terms of economic gains arising from the same.

Responding to TATOA’s presentation, The Chairman of Parliamentary Committee on Economic and Infrastructure, Peter Serukamba wondered why the key ministries like Treasury, Infrastructure, and Transport kept mum, despite being informed about TATOA’s outcry and the need for the government’s swift intervention to solve the hitches.

Serukamba who was attending the meeting in his capacity as the chairman of a key economic sector, said: “Any tax that will not support the country’s economic development is not in our best interest.”

For his part, the Parliamentary Budget Committee Chairman Andrew Chenge, welcomed TATOA’s views and urged the association to make a thorough research on the different tax regimes of the neighbouring sea port nations as well as the decline of clients for Dar es Salaam Port.

Meanwhile the Budget Committee is expected to question the government on its plans to ensure the country’s ports stay competitive in the region following reports that Uganda and Rwanda plan to take their business to Mombasa Port effective next month.

Parliamentary Budget Committee Chairman Andrew Chenge made the remarks during a parliamentary committee meeting yesterday. “Some of the countries are slowly shunning our port. We want to know what the government plans to do about it,” he said noting that expansion of Mozambique’s port is part of this challenge.

Chenge believes that the government must take immediate steps to avert the impending loss of business or the country will suffer a huge economic blow.