For the past few years Agricultural Council of Tanzania – ACT has been urging the Government to revisit the taxation regime with a view remove some taxes that suffocate the development of the agricultural industry.
Whereas the Government is very much aware of some unnecessary taxes imposed on farmers, it has been slow to address to issue. ACT has consistently pleaded with the Government to remove disincentive taxes on agriculture because they stifle this industry. Information quoted from the Government Finance Bill of 2012/13 states that the Government has healed this plea. ACT is gratified because this waiving is in line with the zeal to put Agriculture on top of Agenda.
Some items that have enjoyed VAT exemption include:
They are designed and used for covering horticultural crops, thus creating a physical barrier against pests and harmful insects. Their use promotes organic and high-quality crops by eliminating the use of pesticides. They also minimize production cost. Agro-nets can also be used in covering poultry structures to protect the birds against vermin.
- Tractors & farm implements spare parts
Though the Government exempted VAT on imported tractors, the exemption did not cover spare parts, trailers, and tyres. These items are now covered.
- Irrigation equipment and spare parts
Equipment used in irrigation were left out of the exemption bracket. They are now included. These items include plastic pipes, connecting units and nozzles.
- Milk production and packages
VAT on the locally produced milk is now zero-rated. This also includes tax exemption on materials used for packing milk products, such as eggs, milk, butter and cheese.
ACT expresses gratitude to the Government and the Parliamentary Committee on Agriculture, Livestock, and Water, for responding positively to its call to remove obnoxious taxes. ACT, therefore, urges the farmers and livestock keepers to utilize this opportunity to increase production and high-quality products in order to excel in a competition for the ever expanding East African Market.