PUBLISHED ON July 25th, 2014


EAC partners have taken issue with Burundi for introducing new taxes on cigarette imports, terming the decision “discriminatory” and “contrary to the region’s Custom policy.”

In the latest trade spat in the region, Uganda, Kenya, Rwanda and Tanzania say the April decision by Bujumbura to introduce a $0.25 excise duty on every pack of cigarettes imported into the country violated the EAC Customs Union Protocol.

At the just-ended meeting of the Sectoral Council on Trade, Industry, Finance and Investment, Kenya argued that the move by Bujumbura equals a 28 per cent tax on cigarettes imported from regional countries, a move Nairobi sees as inconsistent with the Protocol.

Under the Protocol, partner states should give preferential treatment to products from other EAC countries.

The spat is the latest in a series that has seen EAC member states accuse each other of purposely using tariff and non-tariff barriers to protect their domestic companies from regional competitors.

For example, Kenya has accused Tanzania of discriminating against EABL, while Kampala accuses Nairobi of requiring its sugar manufacturers and exporters to acquire licences from the Kenya Sugar Board before selling the product in the country. This requirement, while consistent with Comesa rules, is against the EAC Treaty.

Tanzania’s Deputy Minister for EAC Co-operation, Abdallah Sadallah said that Burundi needs to borrow a leaf from Tanzania, which trimmed truck road toll fees by 69.6 per cent for Burundi-registered lorries.

Tanzania relaxed and harmonized the road toll fees for Burundi-registered trucks from $500 to $152 per truck in June, to match the fee for the other EAC partner states.

Burundi’s Minister for EAC Affairs Leontine Nzeyimana said the move was critical to the business climate in her country, as it will reduce the cost of doing business there.

“This came at a crucial time for Burundi since consumers and traders have started enjoying the benefits from the decision made by the Tanzanian government,” Ms Nzeyimana said.

The reduction of the road toll charges is likely to result in cheaper prices for goods imported from Tanzania into Burundi, mainly rice and wheat flour.

“I believe Burundi will do away with this discriminatory excise tax for cigarettes from the EAC partner states,” Dr Sadallah told The EastAfrican.

But Burundi says that consultations have been undertaken with all the stakeholders in order to resolve the matter as soon as possible.

Daniel Mghwira, a trade analyst at Miradi Associates in Arusha, said that protectionism is a hidden threat to intra-regional trade.

“This kind of protectionism not only kills competition across the region, but is also harmful to intra-EAC trade, a most crucial component in regional integration,” Mr Mghwira noted.

Source: The East African

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