Tanzania Finance Act 2024: A New Dawn for the Agricultural Sector

Dodoma, July 1, 2024 – The recently enacted Tanzania Finance Act 2024 brings a wave of significant amendments and provisions aimed at bolstering various sectors of the economy. Among the most impacted is the agricultural industry (Kilimo), which stands to benefit from targeted financial support, regulatory updates, and tax incentives. These measures are set to propel the sector towards increased productivity and sustainability.

Strengthening the Cashewnut Industry

One of the most notable amendments in the Act concerns the cashew nut industry. From July 1, 2024, the export levy collected will be fully remitted to the Cashewnut Board for five years. This strategic move enhances the financial resources available for the development and support of the cashew nut industry, ensuring that Tanzania remains a key player in the global cashew nut market.

According to the Finance Act, 2024, Section 17A of the Cashewnut Industry Act has been amended. The new provision states: “Provided that, from the 1st day of July 2024, the whole amount of export levy collected under subsection (1) shall be remitted to the Cashewnut Board for five years.” This means that all export levies collected from cashew nut exports will be directed to the Cashewnut Board, significantly boosting its financial resources.

Implications for the Industry

This strategic move is expected to have far-reaching implications for the cashew nut industry. By remitting the entire export levy to the Cashewnut Board, the government aims to:

• Enhance Financial Resources: The Cashewnut Board will receive a substantial increase in funds, which can be used for various developmental activities. These include improving infrastructure, supporting research and development, and providing better services to farmers.
• Support Development Initiatives: With more financial resources, the Cashewnut Board can implement targeted development initiatives. These could involve farmer training programs, investment in modern processing facilities, and promotion of sustainable farming practices.
• Ensure Market Competitiveness: The amendment strengthens the Cashewnut Board, ensuring Tanzania remains competitive in the global cashew nut market. Enhanced financial support will enable the industry to improve the quality and quantity of its produce, meeting international standards and demands.

Quote from the Act

To highlight the significance of this amendment, the Finance Act states: “From the 1st day of July, 2024, the whole amount of export levy collected under subsection (1) shall be remitted to the Cashewnut Board for five years.” This clear and decisive action underscores the government’s commitment to supporting the cashew nut industry and ensuring its long-term viability.

Impact on Farmers and the Economy

This amendment is a welcome development for cashew nut farmers. With increased funding, the Cashewnut Board can offer more robust support to farmers, including financial aid, access to better farming tools, and enhanced market opportunities. This support is crucial for improving the livelihoods of thousands of farmers who rely on cashew nut farming as their primary source of income.

Moreover, the broader economic impact of a thriving cashew nut industry cannot be overstated. As one of Tanzania’s key export commodities, cashew nuts significantly generate foreign exchange and boost the national economy. Strengthening this industry will contribute to overall economic growth and stability, benefiting the farmers and the entire nation.

Boosting the Sugar Industry

The Act also addresses critical amendments concerning the sugar industry. While specific details are not disclosed in the visible sections of the Act, it is clear that these amendments aim to support the growth and sustainability of sugar production. This is expected to positively impact both local consumption and export potential.

Ensuring Plant Health

In a bid to maintain agricultural productivity and protect crops from diseases and pests, the Tanzania Finance Act 2024 introduces crucial amendments to the Plant Health Act. These changes are pivotal for safeguarding the health of plants, ensuring that farmers can continue to produce high-quality crops.

Amendment Details

The amendments to the Plant Health Act are designed to strengthen the regulatory framework governing plant health in Tanzania. This includes updated provisions for monitoring, controlling, and preventing plant diseases and pests, which are essential for maintaining robust agricultural production.

Key Provisions

The key provisions of the amendments include:

• Enhanced Regulatory Measures: The amendments introduce more stringent regulatory measures to ensure the health of plants. This includes regular inspections, better disease and pest control protocols, and stricter quarantine measures for imported plants and plant products.
• Improved Monitoring and Surveillance: To effectively manage plant health, the Act mandates improved monitoring and surveillance systems. This involves deploying modern technologies and methodologies for early detection and rapid response to plant health issues.
• Support for Farmers: The amendments provide for increased support to farmers through training programs and the dissemination of best practices for plant health management. This helps farmers adopt effective measures to protect their crops and enhance productivity.

Impact on Agriculture

The updated Plant Health Act is set to have a profound impact on the agricultural sector. By ensuring that crops are healthy and free from diseases and pests, the Act aims to:

• Increase Agricultural Productivity: Healthy plants are more productive, leading to higher yields and better quality crops. This translates into increased income for farmers and a more robust food supply for the nation.
• Protect Food Security: By preventing the spread of plant diseases and pests, the Act helps safeguard food security. This is crucial for a country like Tanzania, where agriculture plays a vital role in feeding the population.
• Enhance Export Potential: With stringent plant health regulations in place, Tanzania can ensure that its agricultural products meet international standards. This is important for maintaining and expanding export markets, which are critical for the country’s economy.

Quote from the Act

To highlight the importance of plant health, the Act states: “The Plant Health Act amendments ensure updated regulations for plant health, which is crucial for maintaining agricultural productivity and protecting crops from diseases and pests.” This underscores the government’s commitment to protecting and enhancing the agricultural sector through robust plant health measures.

Support for Implementation

The government, through the Ministry of Agriculture, will provide the necessary support to ensure the effective implementation of these amendments. This includes:

• Training and Capacity Building: Farmers and agricultural officers will receive training on the new regulations and best practices for plant health management.
• Resource Allocation: Adequate resources will be allocated to support the enhanced monitoring and surveillance systems, including the deployment of modern technologies.
• Collaboration with Stakeholders: The government will collaborate with various stakeholders, including research institutions, international organizations, and the private sector, to ensure a comprehensive approach to plant health.

nd protect crops from diseases and pests, the Plant Health Act has been updated. These amendments are crucial for safeguarding the health of plants, thereby ensuring that farmers can continue to produce high-quality crops. The updated regulations will play a significant role in maintaining Tanzania’s agricultural output and food security.

Excise Duties and Export Taxes

The amendments to the Excise (Management and Tariff) Act and the Export Tax Act introduce new financial dynamics for agricultural products. Notably, a 10% export tax has been imposed on crude sunflower oil and sunflower seeds. This measure aims to regulate the export market, though it may affect the competitiveness and revenue of sunflower producers. Additionally, excise duties on undenatured ethyl alcohol used in industrial and medical applications will impact the cost structures for agricultural producers utilizing these products.

Financial Support through Local Government

The Local Government Finance Act amendments allow local authorities to issue loans to specified groups when there are no applications from others. This provision is particularly beneficial for agricultural groups in need of financial assistance, ensuring that they have access to necessary resources to invest in their activities and improve productivity.

Income Tax Benefits for Agriculture

The Income Tax Act has seen several key amendments:

• Tea Processing: Recognized as a business benefiting from specific tax provisions until June 30, 2027, supporting the growth of the tea industry.
• Interest Rates: Amendments facilitate lower interest rates for agricultural loans by allowing resident financial institutions to receive lower-interest loans from non-resident financial institutions under specific agreements. This measure is expected to ease the financial burden on farmers, providing them with more affordable credit options.