VAT dispute impedes road station project

THE construction of a 24bn/- Manyoni one stop inspection station in Singida Region has stalled for a year now due to disagreement between the contractor and the government over Value Added Tax (VAT) exemption.

Matari Masige, the Acting Singida Regional Manager for the Tanzania National Roads Agency (Tanroads) told the regional road board here yesterday that the project whose implementation involves Finance and Planning ministry as well as Works, Transport and Communications, kicked off in March 2016 and was scheduled to take 18 months.

However, the deadlock over tax exemption on construction materials and related items has seen Italian contractor Mantovani S.p.A put down tools in the project funded by the European Union to the tune of euros 9,537,607 (over 24bn/-).

“In September 2018, the contractor stopped work with explanation that the employer—the government had delayed the process of enacting exemption on VAT and related taxes,” he said.

By the time the contractor downed his tools, construction had already reached 60.1 per cent, with negotiation going on between the government and the company to resolve the matter.

Overseen by the Central Corridor Transit Transport Facilitation Agency (CCTTFA), a pooled fund and relevant ministries, Manyoni and its twin, the Nyakanazi one stop inspection station in Kagera Region are located along the central corridor route to the landlocked countries of Burundi, Rwanda, Uganda and eastern Democratic Republic of Congo.

The CCTTFA Infrastructure Specialist, Charles Sabiiti said at the start of the project that the EU had extended a grant of USD 20 million (over 46bn/-) for the construction of the two stations.

The one-stop inspection stations are meant to reduce the number of stops for transit trucks to only three (Vigwaza, Nyakanazi and Manyoni) to reduce weighing and waiting time at weighbridge stations.

They will also assist truck drivers to rest at any of the one-stop inspection station and avoid accidents caused by tired driving and reduce the average travel time from the port of Dar es Salaam to exit points of Kobero/Kabanga at the Burundi border, Rusumo at the Rwanda border and Mutukula at the Uganda border.

When the stations are completed, transit trucks are expected to stop at only these three designated stops where required inspections will be conducted by regulatory agencies like the Tanzania Revenue Authority for customs related inspections, Tanroads for axle load compliance and roadworthiness inspection by the police.

“These duties are to be exercised in a series at each designated one stop inspection station,” the specialist noted