Kenyan firm sues Tanzania at regional court in tax row

Safety matches maker Match Masters argues that some provisions of Tanzania's Finance Act, 2025 are discriminatory and in breach of the East African Community Charter. [Courtesy]

Safety matches maker Match Masters has filed a case against Tanzania at the East Africa Court of Justice seeking to quash provisions in the Finance Act, 2025, imposing a higher excise duty on goods supplied by East African Community (EAC) member states.

The company, which manufactures Kifaru safety matches, noted that some provisions of Tanzania's Finance Act, 2025 are discriminatory and in breach of the East African Community Charter.

Match Masters, which also makes Kasuku; Tinga; and Paka safety match brands sold in Tanzanians, said the the import duty imposed by the Tanzanian government of TSh400 (Sh21) per kilo on imported matches, has increased the price of its products overnight by TSh2,000 (Sh103) per carton of 1,000 match boxes, making them significantly less affordable for the Tanzanian public.

"For 23 years, we have supplied high-quality and affordable matches to the people of Tanzania, and we are deeply saddened and shocked that this might come to an end because of a discriminatory levy that has been imposed for unclear reasons," said Match Masters Managing Director Kushal Shah.

In the Finance Act, Tanzania increased the import duty on matches by TSh400 per kilo. Additionally, it increased duty on some imported items by 10 per cent as it seeks to support local businesses.

These are also in addition to the recently gazetted Business Licensing (Prohibition of Business Activities for Non-Citizens) Order, 2025, which prohibits non-Tanzanian citizens from trading in 15 services, including the operation and ownership of small and medium enterprises (SMEs).

While Tanzania said this would promote local industries, Kenyans see it as a move by Tanzania to block an influx of Kenyan-manufactured goods, as well as the setting up of small businesses by Kenyans in the country.

The Trade and Industry Ministry recently complained to Tanzania, noting that "the measures taken by Tanzania are substantive and undermine the core objective of regional economic integration under the Common Market Protocol (CMP)."

It added that the common market protocol "specifically allows EAC nationals to establish and operate businesses, not to treat EAC nationals less favourably than their own nationals.

Kenya requests that these restrictions be removed and that Tanzania reverts to measures provided for in the EAC protocol.

Shah said by exempting Tanzanian-manufactured matches while subjecting Kenyan-manufactured safety matches to the excise duty, the new levy has created a disguised customs barrier.

The EAC treaty prohibits new fiscal barriers on intra-community trade and forbids discriminatory measures against goods from partner states.

"Tanzania has therefore broken its commitment as outlined in the charter, and it is within the jurisdiction of the EACJ to ensure that an injunction is put in place to stop this levy from being applied to Kenyan and other EAC member states' goods," said Shah.