FAO Fisheries Circular No. 1000 FIPP/C1000 (En) ISSN 0429-9329

FISCAL ARRANGEMENTS IN THE TANZANIAN FISHERIES SECTOR

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FAO Fisheries Circular No. 1000 FIPP/C1000(En)

FISCAL ARRANGEMENTS IN THE TANZANIAN FISHERIES SECTOR by J.D.K. Wilson FAO Consultant Maputo, Mozambique

FOOD AND AGRICULTURE ORGANIZATION OF THE UNITED NATIONS Rome, 2004

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© FAO 2004

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PREPARATION OF THIS DOCUMENT

In view of the importance of fiscal strategy to fisheries management, this study was undertaken to provide detailed information and analysis at a country level of fiscal arrangements and results. Tanzania was chosen for this study because of the variety of fisheries and arrangements. A number of examples are described and the lessons to be learnt from experiences involved have been analysed. This work was undertaken in the framework of the Regular Programme activity 234P3 – Economic and Social Analysis of Fishery and Aquaculture Policy and Management.

ACKNOWLEDGEMENTS The study could not have been undertaken without the full cooperation of the authorities, and most particularly the fisheries authorities, in mainland Tanzania and Zanzibar. The Director and staff of the Department of Fisheries in the Ministry for Natural Resources and Tourism in mainland Tanzania provided substantial assistance and this is gratefully acknowledged. The consultant benefited from assistance of the Director and staff of the Department of Fisheries and Marine Resources of the Ministry of Agriculture, Natural Resources, Environment and Cooperatives in Zanzibar, and their support is also gratefully acknowledged. Author’s address: J.D.K. Wilson FAO Consultant P.O. Box 2873 Maputo, Mozambique jdkw@mac.com Distribution: FAO Fisheries Department FAO Fisheries Officers in FAO Regional Offices Director of Fisheries

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Wilson, J.D.K. Fiscal arrangements in the Tanzanian fisheries sector. FAO Fisheries Circular. No. 1000. Rome, FAO. 2004. 27p.

ABSTRACT

This report presents the findings of a short study into the fiscal arrangements in the fisheries sector of Tanzania. Fiscal arrangements are important to fisheries management. The procedure for implementing the arrangements in various situations, as well as the results, are analysed. In addition, an account is given of the institutions involved and their role in the arrangements.

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CONTENTS Pages ACRONYMS AND ABBREVIATIONS................................................................................ vii EXCHANGE RATES ............................................................................................................ vii

EXECUTIVE SUMMARY .................................................................................................... ix

1. INTRODUCTION .......................................................................................................... 1

2. FISHERIES IN THE ECONOMY ............................................................................... 1

2.1 Tanzania mainland .................................................................................................... 1

2.2 Zanzibar .................................................................................................................... 2

3. FISCAL STRATEGY FOR FISHERIES AND AQUACULTURE ............................ 2

3.1 Tanzania mainland ………………………………………………………………… 2

3.2 Zanzibar ……………………………………………………………………………. 4

4. CHARGES – TANZANIA MAINLAND ……………………………………………… 4

4.1 Description ………………………………………………………………………….. 4

4.2 Origin, purpose and legal status .................................................................................. 8

4.3 Revenues raised ............................................................................................................ 9

4.4 Impact of charges on the fishery .................................................................................. 11

5. CHARGES – ZANZIBAR ................................................................................................ 13

5.1 Description .................................................................................................................. 13

5.2 Origin, purpose and legal status .................................................................................. 14

5.3 Revenues raised ........................................................................................................... 15

5.4 Impact of charges on the fishery ................................................................................. 15

6. APPLICATION OF FUNDS ............................................................................................ 16

6.1 Tanzania mainland ....................................................................................................... 16

6.2 Zanzibar ....................................................................................................................... 17

7. CONCLUDING REMARKS ........................................................................................ 18

REFERENCES .......................................................................................................................... 20

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Pages

APPENDIX I ........................................................................................................................ 21

APPENDIX II ........................................................................................................................ 27 TABLES Table 1 Fisheries in the economy (mainland) ......................................................................... 1 Table 2 Fisheries in the economy (Zanzibar).......................................................................... 2 Table 3 Principle fiscal instruments (mainland) ..................................................................... 3 Table 4 Principle fiscal instruments (Zanzibar) ...................................................................... 4 Table 5 Collection by fiscal year (mainland) ........................................................................ 10 Table 6 Estimate of decentralized revenue collection (mainland) ........................................ 10 Table 7 EEZ licences (mainland) .......................................................................................... 11 Table 8 Collection and retention by fiscal year (mainland) .................................................. 16 Table 9 Fisheries Department annual expenditure (mainland) ............................................. 17 Table 10 Fisheries Department annual expenditure (Zanzibar) .............................................. 18 FIGURES Figure 1 Collected revenues (mainland) .................................................................................. 9 Figure 2 Export royalty (mainland).......................................................................................... 9 Figure 3 Effort and CPUE in the shallow water shrimp fishery ............................................ 12 Figure 4 Effort and CPUE in the Nile perch fishery .............................................................. 13 Figure 5 Collected revenues (Zanzibar) ................................................................................. 15 Figure 6 Export royalty (Zanzibar) ........................................................................................ 15 Figure 7 Central Government revenue sources and allocation, 2001/02 (mainland)............. 17

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ACRONYMS AND ABBREVIATION

CPUE catch per unit of effort

DFO District Fisheries Officer

EEZ Exclusive Economic Zone

EIA environmental impact assessment

FD Fisheries Department (mainland)

FDZ Fisheries Department (Zanzibar)

GDP gross domestic product

GoT Government of Tanzania

GRT gross registered tonnage

LOA length overall

MCS monitoring, control and surveillance

MNRT Ministry of Natural Resources and Tourism

SADC Southern African Development Community

TCMP Tanzania Coastal Management Partnership

TIC Tanzanian Investment Centre

TRA Tanzania Revenue Authority

EXCHANGE RATES

Tanzania shillings/US dollars

Year Tanzanian shillings per

US$

Year Tanzanian shillings per

US$ 1993 460 1999 676 1994 526 2000 795 1995 595 2001 820 1996 596 2002 900 1997 624 2003 1 000 1998 666 - -

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EXECUTIVE SUMMARY

1. This report presents the findings of a short study into the fiscal arrangement in the fisheries sector in Tanzania, carried out in the last quarter of 2003. Fisheries is not a union issue in The United Republic of Tanzania allowing the governments of mainland Tanzania and Zanzibar to act autonomously when dealing with any fisheries issues. Analysis for the two are therefore kept separate.

2. The fiscal strategy for the sector on the Tanzanian mainland focuses on revenue generation

from exports, shrimp fishing licences and Exclusive Economic Zone (EEZ) fishing licences. The primary instruments available include vessel registration and licensing, export royalty and fish levy (charged on the sale of fish). Fish levy accrues to local governments, whilst export royalty and licence fees for vessels greater than 11 m/20 gross registered tonnage (GRT) accrue to central government via the Fisheries Department. Fiscal strategy for Zanzibar is similar, only revenues from the licensing of all vessels (irrespective of size) accrue to the Zanzibar government, via the Fisheries Department. Fish landing levies and access fess for migratory fishers accrue to local village committees.

3. In mainland Tanzania, charges for vessel registration, licensing and fishing vary with vessel

size, flag and whether the owner has an approved onshore processing facility. Export royalty on principle fisheries exports is charge on a per kilo basis, approximating to six percent of free on board (FOB) value. Fish levy is charged at a maximum of five percent of landed value. The legal basis for all charges in the sector is the Fisheries Act of 1970, last modified through regulation in 2000. The act is currently being re-written and should be in force early 2004.

Revenues collected for central government (2002) totalled US$6.9 millions (mainland only), of which 97 percent was from export royalties. Of export royalties, 85 percent was collected from the export of Nile perch related products from Lake Victoria. Decentralized revenue collection is estimated at US$1.5 million per year, of which 99 percent is due to fish levy, and 62 percent from freshwater fisheries. Total tax burden on the fishery is estimated at nine percent of landed value, and the sector contributes approximately one percent of total government revenue collection.

There are no signs of any significant changes in behaviour in any of the major fisheries as a result of charges made to the fishery. A brief analysis of effort and catch per unit of effort (CPUE) in the shallow water shrimp and Nile perch fisheries underlined the need for further management measures.

