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Taxation dispute delays Minjingu road project

Taxation dispute delays Minjingu road project

 Acting Commissioner of Customs and Excise, Patrick Kisaka further said that so far there has been neither a tax dispute lodged by the French construction firm nor an application for a waiver because such goods are exempted. "Capital goods attract no import duty as per law hence there is no legitimate blockade, if any, by us against clearance of the company's equipment," Mr Kisaka noted.

He said may be the Sogea Satom which was given a seven days grace period by Works Minister, Dr John Pombe Magufuli, to move equipment on Arusha to Minjingu road site or risk losing the contract, has a backlog of storage charges unpaid to port operators. But Tanzania Roads Agency (TANROADS) Arusha Regional Manager, Engineer Deusdedit Kakoko said  after changes brought by the 2011/12 budget, TRA requires that Sogea Satom's equipment pay value added tax before being cleared from the port.

"There was communication breakdown between us and TRA because in fact the company is simply an employee of the government," Engineer Kakoko said over the phone from Arusha. He pointed out that under new tax regulations, the French firm is supposed to pay VAT which will be refunded at the end of the financial year because its equipment are exempted.

He however said the exact amount of VAT due is difficult to calculate as it involves regular importation of construction equipment and parts. "The process is rolling because importation goes on as the project progresses," said Eng. Kakoko. The TANROADS Regional Manager further noted that delays in clearing the equipment to enable the contractor start work, is only adding a burden to the government as delaying charges are being imposed daily.

Over a week ago, Dr Magufuli visited the site of the project and and expressed concern over delays to mobilise equipment onsite by the French firm which is undertaking a 98 kilometres road project between Arusha and Minjingu. Site Project Manager, John Hartmann told Dr Magufuli that equipment for the 75.5bn/- project has been stranded at the Dar es Salaam port due to a disagreement with TRA over taxes. The project which is due for completion in January 2014 was awarded to the French firm in May last year.

AN international firm, Total Energies, is in ...


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