MKUTANO WA WADAU WA SEKYA YA USAFIRI NA USAFIRISHAJI

DATE: 12th June 2021

Transport Industry Profile
Foreign Exchange Earning

950
$1.14bil
Companies

22,000
Trucks + Trailers 5.06 Trillion TSH
Asset Valuation of 2017
Industry

25,960
Employees
(Debt + Equity) $1.22bil
2018

Source: BOT Monthly Economic review report Dec 2018

1.18 Employees per Truck (Direct) 22,000 Assets x 100,000 USD x 2,300 TSH Source: Membership Data 2021, TRA
Tanzania Geographical Position
Tanzanian Ports Throughput

45%
Transit 65%
Local

Source: Tanzania Ports Authority

Port Lusaka (km) DRC Katanga (km) Malawi (km)

Dar es Salaam –
Dar Es Salaam Port
Tanzania
1,942.1 2,215.5 1,436.5
Beira - Mozambique
Tanzanian Ports have a (Shallow port)
1,042.0 2,269.6 1,038.7
distance advantage to Walvis bay –
2,067.4 3,144.3 2,939.9
most of other Namibia

competing Ports. Durban - SA 2,132.5 3,356.4 2,520.6

Tanzania’s Transit Market Potential
Actual Potential

1.22
Dar Other
Country Year Estimate
Port Ports $
2016 2017 2018 2019
Current volume in
Billion
Zambia 1,739,306 2,021,086 1,504,014 1,394,000 5,000,000 30 % 70 %
tons for SADC and EAC
DRC (Katanga) 634,011 764,896 1,299,896 1,411,099 3,500,000 37 % 63 %
Malawi 128,722 276,039 311,138 376,000 1,120,000 28 % 72 %
Burundi 320,374 415,993 379,794 478,000 500,000 76 % 24 %

25 %
Rwanda 862,639 1,061,193 911,870 1,252,000 1,300,000 70 % 30 %
Uganda 165,919 288,375 188,591 140,000 7,500,000 3% 97 %
DRC (Kivu) 518,736 411,867 479,901 473,000 850,000 56 % 44 %
South Sudan - - - 0 700,000 - 100%
Of the total potential transit
Total 4,389,017 5,256,092 5,102,347 5,524,099 20,470,000 25% 75% volume for SADC and EAC.
Current Major Bottlenecks
Denial of Consumer Installation by EWURA
Reasons for Consumer Installation:
1. Fuel Security during Price Increases

55m 7.1Billion 2.
3.
Fuel Hedging
Less Congestions on Public Roads

Liters Per Saving per 4.

5.
Station Pump Capacity for Light Vehicles
Fuel Reliability

Month Month 6. Dramatic Fuel Savings

7. Credit Facilities and Cash Flow Planning

22,000 Trucks x 2,500L per Month 55m x 129 TSH / L

EWURA, In discharging its
duties and functions on
petroleum sub-sector, the
Authority is obliged to comply • Saving can be used to re-fleet Retail Retail
and enforce the Petroleum
Act, 2015, Cap 392 that is a • Saving can be used to expand capacity 1,636 TSH/L 2,073 TSH/L +100
sector’s legislation. TSH

- However, under this

• Saving can be used to increase salaries Wholesale Increase
1,944 TSH/L Budget
regulation, the transporter
are denied the approval and
• More Corporate Taxes Paid 21/22
license of the consumer Difference
installation facility for their 129 TSH/L
owner consumption. Typical Hauler 500,000 L per Month = 200 Truck Loads = 64,500,000 TSH per Month
From EWURA 2nd June 2021 CAP Price
Corporate Income Tax Calculations
2 Options Proposal to support SME

Reasons for Per Truck Fee

• Better Compliance
Statutory Per Truck • Less Corruption
• Stable Growth
Audit Fixed Fee • Upfront Tax Collection
• Less Administration (GOT and Tax Payer)

Regular Audit Cycle Proposed XXXX TSH / Truck / year Already in Practice in

Larger Fleet Owners Professionals such as

Target
Corporates Doctors, Engineers,
Rwanda Malawi
Self-Employed Drivers
TASAC
• TASAC has caused a big impact to the
industry and has caused greater harm to
the transportation industry as compared
to the clearing industry.
• Capital Assets = Trucks = Wait days to
get TANCIS Documents
• EPZs have long queues due to TASAC
22,000 25,960
documentation delays Trucks Drivers
• TASAC cannot sign Service Level
Agreement or pay any demurrages
similar to Private Clearing Agents 950
• TASAC not behaving like a regulator but 5.06 Trillion Companies
more a exclusively mandated business TSH Assets
entity – Monopoly. EPZs
• Where was TASAC at start of
Covid-19?
• Where is TASAC with Market
Research?
LATRA

• Drivers being registered

by LATRA already
• Training Certificates to be
supplied to LATRA for
new Commercial Driving
License to be issued
• Predicting Driver Shortages
• Inflexible Labor Laws to relieve drivers • 0.5% of Gross Operating Revenue
• Allow use of SDL to train drivers will add to cost apart from City
Service Levies already being paid
of 0.3%.
EAC vs SADC
SADC vs EAC Trade
Volume in MT Transiting to Trading Blocs
3,500,000

