Checking milk at a collection centre in Tanga, Tanzania (photo credit: ILRI/Muthoni Njiru).

High taxation could be hampering efforts to promote the consumption of dairy products in Tanzania.

According to Salim Abri, director of ASAS Group, a leading dairy processor in Tanzania, high taxes on locally processed dairy products make imported dairy products cheaper and could be negatively affecting the take off of the country’s dairy sector.

According to an article posted on the IPP Media website on 16 October 2015, Abri expressed the challenge posed by high taxes on the country’s dairy industry during a visit by Titus Kamani, the Tanzania Minister for Livestock Development and Fisheries, to the ASAS processing factory in Iringa.

The visit was facilitated by the East Africa Dairy Development (EADD) II project, which uses the dairy market hub approach in Kenya, Tanzania and Uganda to improve dairy production and access to markets for 1 million milk producers. EADD II is led by Heifer International and is implemented in Mbeya, Iringa and Njombe regions by partners including the International Livestock Research Institute (ILRI), Technoserve, ABS and the World Agroforestry Centre.

‘Overall, the entire tax system is hampering the success of the dairy industry in the country,’ said Salim. He added that, if scrapped, the tax rates on dairy products would not have adverse effects on government revenues, given that the dairy sector is still at ‘infancy stage’. He gave an example of the ASAS Dairies which is yet to reach its potential level of milk processing capacity and currently produces only 12,000 litres in a day.

The dairy sector in the country has high potential for growth and is being supported by projects such as MoreMilkiT, which is piloting approaches to increase the use  of inputs and services by small-scale dairy farmers to raise milk production and marketing.

Read the full article ASAS director urges government to scrap VAT