4. In Zanzibar, charges for vessel registration are made at a fixed rate, whilst licences vary with

length and means of propulsion. Export royalty is charged on the basis of six percent of FOB value. The legal basis for charges is set out in the Fisheries Act of 1988, last modified in 2000. The act is also currently being re-written and should be in force early 2004.

Revenues collected for the Zanzibar government (2002) totalled US$0.06 million, of which 73 percent was collected from royalties. Of export royalties, 84 percent was collected from the export of dried seaweed, produced by extensive small scale mariculture. Local revenue collection from the fishery is estimated to be US$0.22 million, more than 3.5 times that accruing centrally. Total tax burden on the fishery is estimated as 2.5 percent of landed value.

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Data shortages did not permit analysis of the impact of charges on the fishery in Zanzibar, but it is not considered to be significant.

5. On mainland Tanzania, the Ministry of Finance allows retention of part of earned revenues in

the fisheries sector. For the fiscal year 2001/2, 48 percent of earned revenue was sent back to the Fisheries Department, six percent was taken as overhead by the Ministry of Natural Resources and Tourism and the remaining 46 percent retained by the treasury.

In Zanzibar a retention scheme is started in 2003. For the fiscal 2001/2 the department spent 170 percent of collected revenue and required net support from the treasury.

6. On mainland Tanzania, centralised revenue collection was found to be efficient and effective,

whist decentralized revenue collection is considered to be less efficient, with only 30 percent of potential revenue actually accruing to local governments. Local revenues could be increased significantly through improvements in mechanism for the awarding of contracts for revenue collection. The total tax burden (nine percent of landed value) appears to be high.

7. In both mainland Tanzania and Zanzibar the greatest potential for increasing government

revenue from the fishery is in the licensing of vessels to fish in the EEZ. This will however require the development of appropriate institutions and management mechanisms (including MCS) as well as further investigation as to the real potential of EEZ fisheries.

8. Aquaculture and mariculture makes no significant contribution to mainland government

revenues, but plays an important role in coastal communities in Zanzibar. The mariculture of shrimp has potential in mainland Tanzania which is yet to be realized.

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1. INTRODUCTION This report presents the findings of a short study on fiscal arrangements in the fisheries sector in Tanzania, commissioned by FAO for a workshop on the subject. Data collection was carried during two short visits to Tanzania in the period 20 September – 16 October 2003. The terms of reference for the study are presented as Appendix II. Fisheries in the United Republic of Tanzania are not a union issue, and consequently the Revolutionary Government of Zanzibar–Tanzania (covering the islands of Unguja and Pemba) and the Government of (mainland) Tanzania are at liberty to manage their fisheries issues completely independently. This covers all aspects, including: policy and strategy; fiscal arrangements; statistics; fisheries management and development, etc. In this report issues relating to Zanzibar and mainland Tanzania are thus presented separately wherever possible. 2. FISHERIES IN THE ECONOMY

2.1. Tanzania mainland Fisheries in mainland Tanzania are managed by the Fisheries Department, subordinate to the Minister for Natural Resources and Tourism (MNRT). Under the current decentralized administrative structure, the department does not extend down to district level, and has no representation in the districts. Fisheries and aquaculture issues at district level are the responsibility of district fisheries officers who answer to the local District Council. The fisheries sector in Tanzania is dominated by the artisanal Nile perch fishery on Lake Victoria, both in terms of volume, landed value, export revenue and government tax revenues. The industrial shallow water shrimp fishery is the most economically important marine fishery, but its contribution to the economy much less significant than that of the Nile perch fishery.

Table 1 – Fisheries in the economy (mainland)

Fisheries as percentage of gross domestic product (GDP)

2.7% 2000 (BoT, 2001)

Fisheries as percentage of exports

12% 2000/01, idem

Direct employment Artisanal Industrial Marine Freshwater

121 000119 400

1 50021 30099 600

2002, Fisheries Department (Artisanal), estimate (Industrial)

Production (tonnes) Nile perch Shrimp

334 00092 0002 000

2002, Fisheries Department

Exports (million US$) Shrimp Nile perch (all forms)

91.16.6

77.1

2002 (URT, 2003)

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There is currently only one commercial shrimp aquaculture project in Tanzania, still in the early stages of implementation. There is some small scale culture of tilapia, but the economic contribution is not significant. The mariculture of seaweeds for export make important contributions at coastal community levels, but the practise is not yet very widespread.

2.2. Zanzibar Fisheries in Zanzibar are managed through the Department of Fisheries and Marine Resources, subordinate to the Ministry of Agriculture, Natural Resources, Environment and Cooperatives. The fisheries sector in Zanzibar is dominated by artisanal fisheries, mostly fishing for national markets. There are no large scale commercial inshore fisheries, but EEZ fishing activity makes a larger contribution (relatively) to state revenues than with mainland Tanzania.

Table 2 – Fisheries in the economy (Zanzibar)

Fisheries as % of GDP 2.5% RGZ, 1999 Direct employment 23 800 1997, Fisheries Department, Zanzibar

(FDZ) Production (tonnes) Anchovies Emperors

22 0003 5002 100

2002, FDZ

The most significant export product is dried seaweed (approx. 4 000 tonnes/year) from extensive small scale mariculture.

3. FISCAL STRATEGY FOR FISHERIES AND AQUACULTURE

3.1 Tanzania mainland

Objectives The key fiscal objective for the fisheries sector is defined in the National Fisheries Sector Policy and Strategy Statement (MNRT, 1997) as to “finance administrative, management and development programmes from its own sources” (para 5.1.1). The policy statement at the same time implies that, in spite of the sector’s export and revenue raining potential, this may not however be possible: “It would be unrealistic to assume the Government will finance its programmes…from its own sources in a long term. The ...programme...will depend on support from other stakeholders (donors etc).” (para 5) In practise, revenue generation from the fisheries sector plays an important role not only in the financing of the Government of Tanzania (GoT) programmes in the sector, but also in the raising of revenue for the treasury and local (decentralized) administration. Although the policy statement does not indicate how revenue should be raised, there are several instruments in place which allow revenue to be generated at both local and central levels.

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Instruments

Fiscal instruments available to the fisheries sector include: Table 3 – Principle fiscal instruments (mainland)

Instruments Accruing to Licensing of industrial vessels Royalties charged on fisheries exports Export licences

Central Government via the Fisheries Department

Licensing of artisanal vessels Fish sales tax fees (Fish Levy)

Accruing to Local Government1

It is notable that all of the above are perceived as revenue raising instruments rather than management measures. Rates of licensing (Appenxi Table 1) have specifically been set so as not to limit the access of national investors to the fishery – should they be used as a management tool to limit access to the fishery it is believed that (especially in the shrimp fishery) this would result in higher foreign participation. In addition the above, the Tanzania Revenue Authority (TRA) also gains revenue from the sector in the form of company taxation on fisheries related industries. This revenue is however destined for treasury consolidated funds and is not handled by the Fisheries Department. During the course of this study it was not possible to obtain information on TRA revenues disaggregated by sector, and it is not known how much fisheries industries contributes to treasury funds via the TRA. Aquaculture Mariculture and aquaculture have received positive support through the Tanzania Coastal Management Partnership (TCMP) which has produced key documents for assisting investors and policy makers, including an Investors Guide (TCMP, 1999a) and an Issue Profile (TCMP, 1999b). In spite of this, there is as yet very little commercial activity in the sub-sector. Administratively aquaculture falls under the Fisheries Department, but they do not have sole authority over all issues. Other sectors include Environment, Transport, Forestry and the Tanzania Investment Centre (TIC). Fisheries policy is to promote small scale production, ecologically sound use of water bodies and maintenance of farm hygiene. Although there is no statement of fiscal strategy towards aquaculture, it seems likely that the Fisheries Department would impose a royalty on exports, just as for fish products from capture fisheries. Current regulations make no exemption for cultured products. The National Environmental Policy requires consideration of environmental concerns in sectoral policies and their coordination for sustainable development. EIAs have proven problematic for previous investment projects in aquaculture.

1 The Minister of Finance’s budget speech of June 2003 abolished many local government tax instruments, including several that affected fisheries, fish trading and fish processing. Although it can be confirmed that vessel licensing and fish levy continue to be charged, at the time of writing there was uncertainty as to whether other charges had been abolished, or continued to be imposed.

