Dar Waives Import Duty on Gemstones to Attract Foreigners at Arusha Gemstones Fair

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By Jaston Binala, Dar es Salaam.

The Tanzania government has waived Value Added Tax on gemstones to be imported into the country for sale and exhibition at the Arusha international gemstones trade fairs this year. The move aims to attract more exhibitors and buyers at the fair, and to help turn Arusha into Africa’s gemstone trading hub.

Participants to the fair will this year be allowed to ship any amount of coloured stones into  the city tax free, the Commisioner of Minerals in the Tanzania Ministry of Energy and Minerals  Paul Masanja has said. Explaining the Government decision, the Northern Zone Mining Director based in Arusha, Alex Mageane, said no import duty will be charged to participants coming to this year’s gem fair in Arusha. Only a few formalities will be done at entry point.

In addition to the import tax relief, the Commissioner  Masanja said, a massive marketing campaign is in progress to attract as many participants to this year’s fair as possible from all over Africa and elsewhere. The Commissioner said the import tax waiver as well the massive marketing was part of Tanzania’s  effort to transform Arusha city into Africa’s gemstones center.

The  Arusha  Gem  Fair  (AGF),   formally  known as the Arusha International Gem, Jewellery and Minerals Fair  (AIGJMF) is this year planned to take place from 18th to 20th November, 2014.  It  will  be  held  at  Mount  Meru  Hotel  in  Arusha,  which is the same venue it was held last year.

Chairman of Tanzania Mineral Dealers Association (Tamida), Sammy Mollel welcomed this step and likened the government move with the approach used in Thailand to promote the International Bangkok Gemstones Fair, which is one of the most successful gemstones fairs in the world.

“When we go to Bangkok for the gemstones fair, when we arrive at the airport, we meet banners;  ‘no VAT, no taxes!  And this year they came up with a slogan, this is the power of free trade,” Mr Mollel said.

“No value added tax will be charged on the gemstones coming into the country,” Masanja said, adding that a lot of marketing has been done to promote this year’s fair.

South African Exhibitors at the Arusha Gemstones Fair in October 2014

South African Exhibitors from Gemfields Mining Robert Gessner (L) and Janet Silk at the Arusha Gemstones Fair in October 2013

It is therefore hoped that gemstones dealers and buyers from all over Africa and other parts of the world will attend the colored stones fair at the centre of  the continent.

AGF, which is marking its third anniversary this year, is jointly organised by  the Ministry of Energy and Minerals (MEM) and Tanzania Mineral Dealers  Association  (TAMIDA) in a public-private partnership  which  proved extremely useful during the event’s first two years.

Participants at last year’s gemstones fair had identified import tax and bad event timing as a hindrance to the success  of the fair. They asked the Tanzania Government that stones coming in from other parts of the continent or anywhere be allowed to get into Arusha tax free, and that the event should not coincide with other international coloured stones fairs such as those held in Munich, Germany, Hong Kong and Bangkok.

“These problems have been addressed,” Mr Mollel said,  “the event does not coincide with  other fairs this year, it does not coincide with any event next year.”

The gemstones dealer said he knows many participants have confirmed they are coming  but he would not give details because he want those facts to be disclosed by the head of the chairman of the organising committee. He however disclosed he was sure two dealers from Bangkok were coming.

In the excitement  of the forthcoming coloured stones fair in Arusha, Chairman of the gemstones committee in  Federation of Miners Association of Tanzania (Femata), Gregory Kibusi, said  small scale miners would be thrilled if the Government would  agree to sponsor their presence at the AGF by providing a paid for pavilion for small scale miners because they cannot afford the booth price individually.

Booths  for  exhibition  are  available  for  USD  1,000  applicable  before  30 th September  2014.  Late  registration  fee is  USD 1,250  Registration information is obtained from the ministry’s  Zonal Mine Offices  Arusha,  Mwanza,  Dar  es  Salaam,  Mtwara, Mpanda,  Shinyanga,  Mbeya  Musoma,  Songea  and  Singida regions, as well as TAMIDA  Offices.

“The  2014  AGF  annual  event  will  continue  to  build  our  vision  of making Arusha to be a gemstone centre in Africa. AGF will ensure participation  of  more  than  100  exhibitors  from  Eastern,  Central and  Southern  Africa,  1000s  of  prominent  international  buyers, and  famous  industry  experts.  The 3rd AGF  will  drive  passion  for gemstone trade in Sub-Sahara African Countries,” a government statement  has said.

The public-private partnership has been stretched to involve external professionals in the gemstones fair marketing, TAMIDA  chairman Sammy Mollel said in a telephone interview.  A tri-partite marketing agreement has been signed  this year between TAMIDA, the Thai Gem and Jewellery  Traders Association who are the organisers of the Bangkok Gemstones fair, and the Tanzania Government in which AGF will be promoted by the Bangkok Gemstones Fair,  as the Bangkok is promoted by Arusha.

The 2013 gemstones fair carried with it both gloom and bliss. Government officials on one hand called it a success, but a number of exhibitors complained quality buyers did not come because they had travelled to Munich, Germany, where a similar fair was going on at the same time.

The four-day Fair which started October 28 ended October 31. The fair  witnessed an increased number of exhibitors from across Africa. The number of exhibitors increased from 125 attending in 2012 to 180 in 2013, but the number of foreign buyers dropped from 300 attending in 2012 to 241 in 2013, according to official figures made available at closing day.

In a closing speech, the Acting Arusha Regional Commissioner John Mongela sounded upbeat:  “I am glad this year’s numbers are comparing very well with last year’s…. “We should be proud of the fact that the second [show] has lived up to the promise of making this event a regional fair, and Arusha an African centre for gemstone business.

Britons International Gem Limited Managing Director Yonah Mvunta attended last year’s gemstones fair. He is sceptical about attending the fair this year because he did not make money.

“I paid USD 1000 for the pavilion last year but sold nothing. I am really kind of unsure what I want to do this year,” Mr Mvunta said on the phone. “It is best you do what you know is going to pay. Going to the gemstones fair is really trial and error. You might sell, but you might also loose. I wish they could reduce the price of the booth.”

But Mr Mollel has a conflicting idea: “You don’t have to sell anything when you attend the gem fair. You also benefit from building your network. You meet people there, you establish contacts. The Gemstones fair is more than selling stones,” he said.

Last year, a Gambian gemstone dealer but who is based in Antananarivo, Madagascar, MamadouJallow said the small drop in quality buyers should not be a problem. The Arusha gemstones fair is an excellent African business feat which must be supported by all citizens of the the African continent.

“The Arusha show is good. In Africa it is the only show. I got the information about this fair in Bangkok,” Jallow said. “I told four other people about it and they all came. Africa as a whole should do whatever we can to make this annual event a success. Arusha is well positioned to be Africa’s gemstones business centre.”

The Gambian dealer said the only problem with the fair was the wrong timing in which the event took place on the same dates as one held in Munich, German. Organizers have to figure out the correct timing so that the event does not coincide with similar events elsewhere. “This fair is for us Africans. It is not for Tanzania alone. We should make it succeed,” he said.

A South African exhibitor from the multinational gemstones company GEMFIELDS, Janet Silk, conceded the drop in attendance was not a serious problem because the Arusha gemstone fair is new. It couldn’t compare with fairs which have existed for many years such the Hong Kong gemstones fair or the Munich Gemstones fair.