The Tanzania Horticultural Association (Taha) says it will challenge the ban of fresh agricultural produce under the amended VAT Act of 2014. "Investors are concerned because our produce has to reach the markets in their raw form," said the association's executive director, Ms Jacquiline Mkindi.
The Arusha-based lobby group made up of producers and exporters, insist the new law would impact negatively on the industry, now one of the fastest growing sectors. An amendment of the Act will be enforced, starting in July 2019 and seeks to stop export of all unprocessed agricultural products, including horticultural products.
However, the Taha CEO says the measure would have dire consequences for the horticultural sector whose exports are delivered to consumers in their raw form. These include cut flowers, fresh beans and fruits, high value vegetables and some spices. They are airfreighted daily to markets overseas.
The legislation in question Value Added Tax (VAT) Bill, 2014 was passed by the Parliament in December 2014 and repealed the VAT Act of 1997. The latter Act was generally influenced by the need to broaden the tax base and efficient administration of tax and to align VAT law with international best practices.