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3.2 Zanzibar

Objectives There is no clear statement in the current sectoral policy document (RGZ, 1999) which sets out fiscal objectives for the sector. However, the EEZ and coastal fisheries are treated very differently and the FDZ attempts to maximise revenues from the EEZ fishery, whilst treating fiscal measures in the coastal artisanal fishery on the basis of partial cost recovery for the time and effort required to license.

Instruments The principle fiscal instruments available to the fisheries sector in Zanzibar include:

Table 4 – Principle fiscal instruments (Zanzibar)

Instruments Accruing to Licensing of vessels Licensing of fishers Migratory licence Export royalty

Central Government via FDZ

Fish landing levy Access fees for migratory fishers

Local village committee

Mariculture The Government of Zanzibar sets out increase the production of seaweed, cultured finfish, crustacean and mollusc species to complement the declining position from capture fisheries (RGZ, 1999). The associated strategies focus upon diversification of mariculture away from seaweed and the improvement of seaweed farming and marketing. So far little has been done in practice to achieve these objectives, and it appears that fiscal incentives do not form part of the instruments which the government proposes to use to try to achieve these targets.

4. CHARGES – TANZANIA MAINLAND

4.1 Description This section describes the nature of charges made on the fishery under two categories: those accruing to the central government (via the Fisheries Department) and those accruing to local government. Detail of the revenues collected are presented in section 4.3.

Accruing to the central government The charges that the Fisheries Department can impose on the fishery are set out in the Fisheries Act No. 6 of 1970, last amended in June 2000, and are centred on vessel licensing and export royalties. In almost all cases of vessel licensing, preferential charges are imposed on those who invest in shore based processing facilities (an average discount of 30 percent for nationally flagged vessels and 60 percent for foreign vessels). Charge rates for foreign vessels are significantly higher than those for nationally flagged, averaging about 60 times the

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national rate for companies without shore based processing and 17 times the national rate for those with shore based processing. Detailed charge rates are presented in Appendix Table 1. Vessel registration (>11 m) All fishing vessels are subject to once-off registration, and the registration of fishing vessels larger than 11 m overall length or more than 20 GRT can only be sanctioned by the Fisheries Department. and payment is made via the region’s fisheries officer. Charge basis Accruing to Collected via Charge rate

(Appendix Table 1) Trawler once off Central government FD US$68/a /1 – US$48 000/b /2 Finfish vessel

US$4.8/a /1 – US$21 600/b /2

/a Tanzanian vessel /1 with shore-based processing facility /b Foreign vessel /2 without shore-based processing facility Rates are set via regulation to the fisheries act and vary with vessel size, type, flag and shore infrastructure. Preference is given to nationally registered vessels and those whose owners have approved shore-based fish processing facilities. There are relatively few entrants into the fishery, and vessel registration does not represent a significant revenue stream for the sector. In addition, all of the shallow water shrimp fleet is nationally flagged and the corresponding registration rates are very low (max US$298 for a vessel >300 GRT). Vessel licensing (>11 m) Vessel operators must purchase annual vessel licence and those for vessels greater that 11m can also only be issued by the Fisheries Department. Rates are set via the fisheries act and vary with vessel size, flag and shore infrastructure. Charge basis Accruing to Collected via Charge rate

(Appendix Table 1) Vessel licence

annual Central government FD US$2.4/a /1 – US$162/b /2

/a Tanzanian vessel /1 with shore-based processing facility /b Foreign vessel /2 without shore-based processing facility Although this is a continuous revenue stream, it does not bring significant benefits on account of the low charge rates and the small size of the fleet of vessels larger than 11m - there are currently only 27. Fishing licence An annual fishing licence for each vessel must be purchased and again, those for vessels greater than 11 m or 20 GRT can only be issued by the Fisheries Department. Fishing licences are charged per GRT and rates vary with vessel size (GRT), flag, fishery and shore infrastructure.

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Charge basis Accruing to Collected via Charge rate

(Appendix Table 1) Fishing licence - Crustaceans US$2.4/GRT/a /1 –

US$108/GRT/b /2 - Finfish

annual Central government FD

US$1.2/GRT/a /1 – US$99/GRT/b /2

/a Tanzanian vessel /1 with shore-based processing facility /b Foreign vessel /2 without shore-based processing facility The annual fishing licence is the principle mechanism for control of effort in industrial fisheries and only a limited number are sold each year. In the shallow water shrimp fishery for example, the management cycle includes periodic recommendations from the research institution (TAFIRI) of the number of fishing licences that should be issued. Note that there is no catch limit or quota associated with any fishing licence. The sale of annual fishing licences represents a small but consistent revenue stream. The shallow water shrimp fleet is composed exclusively of nationally flagged vessels, with an average size of 115 GRT. Assuming that none have shore based processing facilities; this would imply annual revenues in the order of around US$28 000. The licensing of finfishing vessels for EEZ waters has recently become a significant revenue stream, and up to October 39 licences had been sold in 2003, earning over US$700 000. Export royalty The fisheries act sets out an export royalty, payable on the export of any fisheries product. The royalty is collected by the Fisheries Department, and export documentation requires the inclusion of a receipt showing payment of royalty. Export royalties are perceived as a resource rent, accruing to the state, the de jure owner of the resource. Charges are made on a per kilo basis in all cases except for seashells and aquarium fish, which are charged ad valorem. In the case of shrimp, export royalty is reduced by about six percent for product processed ashore. Charge rates are set at what is estimated to be six percent of FOB value, but charged per kilo rather than ad valorem in an attempt to reduce evasion through under-invoicing. Charge

basis Accruing to Collected via Charge rate

Export royalty Per kilo Central government FD See Appendix Table 3

Export royalty is the principle source of revenue generation in the sector, earning close to US$4 millions in 2002. A total of 84 percent of export royalty was collected from the export of Nile perch products, and 10 percent from export of marine shrimp.

Accruing to local government At the time of writing local government revenue collection in all sectors had just undergone fundamental changes as a result of the 2003 budget speech (see footnote 1, page 3). In an

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attempt to reduce double taxation and remove “nuisance taxes” the Minister abolished many local taxes which had previously accrued to local government. On the surface, this appears to be a step backwards in the decentralisation strategy that the current government has been pursuing as, with the reduction of the local tax base, the central government will probably be obliged to resume direct support to local government from central funds. Annual vessel licences and fish levy continue to be charged, but amongst those instruments abolished which earned revenue for local government from the fisheries sector are: fisher licences, vessel parking and landing fees, service levy (industrial cess). It must however be noted that there continues to be some uncertainty as to exactly how the Minister’s speech is to be interpreted in practice. Annual vessel licence Vessel licences fees for small fishing vessels are collected by district fisheries officers and accrue to local district councils. In principle the rate charged is that set in the fisheries act (US$1.2 per year), but in practice local councils set their own rates via local bye-laws. Annual vessel licences around Lake Victoria varied in cost between US$1.0–3.8 (LVEMP 2001a). Vessel licence fees could provide reasonable income for local government, but not only are rates low, but also collection is expensive and coverage low. Estimates from Lake Victoria indicate that only 43 percent of vessels pay annual vessel licence, and collection costs frequently exceed collected revenue. In the light of the abolition of other tax sources, it is reasonable to assume that more revenue will be extracted from the remaining sources, and thus annual vessel licence fee rates will probably rise. Charge basis Accruing to Collected via Charge rate Vessel licence

Annual Local government DFO US$1.0 – 3.8

It should be noted that although the annual vessel licence fee is potentially an instrument for effort management, to date it does not yet serve that purpose in artisanal fisheries. The issuing of annual licences for artisanal vessels is not limited in any way, either in marine or freshwater fisheries, including Lake Victoria. Fish levy Fish levy is a tax payable on the sale of fish, usually by the buyer. The Minister’s June 2003 budget speech retained product/sales taxes, and fish levy continues to be charged by local governments under this clause. Prior to June 2003, local governments were able to decide their own rate of levy, and also levy fish passing into the district which had been already taxed in another district. Rates of charged on Lake Victoria varied between US$0.006 to US$0.012 per kilo (about 1.5 percent to 3 percent of landed value) and this could be charged up to four times between fisher and processing factory. The charge is now capped at five percent of landed value (corresponding to US$0.05/kilo for Nile perch at current beach prices), and can only be applied once.

