Establish shipping ministry, freight forwarders tell govt

Tanzania should form a shipping ministry to enable the government to earn revenue substantially, industry players say. Having such a ministry, marine matters will fully be dealt with and expand the industry.
They cite Malaysia, Singapore, Egypt and several other countries which have done so and reaped dividends of the industry. “Sumatra [Surface and Marine Regulatory Authority] has too many things to do. It should be left with the tasks of registering ships and ensuring the safety of ships and railways,” maritime expert Renatus Mkinga told BusinessWeek.
He said due to the lack of a ministry to specifically look on maritime issues, ship owners are regulating themselves and imposing any fee they want.
Tanzania Ship Tally Association vice chairman Hezekiah Teveli said creating the ministry would stimulate shipping and subsequently increase government revenue.
He laments that cargo tallying is now done by unscrupulous shipping lines’ agents. “The government loses revenue as taxes are not paid. Since tallying is performed as an in-house operation, tax is evaded.” But if a ministry responsible for shipping is set up it will be easier to control such things. Moreover, improper tallying has resulted in inaccurate cargo statistics.
“It has caused malpractices such as overloading, smuggling, theft and pilferage at ports of Dar es Salaam, Tanga and Mtwara.” Cargo tallying refers to checking and ascertaining cargo loading into or it discharging from the ship.
He said Sumatra was overwhelmed by regulatory activities. However, Sumatra acting director general Ahmad Kilima defends the authority’s capability in doing its tasks. “How can we form a ministry or special authority to a very small arena which has only 32 shipping agents?”
He said shipping activities were weighted depending on the number of ships that fly the Tanzania flag and the number of ships that dock at ports.
“In Tanzania we have very few ships that fly our flag and very few that enter the country. So, the industry is very small and Sumatra is capable of managing it,” said Mr Kilima.
According to him, having too many regulatory bodies is unhealthy as each authority will require huge amounts of money including paying salaries.
Former Tanzania Freight Forwarders Association president Otieno Igogo said: “Previously, we had the National Shipping Agencies Company which used to collect taxes on behalf of the government, but after its collapse, shipping owners have been regulating themselves, sending a lot of untaxed money back to their countries.”
He would like the government to know that maritime business is important for Tanzania’s economy and that many countries had developed through it.
Therefore forming a special unit or a ministry is important. However, Sumatra Legal Services director Tumaini Silaa speaks about views being collected from shipping players so as to improve the performance of the maritime industry.
Shipping agents say although the 2002 Shipping Agencies Act requires that 51 per cent of the shares in the shipping agent company be owned by Tanzanians, foreigners are the ones who own such companies.
“Sumatra has too many things to regulate. It knows well that the laws of the country are being violated but because it has too many things to do it doesn’t take any action.
That being the case a special authority should be set up to deal with shipping matters,” said a shipping agent who preferred anonymity.
He said that foreign managers were each paid monthly salaries ranging from $10,000 to $15,000 while local ones were getting Sh3 million.
“Salaries of foreigners are paid through their accounts in their mother countries. They are not taxed. Only locals are taxed. They also get hefty allowances which are also not taxed,” he said.
Thirty-two shipping agent companies are operating in Tanzania, and many of them are owned by foreigners.
Source: The Citizen