The East Africa Tea Trade Association has protested against the Mombasa government’s move to introduce cess charges on all vehicles transporting tea for export via the Port of Mombasa.

EATTA managing director Edward Mudibo said the county issued a circular on January 12 reintroducing cess of Sh32 per package of tea. The charges had been introduced for the first time in 2014, but were suspended in 2015. The association said the Mombasa Tea Auction Centre operates as a Special Economic Zone exempted from local taxes.

This is in recognition the tea traded in the auction is exclusively for export. Tea is a leading foreign exchange earner and the government has made provisions in the VAT Act, for example to exempt tea traded in the auction from paying VAT. Imposing cess charges on vehicles transporting tea to Mombasa is a form of local taxation, according to the association, which should not be the case.

He said the Finance Bill that provides for the charging of the cess has exempted goods on transit from being charged. EATTA has written a protest letter to the Mombasa Trade executive challenging the cess charges on grounds tea is traded in an auction that is a special economic zone and is therefore exempt from tax.

Source: The Star

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