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Charge basis Accruing to Collected via Charge rate Fish levy % of landed value Local government Private agent ≤ 5%

The common method of collecting fish levy is via private agents contracted to the local council. The agent bids a fixed price for the right to collect specific revenues on behalf of the local council and, should his bid be successful, is then bound to pay the council the bid price every month. Tax collected is the agent’s revenue, and any collection in excess of the bid price is the agent’s profit. Should the agent fail to collect revenue equal to or greater than the bid price, then he will make a loss. The system has advantages for the local government as there are no administrative costs (the agent has to bear these), and revenue streams are both known, consistent and dependable. The major disadvantage is that the mechanism for awarding contracts is not well developed and lacks transparency, as a result of which agents may win contracts on the basis of low bids, permitting super-normal profits. There is thus a very significant different between what is charged to the fishery and what is received by local government – only an estimated 40 percent of collected revenue is passed to local government, the remainder being the agents’ profit and operating costs. It should be noted that agents are extremely efficient at collecting revenue, and rates of coverage of fish levy are as high as 95 percent (LVEMP 2001a).

4.2 Origin, purpose and legal status Instrument Origin Purpose Legal status Observations Vessel registration fee

• Fisheries Act Nº6 1970 • Fisheries Principle Regulation 1989, allowing Minister to issue licences, prescribe terms and fees of licensing, require registration and licensing.

Control of vessels operating in the fishery, register of ownership and vessel details.

Rate last revised in 2000. Currently under revision as part of writing of new Fisheries Act, expected to be ratified by first quarter 2004

Annual vessel licence

Idem Regulation (unclear)

idem

Annual vessel fishing licence

Idem Effort management; Revenue generation; Statistical indicator.

idem Potential use in management of both small scale and industrial fisheries – operator “buys into” the resource.

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Instrument Origin Purpose Legal status Observations Export royalty

Idem, but in 1989 was denominated Export Tax

Revenue generation; Resource rent.

idem Charged at 6% ad valorem until 2000, when basis changed to /kilo

Fish levy • Local Government Finances Act 1982, allowing local government authorities to impose various taxes within their jurisdiction. Revenues collected to be paid into district council general fund, expended for purposes of that council.

Local government revenue generation; (Resource rent).

Essentially a sales tax; capped 6/2003 at 5% of sale value. One of the few remaining instruments for local government revenue generation

4.3 Revenues raised

Central revenues Detailed breakdown of revenues accruing to central government is given in Appendix Tables 8 and 9 and summarized in the figures below. In 2002, the FD collected US$6.85 millions, 97 percent of which came from export royalties. Of the revenue collected from export royalties, 85 percent was from the Nile perch fishing industry on Lake Victoria.

Figure 1 – Collected revenues (mainland)

-

1.00

2.00

3.00

4.00

5.00

6.00

7.00

USD

mill

ions

Licenses, Reg'st'n 0.06 0.05 0.05 0.17 0.23

Export royalties 4.94 3.98 3.86 6.40 6.62

1998 1999 2000 2001 2002

Figure 2 – Export royalty (mainland)

-

1.00

2.00

3.00

4.00

5.00

6.00

7.00

USD

mill

ions

Marine 0.30 0.44 0.45 0.76 0.51 0.50 0.65 1.07

Freshwater 0.76 2.08 3.58 4.19 3.46 3.36 5.75 5.55

1995 1996 1997 1998 1999 2000 2001 2002

Source: FD The drop in revenue from royalties in 1999-2000 was a direct result of the EU ban on the importing of fisheries products from Tanzania, imposed in 1999 and lifted early 2000. As mentioned above, for 2003 there has been a significant increase in the number of EEZ licences sold, and licence revenues will exceed US$0.78 million, compared to US$0.23 million in 2002. When FD data on collected revenue is compared to that of the Ministry of Finance on revenue received from the fisheries sector, there are some significant divergences. Assuming revenue

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flows to be more or less consistent across months, an estimate can be made of collection on per financial year (July-June). The Ministry of Finance data (Table 5) indicates that they received significantly more from fisheries than fisheries records show was collected. The discrepancy is of such a size (US$2.50 m in 1999/0) that it is difficult to attribute it to data inaccuracies. Ministry of Finance data thus indicates that the contribution of fisheries to government spending is significantly more than the sector’s data suggests. Table 5 – Collection by fiscal year (mainland) – in US$ millions 1998/99 1999/00 2000/01 2001/02 Collection by FD 4.51 3.97 5.24 6.71 Source: FD 1998/99 1999/00 2000/01 2001/2 Total revenue received from MNR of which from Fisheries

16.79 16.74 21.85 22.92 4.32 6.47 6.76 7.36

Source: Ministry of Finance A brief analysis of how centrally collected revenue is disposed of is presented in section 6. Decentralized revenue The small amount of information that is available on decentralized revenue collection2 indicates that in the fisheries sector there is particularly poor coverage, with collected revenues between 28 percent (LVEMP, 2000a) and 31 percent (IUCN, 2000) of estimated maximum revenues.

Fishing vessel licence No. Max revenue Collected rev. Freshwater 30 537 0.061 0.018 Marine 4 927 0. 010 0.003 Fish levy Landed value Max revenue Collected rev. Freshwater 60.86 3.043 0.913 Marine 37.08 1.854 0.556 Total US$ millions 1 490 Source: Vessel numbers and catch values for 2002: FD, Table 14 As described in section 3.1, the principle fiscal instruments in use at district level are vessel licences and fish levy. Using an average annual vessel licence fee of US$2.0 per vessel (LVEMP, 2001a) and the current maximum sales tax of five percent of landed value, it is estimated that US$1.49 millions per year accrues to local governments from the fishery. Of this, 99 percent is from fish levy, and 62 percent of the total is estimated to be from freshwater fisheries.

2 There is no single central source of information on local government revenues and the following analysis has been made on the basis of field information collected during the Fish Levy Trust Study (LVEMP 2001a, covering the districts on the Lake Victoria shoreline) and that presented in the IUCN study on district revenues (IUCN 2000), which covered three coastal districts in the Tanga Region.

Table 6 – Estimate of decentralized revenue collection (mainland)

11

Prior to 2003, locally collected revenue may have been up to 12 percent higher, reflecting the broader tax base available to local government before the current budget. Overall For the year fiscal year 2001/02, total production is estimated as 338 000 tonnes, with a landed value of US$98 millions. A total of 33 000 tonnes of fish products were exported, with an FOB value of US$93 millions. Total rent capture by the government (including central and decentralized levels) is estimated at US$8.85 millions, corresponding to 9.5 percent of export value or nine percent of landed value. This is considered to be quite high, especially as it includes no estimation for revenue accruing to the state via the TRA. Tax revenue from the fisheries sector is estimated to contribute about one percent of total government revenue (1 040 billion T-shillings) for 2001/2, including non-tax revenue (BoT 2003)).

4.4 Impact of charges on the fishery There are no signs of any significant changes in behaviour in any of the major fisheries (Nile perch, shallow water shrimp and EEZ) as a result of charges made to the fishery. EEZ The management of the EEZ fishery is just beginning to mature. Recent efforts through the SADC MCS project and other initiatives have resulted in an increase in the number of licensed EEZ vessels. It is however accepted that unlicensed vessels were already fishing the EEZ prior to the recent improvements in resource monitoring. Table 7 shows the evolution of the number of EEZ licences sold. At the moment current strategy is to maximize revenue from the EEZ, and the government is attempting to increase the sale of licences. Table 7 – EEZ licences (mainland)

1998 1999 2000 2001 2002 2003 No. EEZ licences 0 1 1 6 10 39 Source: FD MCS systems for the EEZ are not yet well developed and the number of licences sold cannot as yet be taken as an indicator of the development of effort in the fishery. Shallow water shrimp In the shallow water shrimp fishery there is tendency of ever increasing effort, and a corresponding reduction in CPUE, as illustrated in Figure 3. Effort has been evaluated on the basis of a standardised fishing day, and the effort for non-standard vessels has been normalised on the basis of the product of GRT and HP. Although the method is theoretically valid, it will be compromised by mis-declaration of engine power3 and the use of differing

3 This problem led effort in EU fisheries to be standardized on the basis of GRT-days, and not HP.GRT-days. Installed power in EU fisheries is however strongly correlated with GRT, which does not appear to be the case in the Tanzanian shallow water shrimp fleet.

