Why Dar port is losing out

is facing an all-too-familiar problem despite improving its efficiency over the years - it is still losing business to rival ports in other African countries along the Indian Ocean coast.

Kenya’s Mombasa port has traditionally been Dar’s main competitor for international transit trade from land-locked African nations seeking to access the ocean. But other ports, including Durban in far-away South Africa and Beira in neighbouring Mozambique, are also luring customers away.

According to the parliamentary Infrastructure Development Committee, what is pushing customers away from the Dar es Salaam port is not its notorious bureaucratic delays in clearing cargo, but rather an unfavourable tax regime attached to the transport hub.

The committee's chairman, Prof Norman Sigalla, said yesterday that the problem of multiple taxes and levies imposed on transit cargo was proving a highly discouraging factor for many importers and exporters from neighbouring countries.

Prof Sigalla said it was this lack of problem comprehension shown by relevant local authorities that was slowly stripping the Dar port of any competitive advantage it may have over its rivals.

The committee has advised the government to scrap off value added tax (VAT) on transit goods passing through the port, pointing out that competing ports like Durban, Beira and Mombasa do not charge the tax, which basically makes Dar a much more expensive gateway.

According to Prof Sigalla, the overall volume of transit cargo has declined significantly at the Dar es Salaam port, largely due to the VAT factor.

“VAT is scaring away importers because it rather unnecessarily inflates their costs of doing business,” he said.

The committee also urged the government to abolish double taxation for cargo storage, citing the storage rent charged by the Tanzania Ports Authority (TPA) and a similar warehouse rent imposed by the Tanzania Revenue Authority (TRA) for the same cargo.