The Tanzania Ports Authority (TPA) has been advised to relax its taxation regime in order to woo clients, amid declining cargo volumes at the Dar es Salaam port, a trend that has been linked to unfriendly tax policies.

Members of the Parliamentary Infrastructure Development Committee said a bad tax regime had forced customers to look for alternative ports for imports and exports.

The committees chairman, Norman Sigalla, said that the volume of transit cargo at the Dar es Salaam port had declined due to value added tax (VAT), driving importers and exporters from neighbouring states to Kenyan, Mozambican and South African ports.

VAT is a key factor scaring away port users as it inflates the costs of clearing the cargo, said Prof Sigalla.

As a result, importers had switched to the ports of Durban in South Africa, Beira in Mozambique and Mombasa in Kenya.

Double taxation