12

methods to measure GRT. The fact that the licence fee increases with GRT and that there exists a 500 hp/150 GRT limit to trawlers in the fishery will evidently lead to some operators attempting under-declare either or both specifications. The figure shows that there was a significant drop in effort in 2002, but with more licences than ever issued in 2003 (27), this is not considered to be a long-term trend. In the past years operators have reacted to changing conditions by increasing effort through the use of more nets and there was certainly no sign of a reduction of effort in 2000 following new (increased) licence fees. The increase in effort around 2000 could be partially as a result of increased access fees, but as the charges are small relative to gross revenue (less than 0.5 percent) this is considered to be unlikely. The latest TAFIRI mana-gement recommendation for the fishery proposed limiting effort to eight standard vessels (or equivalent). It is clear that implementation of such a measure would be difficult considering the present structure of the industry, and for the moment it appears that fisheries managers have chosen not to heed research advice. It is interesting to note that operators are beginning to become more involved in s e l f - ma n a g e me n t of the resource and were reported to have voluntarily ceased fishing early in the 2003 season on account of low CPUE. The contribution of small- scale shrimp fisheries to total catch and effort appears to be in general either underestimated or ignored in official statistics. A recent study in the Rufiji delta (REMP 2002) estimated that the artisanal sector supplied more than 2 000 tonnes/year of shrimp implying total catches (including the industrial sector) in excess of 3 000 tonnes/year (cf 2 000 tonnes/year in Appendix Table 6.). The contribution of small scale fisheries is becoming ever more important as commercial export-orientated links with the sector improve.

• Nile perch In the Nile perch fishery the picture is similar, with continuously increasing effort and corresponding decrease in CPUE. Although there is no data available on total effort in the fishery (summing all gear types), taking the number of gillnets (the primary gear in the fishery) in use as an effort indicator, the development of effort and CPUE is as illustrated in Figure 4. Data for longline fishing effort, although considered by the FD less reliable, shows a 6 fold increase between 1998 and 2002.

Figure 3 – Effort and CPUE in the shallow water shrimp fishery

0.0

0.5

1.0

1.5

2.0

2.5

1996 1997 1998 1999 2000 2001 2002 2003

Year

0

5

10

15

20

25

30

Nº

act

ive v

ess

els

Nº Active vessels

Std CPUE (1996=1)

Std Effort (1996=1)

Effort standardised on (GRT x HP) days

2003 data: Nº licenses sold

Source: All data from FD. Analysis under this study.

13

There is no sign of any change in the fishery as a result of fiscal measures. Effort has developed following investment in the production chain by processing factories and steadily increasing producer prices. Recent changes in local taxation (which reduced local tax) may improve producer prices further, attracting more entrants to the fishery, which continues essentially open access without effort manage- ment.

5. CHARGES – ZANZIBAR

5.1 Description The charges that can be levied on the fishery by the fisheries department are set out in the Fisheries Act 1988, and were last revised in July 2000. Vessel registration As for the mainland, all vessels are subject to a once off registration fee, but in Zanzibar this can only be sanctioned by the fisheries department. The charge is fixed and does not vary with vessel size. Charge basis Accruing to Collected via Charge rate Any vessel Once off Gov. of Zanzibar FDZ US$2.0

Vessel licence Vessels must also pay an annual licence, which for artisanal vessels varies with LOA and type of propulsion, as detailed in Appendix Table 2. Vessels applying to fish in the EEZ are charged a flat rate per GRT. Charge basis Accruing to Collected via Charge rate Artisanal vessel Annual Gov. of Zanzibar FDZ US$1.0 - 10.0 Sport fishing vessel

Week, month or year

US$6 - 30

EEZ vessel Annual US$80/GRT EEZ licence fees stand to dominate revenues from the fisheries sector. In 2003 the revenue earned from EEZ licences alone will be over 3 times the total revenue collected from the fisheries sector in 2002.

Figure 4 – Effort and CPUE in the Nile perch fishery

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

1995 1996 1997 1998 1999 2000 2001 2002 2003

Year

Gillnet Effort(1996=1)

CPUE (1996=1)

hollow datapoint: based upon interpolated effort data

Source: FD

14

Fisher licence Fishers must also purchase an annual licence from the fisheries department. This too varies in cost depending upon the size and propulsion of vessel the fisher uses Appendix Table 2. Charge basis Accruing to Collected via Charge rate Artisanal fisher Annual Gov. of Zanzibar FDZ US$1.5 - 10.0

Export royalty As on the mainland, exporters of fisheries products must pay a Royalty to the FDZ. In the case of Zanzibar the royalty is calculated on an ad valorem basis, at a fixed rate irrespective of the product. Charge basis Accruing to Collected via Charge rate Export Royalty Per kilo Gov. of Zanzibar FDZ 6% of value

Up until 2003 export royalties were the largest contributor from the fisheries sector, making up (in 2002) over 70 percent of collected revenue. There is no information available on revenues accruing to village committees.

5.2 Origin, purpose and legal status Instrument Origin Purpose Legal status Observations Vessel registration fee

• Fisheries Act 1988 • Fisheries Regulations 7/2000, allowing Minister to issue licences, prescribe terms and fees of licensing, require registration and licensing.

Control of vessels operating in the fishery, register of ownership and vessel details.

Rate last revised in 2000. Currently under revision as part of writing of new Fisheries Act, expected to be ratified by first quarter 2004

Annual vessel fishing licence

Idem Revenue generation (EEZ fisheries); Statistical indicator.

Idem Potential use in management of both small scale and industrial fisheries – operator “buys into” the resource.

Annual fisher licence

Idem Statistical indicator.

As above

15

Instrument Origin Purpose Legal status Observations Export Royalty

Idem Revenue generation; Resource rent.

Idem Charged at 6% of total value until 2000, then by value per kilo

5.3 Revenues raised Detailed information on values remitted form the various fiscal instruments is presented in Appendix Table 11 and summarised in the figures below. The low levels of revenue collection are notable. In 2002 the FDZ collected a little over US$60 000, 60 percent of which was from royalties on seaweed export. The impact of increased sales of EEZ licences in 2003 is evident in Figure 5.

Figure 5 – Collected revenues (Zanzibar)

-

0.020

0.040

0.060

0.080

0.100

0.120

0.140

0.160

0.180

USD

mill

ions

Licenses, Reg'st'n 0.039 0.059 0.013 0.017 0.162

Export Royalties 0.045 0.048 0.026 0.037 0.045

1998 1999 2000 2001 2002 2003

no datano data

EEZ licenses only

Figure 6 – Export royalty (Zanzibar)

-

0.005

0.010

0.015

0.020

0.025

0.030

0.035

0.040

0.045

0.050

USD

mill

ions

Others 0.003 0.006 0.002 0.004 0.007

Seaweed 0.042 0.042 0.024 0.033 0.038

1998 1999 2000 2001 2002

No information was available on revenues collected at village level (for village government), but based on the same maximum rate of sales tax (fish levy) as the mainland (5 percent), total landing of 22 000 tonnes (Appendix Table 7), an average landed value of US$0.5/kilo and 40 percent coverage, total local revenues are estimated to be around US$220 000 per annum, over 3.5 times that accruing to central government. Total taxation based on 2002 data is estimated as US$280 000 on product with a landed value of US$11 millions, equivalent to 2.5 percent of landed value.

5.4 Impact of charges on the fishery Total production data for the artisanal fishery (Appendix Table 7) indicate consistently increasing catches over the past five years, but no data was available as to how effort had developed, and it is therefore not possible to make any judgement as to how charges have influenced effort. As with mainland Tanzania, the sales of licences in the EEZ fishery has increased dramatically to 78 in 2003 (Appendix Table 10), over twice that of the mainland. This will be partially due to MCS initiatives and also a pro-active stance by the Government of Zanzibar to sell EEZ licences via an appointed agent/broker located abroad. Again, as with the mainland, licence sales is not considered a reliable indicator of effort.

16

From the previous section, it is apparent that charges made at village level on the fishery are very much greater than those made at the centre. It was reported both in Zanzibar and on the mainland that there is an increasing tendency to focus such charges on fishers from outside of the community (short-term migrants). Depending upon the scale of charges and their significance amongst other production costs, this may encourage more sedentary fishing practises. 6. APPLICATION OF FUNDS At central level the government evidently retains control as to how collected revenues are applied in the economy, and this is examined briefly in this section. Revenues collected at decentralized levels are all applied at the village (Zanzibar) or district (mainland) according to the priorities of local administrations.