3,181,099
3,115,048
3,062,021
3,000,000

2,502,039
2,500,000 2,343,000
2,177,428

1,960,156
2,000,000 1,867,668

1,500,000
SADC

SADC

SADC
SADC
1,000,000
EAC

EAC
EAC

EAC
500,000

0
2016 2017 2018 2019

SADC EAC
EAC - Vehicle Axle Load Control

GVM 46.5mt GVM 50mt

Not
Allowed
EAC - Vehicle Load Control Act and its regulation:
3.5 mt $1,400 Revenue i. The East Africa Community Vehicle Load Control Act, 2016,
(EAC VLC Act 2016) is aimed to protect roads by curbing
Loss per Loss per Loss to overloading. The law, which was gazette in 2016.
Trip Trip TPA
ii. Tanzania is a member of both EAC and SADC regional block.
Wharfage The main destinations of the cargo coming through Dar es
on Value Salaam port are Burundi, DRC, Rwanda, Uganda, Zambia, and
Malawi.
Use the Right Equipment
History
National Challenges
Pipes
18m Pipes
Needs
Special
Trailers

Transformers
Equipment
need
Vibali

Turbines

OOG
Equipme
nt
EAC-CMA Customs Warehouse Rent
Impact of Customs Warehouse Rent
$0.3
CBM / Day

Discharge Transit Shed (21 Customs Regime

•From Vessel Days) •IM4 - Domestic Use
•IM5 - Re-importation
21
•Carry-In and Carry-Out
Processes •IM6 - Warehousing Days
•Port to ICD
•Internal Transfers
•IM7 - Warehousing
•IM8 - Transit
TRA

Solution:
• Short Term: Blanket Waivers by CG Office and not CCE Office
• Long Term: Comprehensive Review of EAC-CMA as discussed by
MIT in June 2020
EAC-CMA Electronic Cargo Tracking System

The Electronic Cargo Tracking System (ECTS) is used to

further secure transit cargo from dumping into the local
ECTS Security
market and has been used for the last 8 years. The ECTS
system is used in conjunction of other securities such as
CB8 (Transit Bonds by Clearing Agents).
CB8 Security

Increase in Total Route Cost:

Bond in Force
1 USD per MT for Semi
2 USD per MT for Pulling
Electronic Cargo Tracking System - ECTS
Sulphur Import Volumes from TANCIS Statistics for Sulphur Entries in Tancis in MT

IMPORT TRANSIT TOTAL

0% (2017 - 2021)
YEAR
2017
TANSADs
31
MT
2,420.1
TANSADs
11
MT
8,070.5 10,490.6
Excise Domestic
3%
2018
2019
47
62
2,342.4
2,826.6
148
186
134,919.0
136,628.0
137,261.4
139,454.6
Duty
2020 73 4,820.6 133 107,087.3 111,907.9
2021 20 618.8 58 36,255.5 36,874.3
TOTAL 233 13,028.4 536 422,960.4 435,988.8
0%
Import
Duty Transit
97%

18% Solution:
Tanzania: 288,236mt (2019-2021) VAT Remove ECTS from Chemicals and Re-Agents
Competitors: 305,821mt (Q1 2021) with low Dumping Ability (HS Code Based)
Market Opportunity Just for Sulphur
Sulphur Import to DRC (in Millions of MT)
1.20

1.04 1.06
1.04 1.03

1.00
36k 800k
Metric Metric 0.86

0.80 Tonnes Tonnes

2021 2021 0.70 0.71

0.60
0.62
0.60
1m
0.53 Metric
Tonnes
0.40 4.5% 0.34
0.43
0.40 0.41 0.42
> 2022

Share
0.21
0.20

0.04 0.04 0.04 0.04 0.05

0.03 0.03 0.03
- -
0.00
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Future Minerals

Cobalt

Copper

Aluminum
70%
Global
Production
Cost Benefit Analysis of CWR and ECTS Alone
Pilot Stage Full Operational Stage
100,000.00 1,000,000.00

Potential Forex collected from Project Yearly USD $ 40,600,000.00 $ 406,000,000.00

Direct Employment created (jobs) 1,000.00 10,000.00

Potential Tax Collections from Direct Business:

Total Tax Collections to Central Government Tshs. 17,706,000,000.00 177,060,000,000.00
Total Taxes Contributed to LGA Tshs. 2,154,180,000.00 21,541,800,000.00
Total Taxes Collected from Capital Goods Importation Tshs. 17,328,767,123.29 173,287,671,232.88
Total Taxes Collected from Refleeting Captial Goods Yearly Tshs. 2,475,538,160.47 24,755,381,604.70
Potential Total Tax Collections from Direct Business Tshs. 39,664,485,283.76 396,644,852,837.57

Total Customs Warehouse Rent Collected on 120 days Tshs. 5,737,315,500.00 57,373,155,000.00

Difference between CWR Collection and Potential Tax Collection (33,927,169,783.76) (339,271,697,837.57)

*The above is based on a collections and economic growth from direct impact of said project. There will still be economic
stimulation and tax collections from indirect business generated from this change in CWR and more cargo flowing via Tanzania
ports.
Challenges facing Fuel Transportation
30 days given to Transit Fuel is too short.

30 Recommendation - We are requesting the

government to increase up to 90 or 120 to
Penalty
to Bond
Days increase efficiency. This will allow for a larger
Transit Exit tonnages to come via the port of Dar es Salaam

Re -Export of petroleum product: The government

Re- should allow the re -export of petroleum products

Export
whereby the importer can order for transit and once the
product arrives he can be allowed to re - export to all
transit destinations like the rest of the ports including
Mombasa as its benefit is multiple for our economy.
2
weeks

Of late TRA has been giving fuel transporters a

Post sample of trucks dating back a few years and asking
them to provide proof that the trucks really exited the
Clearance country.
Audit This request should be addressed with the OMCs not
the transporters.
THANK YOU