The Impact Of Taxation On Gum Arabic Production And Export In Sudan

Abstract

The objectives of the study were to determine the effects of various types of taxes, dues and fees imposed on production and export of gum Arabic. The study used a number of secondary sources of data, blew: Gum Arabic Statutory Company, Zakat organization, the Chamber of Taxes, the Customs Authorities, Bank of Sudan…, etc. These data have covered the period from 1970 up to 2006 and included the export price, delivery price, floor price, total purchases, total export as well as the tax dues imposed at various points in the producing states. Specifically, this included the export price received by the company, delivery price paid by traders to producers, floor price paid by the company directly to the producer. Legally, the Gum Arabic Company is supposed to be the main exporter of this product. There was very clear fluctuation in the export of the product due to a number of causes; e.g. high taxes and dues as well as smuggling which is caused by high taxes. Using the multiple regression, descriptive analysis and normal distribution, the following findings were obtained:- • The export price as a dependent variable was influenced by the export price in the preceding year, the floor price and delivery price as independent variables • The total purchases as a dependent variable was influenced by the floor price, export price and delivery price as independent variables. iv • Despite reduction in government dues from 35in 1970s to 18 items in 2006, they still high for both producers and exporters. • The producers often have lower revenue than the exporter. • The government stopped their collection of roods fees and taxes on crossing agricultural commodities but is still charged. • There is double taxation on gum Arabic e.g. the tax collected by the branch offices in states and by the main office in Khartoum. • A lot of illegal dues and fees collected on the roads imposed by the localities (recently stopped). The study recommended that in order to maintain the position of the Sudan in gum Arabic trade, primary producers must be given a fair share of income earned by exporters. All production and export taxes and fees should be reduced, particularly at state level to avoid double taxation. The government should stop smuggling by reducing taxes. Support of General Sudanese Farmers Union must be stopped, because it is imposed only on gum Arabic. Furthermore, the Stamp of War Wounded should be stopped by the government.