6.1 Tanzania mainland The Fisheries Department has been allowed by the Ministry of Finance to operate a “Retention Scheme” whereby a percentage of collected revenue can be retained by the sector for use in development of the sector, effectively pre-consigning revenue to the sector of origin. During budgeting, projection is made of revenue to be collected, and the department’s annual budget then developed on the basis of the retention of a percentage of that revenue. Should revenue collection exceed the projection, surplus funds are taken into the treasury’s consolidated funds, and not retained in fisheries. In practice the Fisheries Department does not itself operate the retention scheme, any and all collected revenue is deposited with the Ministry of Finance which in turn transfers funds (according to the department’s budget) directly to the MNRT’s current account. Under the terms of the retention scheme the MNRT is in turn permitted to take up to 6 percent of retained revenues for administrative purposes, and the remaining 94 percent is then the Fisheries Department’s annual budget. In principle, retention schemes are short-term (3 years) arrangements whose objective is to facilitate the reinvestment of funds in the sector from which revenue is collected, with the specific aim of generating further revenues from that same sector. Should a sector operating a retention scheme show improved revenue generation, the arrangement can be extended. In the case of fisheries, the scheme started in 1997 and revenues and degree of retention are such that the Fisheries Department receives no further budget allocation from consolidated treasury funds.

Table 8 - Collection and retention by fiscal year (mainland) – In US$ millions

Source: Ministry of Finance

1998/99 1999/00 2000/01 2001/02Total revenue collected by MNRT 16.79 16.74 21.85 22.92 of which from Fisheries 4.32 6.47 6.76 7.36 1998/99 1999/00 2000/01 2001/02Total revenue retained by MNRT 8.33 7.88 12.54 12.35 of which for fisheries 3.17 2.71 3.91 4.00 Agreed rate of retention 100% 100% 91% 85%Actual rate of retention 73% 42% 58% 54%

17

Note that actual rates of retention are consistently below projected (agreed) rates of retention for the sector. This may be due to a combination of i. the Fisheries Department collecting more revenue than they projected (any surplus is retained by Finances), and ii. The Ministry of Finance not allowing all of projected retention due to other priorities in the economy. Annual expenditure by the Fisheries Department (excluding donor support) is shown in Table 9. The difference between that which the department spends and that which was sent back to the sector by the Ministry of Finance via the retention scheme is presumed the margin taken by the MNRT. This amounted to 25 percent and 11 percent of retained revenue in 1999/2000 and 2001/2002 respectively, considerably above the agreed margin of 6 percent.

Table 9 – Fisheries Department annual expenditure (mainland) – In US$ millions

1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 Fisheries expenditure 1.29 0.49 no data 2.05 no data 3.57 Source: FD For 2001/2 the Ministry of Finance received US$7.36 millions from the fisheries sector. The sources of revenue and its allocation can be summarised as illustrated in Figure 7.

Figure 7 – Central government revenue sources and allocation, 2001/2 (mainland)

Royalties (Freshwater)

76%

Licenses (EEZ)2%

Other licenses0%

Undefined9%

Royalties (Marine)12%

Licenses (Shrimp)1%

Sources of revenue

Fisheries Sector48%

Treasury46%

MNRT Overhead6%

Allocation

6.1 Zanzibar Zanzibar also operates a retention scheme for revenues from the fisheries sector, but it was only introduced in 2003 and the fundamental modalities of operation (such as degree of retention) are yet to be established. Before the introduction of the retention scheme, all revenue accruing to central government via the Fisheries Department was remitted to the treasury and the department relied on normal budget finding via the Ministry of Agriculture. Annual expenditure by the Zanzibar Fisheries Department is shown in Table 10.

18

Table 10 – Fisheries Department annual expenditure (Zanzibar) – In US$ millions

1999/00 2000/01 2001/02 Fisheries expenditure no data 0.078 0.095 Source: FDZ For 2001/2, expenditure was 17 percent of estimated revenue collection, and the treasury made a net contribution to the sector of US$40 000. In 2003 the situation should be fundamentally different and the sector should be a net contributor to government revenue, principally due to increased EEZ licence revenues. 7. CONCLUDING REMARKS • The mechanism for the collection and allocation of central revenues on mainland

Tanzania is both efficient and effective. More than 50 percent of total collected revenue from the sector is directed back to fisheries via the retention scheme. This may be considerably less than that anticipated in the annual agreed rate of retention, but considering that the budgeting mechanism is obliged to underestimate revenue (to avoid the possibility of having insufficient funds for planned interventions) and that there is evidently high demand for finds in other sectors of the economy, the overall rate of retention is considered satisfactory.

• Decentralized revenue collection is by nature difficult to make effective and efficient. Costs of collection are high and it is difficult to establish effective systems to ensure reasonable rates of coverage. However it is estimated that in mainland Tanzania some US$3 millions per year of decentralized revenue is uncollected from the fishery. Should it be possible to increase effective coverage rates from 30 percent to 50 percent, a further US$1 million per year would be raised for local administration. Effective coverage is a function of not only the physical coverage of sales tax on transactions but also the mechanism in use for the collection of such revenue. Under the current implementation of the collection of local revenues via private collecting agents, physical coverage is potentially very high, but agents are permitted large margins and values received by local administration are estimated (LVEMP, 2001a) as only 40 percent of what is actually collected from the fishery. Local governments stand to gain significantly through improvements to the tendering process for the selection of collection agents.

• Total taxation of fisheries in mainland Tanzania already appears high, at nine percent of landed value, in spite of the inefficiencies in local taxation. Total taxation in Zanzibar is estimated at 2.5 percent of landed value.

• It is apparent that, in the immediate future, the greatest potential for the increasing of revenues from the sector (in both Zanzibar and mainland Tanzania) is via the licensing of EEZ fisheries. This will however require investment to establish appropriate institutions (a deep sea fisheries authority is already being discussed in Tanzania) and to institutionalise MCS activities. Without the latter, revenues from EEZ fisheries will be unreliable. Further investigation will be required on the feasibility of increasing EEZ licence fee rates, the structure of penalties and their legal foundation. This may form part of a forthcoming initiative focussing on marine resources, to be funded by GEF /IDA.

19

• Revenue generation from the fisheries sector in Zanzibar is very small compared to that of mainland Tanzania. This reflects both the scale of fishery and the view held until recently that the fishery has more social than economic importance. However, although the recent increase in revenue from the EEZ fishery has already caused this view to start to change, the real earning potential for the EEZ still requires further analysis so that realistic goals can be set.

• There is no evidence in the data presented in this study of changes in effort (and stock recovery) as a result of fiscal measures in the fishery. The brief analysis of effort and CPUE development made in this study points to the need for enhanced management measures in both of the major mainland fisheries: shallow water shrimp and Nile perch. The analysis of catch and effort in the shallow water shrimp fishery clearly needs to be expanded to include that of the artisanal sector, whose production is, according to some sources, up to twice that of industrial fisheries.

• The drop in revenue from mainland fisheries in 1999/2000 (when the EU banned the import of fisheries products from Lake Victoria on health grounds) underlines the dependence of government revenues on foreign market access, and consequently vulnerability to issues such as EU regulations that may impede access to such markets.

• Aquaculture currently makes no significant contribution to revenue generation in mainland Tanzania, in spite of it being a recognized policy priority. In Zanzibar, the culture of seaweeds makes significant contributions to export royalty earnings from the sector, but absolute values are low at under US$40 000 per year. The real value of seaweed culture is considered to be at community rather than central level. The potential for the mariculture of shallow water shrimps in (mainland) Tanzania is yet to be realized.

20

REFERENCES BoT. 2003 Economic Bulletin for quarter ended 3/03

BoT. 2001 Bank of Tanzania Economic Operations Report 2001\

IUCN. 2000. Feasibility of Improving District Revenues from the Fisheries Sector, Horrill J.

IMS. 1997. Fisheries Stock Assessment in the Traditional Fishery Sector

LVEMP. 2001a. Fish Levy Trust Study, Wilson J.D.K et al.

LVEMP. 2001b. The contribution of Lake Victoria fisheries to the Tanzanian economy. Kulindwa K.

MNRT. 1997. National Fisheries Sector Policy and Strategy Statement. URT 1997

REMP. 2002. An analysis of smallholder opportunities in fisheries, coastal and related enterprises in the floodplain and delta areas of the Rufiji River, Tanzania. Richmond, M.D., Wilson, J.D.K., Mgaya, Y.D. & Le Vay, L.

