Counterfeit goods are causing serious damage to Tanzania’s economy, according to a report in The East African. One of the most significant effects of the prevalence of counterfeit goods is the loss of foreign direct investment, as legitimate companies are not willing to invest in an environment where they are forced to compete with counterfeit goods. Another significant problem is the health risks associated with counterfeit medicines and foods.
According to the Confederation of Tanzania Industries, somewhere around $450 million dollars in tax revenue is being lost by the Tanzanian government as a direct result of tax evasion related to counterfeits and substandard goods, an amount accounting for between 15% and 25% of total domestic revenue. China is the largest source of counterfeit goods, followed by India, the UAE, Indonesia, Taiwan and Thailand.
A key factor in economic development is a business environment in which businesses can invest and make profits in exchange for providing useful goods and services to members of the public. Each of the major East African countries has anti-counterfeiting laws, but they are difficult to enforce because the presence of counterfeit goods is so widespread.