BUSINESS

High tariffs on timber force furniture makers to import materials

Investors in the furniture making industry have started importing timber and other raw materials from Mozambique, Gabon, Democratic Republic of Congo and Ivory Coast to avoid high tariff charged on local timber.

Speaking in Dar es Salaam yesterday at a meeting with the Parliamentary Committee on Industry and Trade, they called on the government to review tariff charges on wood and other forest products which have now doubled by 300 percent.

They said that operating the industries using imported wood is even cheaper than using timber harvested locally.

Issa Rwabusimbi, Director of Maridadi Timberworks, who represented other stakeholders, said the cost of importing timber is between USD500 and USD600 per cubic meter, while the government sells hardwood First Grade at between USD800 and USD1000 per cubic meter.

Rwabusimbi advised the government to reduce tariff charges to 80,000/- per cubic meter as it was the case in the previous years.

He said the move would help them to penetrate the international market and create more employment locally.

“Due to high tariff, most of the carpentry factories have been closed whereby more than 400 workers have been retrenched since 2009.

“We would like the government to increase excise duty on imported furniture so as to protect the local wood using industries,” he said.

According to him, most furniture making industries taken by investors from the Tanzania Wood Industry Cooperation (TWICO) have become dysfunctional.

He mentioned them as Sawmill in Morogoro, Sawmill Co ltd in Tanga, Mingoyo Sawmill Company Limited in Lindi, Tabora Misitu, Sikh Sawmill (Tanzania) Limited in Tanga and Kili-Timber in Moshi.

Parliamentary Committee on Industry and Trade, Mahmoud Mgimwa chairman speaking at the occasion said the increase in levy has resulted in the mushrooming of illegal businesses.

He said despite the government ban on forest products exportation, still dishonest businesspeople have been exporting them through illegal (panya) routes.

Mgimwa, who is also the MP for Mufindi North, said his committee will meet with ministers of Natural Resources and Tourism; Industry, Trade and Market and Finance on the matter.

“We are going to discuss these problems with the ministers, we love our industries and we have the obligation to preserve them,” he said.

Committee vice-chairperson Stella Manyanya, however, said that responsible authorities should avoid bureaucracy to facilitate availability of raw materials. She said the government should be extra careful in handling forest industry products, because they help create employment to Tanzanian youths.