RGZ. 1999. Agricultural Sector Policy. Revolutionary Government of Zanzibar

TCMP. 1999a. Tanzania Mariculture Investors Guide. TCMP & Mariculture Working Group

TCMP. 1999b Tanzania Mariculture Issue Profile. TCMP & Mariculture Working Group

URT. 2003. The Economic Survey 2002. United Republic of Tanzania

21

APPENDIX I.

Appendix Table 1 – Vessel licence and registration rates (mainland)

Appendix Table 2 – Vessel and fisher licence rates (Zanzibar)

Unit

Vessel Size categorywith shore based

processingwithout shore based

processingwith shore based

processing without shore based processing

Registration Trawler 20-150 GRT 68.0 101.0 4,000 48,000 US$Finfish vessel <11 m 1.7

1.7

prohibited prohibited US$

11-15 m 4.8 4.8 600 1,200 US$15-20 m 9.6 12.0 84 2,400 US$20-150 GRT 34.0 48.0 1,200 12,000 US$150-200 GRT 48.0

120.0

2,400

14,400 US$

200-250 GRT 120.0

180.0

3,000 16,800

US$250-300 GRT 180.0 240.0 3,600 19,200 US$>300 GRT 240.0 298.0 4,800 21,600 US$Sport 6.7 6.7 120 120 US$

Annual vesse licence Finfish vessel <11 m 1.2

1.2

prohibited prohibited US$11-15 m 2.4 2.4 prohibited prohibited US$15-20 m 3.0 4.8 prohibited prohibited US$

Trawler or Finfish vessel 20-50 GRT 2.4 4.8 23 54 US$50-100 GRT 3.6

6.0

30

72

US$100-150 GRT 4.8 9.0 38 90 US$

Finfish vessel 150-200 GRT 6.0 11.0 45 108 US$200-250 GRT 7.2

12.6

53

126

US$250-300 GRT 8.4 16.2 60 144 US$>300 GRT 9.6 18.0 60 162 US$Sport 24.0

24.0

24

24

US$Annual fishing licence crustaceans Trawler 20-50 GRT 2.4 4.8 23 54 US$/GRT

50-100 GRT 3.6 6.0 30 72 US$/GRT100-150 GRT 4.8 9.0 38 90 US$/GRT150-200 GRT 6.0

11.0

45

108

US$/GRTFinfish Finfish vessel <11 m 1.8

1.8

prohibited prohibited US$

11-15 m 6.0 6.0 prohibited prohibited US$15-20 m 12.0 12.0 prohibited prohibited US$20-50 GRT 1.2

1.2

11

27

US$/GRT50-100 GRT 1.8

3.0

15

36

US$/GRT100-150 GRT 2.4 4.5 19 45 US$/GRT150-200 GRT 3.0 5.4 23 54 US$/GRT200-250 GRT 3.6

6.3

26

63

US$/GRT250-300 GRT 4.0

8.0

30

72

US$/GRT300-350 GRT 4.8 9.0 30 81 US$/GRT350-400 GRT 5.2 9.6 38 90 US$/GRT>400 GRT 6.0

12.0

41

99

US$/GRT

Tanzanian vessel Foreign vessel

Size Propulsion vessel license fisher licence<3 m Non motorized 1 000 1 500

with outboard engine 1 500 1 800 with inboard engine 2 000 2 000

3-5 m Non motorized 2 500 2 000 with outboard engine 3 000 2 500 with inboard engine 4 000

3 000

5-7 m Non motorized 3 500 3 000

with outboard engine 5 000 4 500 with inboard engine 6 500 6 000

7-10.5 m Non motorized 6 000 7 500 with outboard engine 8 000

8 500

with inboard engine 10 000 10 000

sport fishing 2 weeks 6 000

1 month 10 000

1 year 30 000

22

Appendix Table 3 – Export royalty rates (mainland)

Prawns Frozen at sea Frozen ashore

Headless 1-15 0.89 0.8616-25 0.84 0.8126-40 0.72 0.6941-60 0.66 0.6361-80 0.48 0.4581-100 0.36 0.33101-150 0.32 0.29151-200 0.26 0.23>201 0.19 0.16

Whole 1-10 0.82 0.7911-15 0.71 0.6916-24 0.67 0.6425-36 0.65 0.6437-48 0.47 0.4549-60 0.33 0.361-90 0.27 0.24>90 0.24 0.21

Appendix Table 4 – Number of artisanal fishers and vessels (mainland)

Source: FD

Appendix Table 5 – Effort indicators for major fisheries (mainland)

Source: FD Note trawling days presented above are not standardized between vessels.

Freshwater fishery products Processing US$/KgFillets Fresh/chilled/frozen 0.15Dry Nile perch Dry 0.18Fish maws Dry 0.36Fish maws Fresh 0.18Belly flaps Fresh/chilled 0.075Off cuts Fresh/chilled 0.075Fish meal Dry 0.012Fish frames 0.009Dagaa L. Victoria 0.042Dagaa L. Tanganyika 0.072Aquarium fish Fresh water/sea water 6% advaloremSea shells All types 6% advalorem

Lobster Live 0.9Whole frozen 0.42Tails 1-4cm 0.48

4-6cm 0.546-8cm 0.578-10cm 0.6310-12cm 0.7512-14cm 0.84>14cm 0.9

Caridean prawns 0.72Squid/Shrimp kebab 0.3Crabs Live 0.6

Frozen/chilled 0.3Octopus Frozen/chilled 0.15Squid 0.18Shell meat 0.06Sea cucumber 10-20/kg 1.2

21-30/kg 1.08>31 0.9

Shark Fins <10cm 0.6610-20cm 1.0820-30cm 1.230-40cm 1.5>40cm 1.8

Seaweeds Euchema 0.024Garcillaria 0.03Gigartana/others 0.051

1998 1999 2000 2001 2002Number of Artisanal Fishers 78 672 93 669 92 529 112 937 119 372

Marine 20 625 20 625

20 625

19 293

19 765

Freshwater 58 047 73 044 71 904 93 644 99 607

Lake Victoria 32 403 44 500* 56 258 68 000* 80 000 Other freshwater 25 644 28 544 15 646 25 644 19 607

Number of Artisanal Fishing Vessels 22 298 26 480 30 171 33 250 35 464 Marine 5 157 5 157 5 157 4 925 4 927 Freshwater 17 141 21 323 25 014 28 325 30 537

Lake Victoria 7 618 11 800* 15 491 18 800* 21 631 Other freshwater 9 523 9 523 9 523 9 525 8 906

*

interpolated data

1996 1997 1998 1999 2000 2001 2002Lake Victoria, Nile Perch

Number of gillnets in use 109 342 110 000* 119 676 155 000* 206 564 270 000* 350 452 Number of hooks in use 1 419 687 675 030 2 201 901 4 577 196

Marine industrial shrimp fisheryNumber of trawling days 1 779 2 091 2 778 2 202 3 352 3 882 2 500 Declared industrial catch 782 430

699 059

995 564

688 006

909 715

1 192 019 926 079

* interpolated values

23

Appendix Table 6 – Catch weights and landed values (mainland) – Value in TShs billions

Source: FD

Appendix Table 7 – Catch weight (Zanzibar) – In tonnes

Source: FDZ

Tonnes Value Tonnes Value Tonnes Value Tonnes Value Tonnes Value Tonnes Value Tonnes Value

Nile perch 120 000

124 622

150 000

22.50

100 000

15.00

90 000

14.94

96 000

15.41

92 000

23.00

Shrimp 2 300

2.76

2 100

3.15

2 100

4.20

2 000

4.00

2 000

5.00

Dagaa (freshwater) 46 800 9.36 42 000 8.40 4 000 8.00 43 000 8.60 43 000 8.60 Dagaa (marine) 4 450 0.45 14 000 1.40 15 000 1.50 15 000 1.50 14 000 1.40 Lobster - - - - - Cephalopods - - - - - Marine finfish 41 250 26.07 33 900 28.95 32 800 26.48 35 935 28.61 33 675 26.97 Other freshwater finfish 103 200 15.63 118 000 20.62 141 000 22.56 144 354 23.10 138 850 23.17 Dried seaweeds 4 000

- 4 500

- 5 000

- 5 000

- 4 500

- EEZ fisheries 131

- 2 187

- - 2 506

- 4 904

- Total 352 131 77 316 687 78 289 900 78 343 795 81.22 332 929 88.14

19971996 2002 1998 1999 2000 2001

1998 1999 2000 2001 2002Total 13 637 14 444 17 922 20 541 22 393

24

Appendix Table 8 – Export royalty revenue (mainland) – Value in TShs

Export royalty revenue (mainland) in US$ millions

Source: FD

1995 1996 1997 1998 1999 2000 2001 2002 NP Fillets 382 046 141 1 185 728 962 1 987 549 609 2 595 481 432 2 257 832 543 2 184 070 656 4 022 462 279 4 421 282 607 NP H&G 185 216 394 144 929 830 231 447 685 NP Belly 2 594 374 7 092 968 55 731 506 57 908 908 5 310 920 23 386 127 234 918 221 31 812 516 NP Offcuts - - 2 924 475 4 125 195 4 137 529 1 681 766 3 011 472 11 432 568 NP Skin 785 530 190 91 942 371 NP Mas 29223026.2 14 919 175 93 814 373 64 560 055 28 198 020 194 583 150 221 332 101 163 206 046 NP carcass 1 896 087 47 360 15 208 864 3 019 135 1 150 059 4 044 001 Dried NP 2 130 020 7 231 663 3 902 196 12 663 708 - 3 959 822 1 038 386 NP chips - 1 421 185 2 949 146 - - Fishmeal - - 11 574 791 8 017 308 7 453 280 10 962 403 31 058 026 14 218 269 Offal 17 752 566 12 735 733 14 115 487 14 238 307 8 292 315 34 138 343 23 074 287 13 952 988 Fish oil 288 - 23 979 258 537 - Fresh dagaa 24 541 53 766 - - Dagaa 14 053 626 10 197 820 40 577 149 21 431 666 18 121 811 20 488 238 15 877 214 5 014 863 Dried fish 168 000 - 43 742 - 5 486 665 2 122 237 Aquarium fish 463 364 3 065 199 5 621 977 5 919 784 3 676 144 11 925 797 9 753 436 8 524 866 Prawns 146 379 059 205 463 545 153 376 873 419 627 293 227 057 572 269 544 981 389 816 633 599 681 243 Lobster 4 825 175 1 147 15 821 145 9 754 868 36 697 887 17 387 403 40 590 682 78 670 528 Crabs 136 668 1 522 747 1 711 139 4 000 470 1 135 273 6 870 866 32 810 403 10 927 960 Beche 10 574 453 14 333 871 25 229 266 8 031 600 11 661 107 22 072 036 8 629 745 855 985 Octopus 14 637 857 35 514 798 61 743 903 42 120 667 58 663 832 56 023 002 31 903 874 87 073 400 Squid 738 170 1 460 945 9 123 851 1 215 418 4 475 028 3 148 705 18 102 452 20 413 710 Shells 1 183 847 1 224 618 5 015 538 1 191 394 3 852 734 5 288 492 9 669 478 13 859 226 Shark fins 415 160 343 854 203 359 170 519 331 161 3 099 157 1 903 526 Marine F - - 4 769 789 15 550 246 3 540 150 Marine fillets - - 1 096 159 932 462 - Weeds - - 59 845 - - Live crabs 3 300 - - - - 6 457 800 73 815 299 Live lobsters 131 221 354 087 - - - 8 875 898 78 484 476 Total 629 376 943 1 502 713 439 2 512 188 161 3 290 218 972 2 687 074 029 3 071 388 237 5 244 333 671 5 957 654 992 Freshwater 450 352 034 1 242 493 829 2 234 037 294 2 787 624 034 2 339 659 286 2 672 619 897 4 710 906 878 4 993 873 165 Marine 179 024 910 260 219 611 278 150 867 502 594 938 347 414 743 398 768 340 533 426 793 963 781 827

1995 1996 1997 1998 1999 2000 2001 2002 Freshwater 0.76 2.08 3.58 4.19 3.46 3.36 5.75 5.55 Marine 0.30 0.44 0.45 0.76 0.51 0.50 0.65 1.07 Total 1.06 2.52 4.03 4.94 3.98 3.86 6.40 6.62

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Appendix Table 9 – Export royalty revenue (Zanzibar) – Value in TShs

Source: FDZ

Appendix Table 10 – Vessel registration, licensing and other revenue streams (mainland) – Value in TShs Source: FD

Nº Revenue Nº Revenue Nº Revenue Nº Revenue Nº Revenue Nº Revenue

Vessel registration - - - - - -Annual fishing licence (local waters)

Trawler (national) 17 19 906 097 16 19 259 024 20 25 922 860 20 35 492 913 23 47 943 052 25 53 862 189 Other (national) 7 12 895 985 EEZ (foreign) 1 7 601 000 1 8 712 000 6 95 256 000 10 148 347 000 39 715 050 000

Collecting, fishing, dealing 2 1 766 162 2 1 779 968 5 1 914 100 3 1 172 365 3 1 819 900 -Export licences 91 2 766 160 102 3 209 802 112 3 669 391 70 6 599 331 78 7 778 536 -Total

37 334 404 31 849 794 40 218 351 138 520 609 205 888 488

Value in US$ millions 1998 1999 2000 2001 2002 2003 Fishing licences 0.05 0.04 0.04 0.16 0.22 0.77 Others 0.01 0.01 0.01 0.01 0.01 Total 0.06 0.05 0.05 0.17 0.23

2003 20021998 1999 2000 2001

1998 1999 2000 2001 2002Seaweed 27 793 500 28 115 000 19 080 650 27 391 050 34 604 260 Marine fish 107 000 74 986 35 740 5 100 2 000 Marine fillets Lobster 750 435 510 7 495 31 680 645 060 Shrimp 248 690 646 595 35 175 16 850 1 150 Cephalopods 738 002 1 676 093 670 337 1 817 649 3 549 655 Others (shark fins, scar...) 1 202 295 1 350 955 1 066 445 1 099 960 1 652 867 Total 30 090 237 32 299 139 20 895 842 30 362 289 40 454 992

1998 1999 2000 2001 2002Seaweed 0.042 0.042 0.024 0.033 0.038 Others 0.003 0.006 0.002 0.004 0.007 Total 0.045 0.048 0.026 0.037 0.045

26

Appendix Table 11 – Vessel registration, licensing and other revenue streams (Zanzibar) – Value in TShs

Source: FDZ

Nº Revenue Nº Revenue Nº Revenue Nº Revenue Nº Revenue Nº Revenue

Artisanal vessel and fisher licences 3 999 625 3 955 065 3 727 218 7 065 175EEZ vessel licence 16 22 400 000 26 42 600 000 4 6 600 000 5 8 500 000 78 162 200 000 Total 26 399 625 46 555 065 10 327 218 15 565 175

Value in US$ millions 1998 1999 2000 2001 2002 2003 Artisanal vessel and fisher licences 0.006 0.005 0.005 0.008EEZ vessel licence 0.033 0.054 0.008 0.009 0.162 Total 0.039 0.059 0.013 0.017

2003 20021998 1999 2000 2001

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APPENDIX II.

TERMS OF REFERENCE

Under the general supervision of the Chief, FIPP, the consultant will:

a) Collect information on the fiscal strategy for the fisheries and aquaculture sector of Tanzania, as part of a general review of payments by the fisheries sector to the public administration being carried out principally in Africa in preparation for a workshop on the subject.

b) Specifically, study changes such as licence (for right to fish; for boats, for fixed

gear, etc.); landing fees (linked to the number of landings, or volumes of fish landed); quota fees and export taxes, and other transfers if ascertained to be important.

c) Examine the origins, and purpose, and legal status, as well as value or tonnage

involved annually for each sector of the industry as well as the evolution of the use of the funds received and the involvement of institutions.

d) Assess overall impact of the transfer payments with regard to each major fishery,

as well as aquaculture along with direct and indirect effects, and influence on the sector and if there has been a reduction in effort and recovery of stocks.

A report will be produced by the consultant in electronic and hard copy and delivered to the Chief FIPP before31 October. Travel will involve two trips Maputo – Dar-es-Salaam (7 days) – Maputo, and Maputo – Dar-es-Salaam (7days) – Maputo. Duration of the WAE contract (including 14 days Dar) will be 25 days – Duty station Maputo.

TR/D/J2760/E/07.04/600