Tanzania to address manufacturers’ tax concerns

The government has hinted on the possibility of reviewing excise duty in the forthcoming budget following the concerns expressed by some manufacturers that it was undermining their operations.

The Minister for Industry and Trade, Dr Abdallah Kigoda, said in an interview that one possible area was either to reduce the excise duty or leave as it is for one or two years to determine predictability of their business.

He said they had met with some manufacturers including representatives of Tanzania Breweries Limited (TBL) and Tanzania Cigarette Company (TCC) to discuss how the problem could be solved.

“Their concerns are genuine. We have asked them to give us their proposals but one of the possible areas is to either lower it in the next budget or leave it unchanged for one or two years to determine predictability,” he said.

The government increased excise duty rates for alcoholic drinks by 20 per cent in the 2014/2015 budget. It also increased duty rates for tobacco products by 25 per cent.

TBL and TCC, both listed on the Dar es Salaam Stock Exchange, are among the top three large taxpayers in the country.

“Their complaints are genuine concerns and in some cases reflect in declining sales volume and profit,” he said adding that the manufacturers were earning less and so was the government in terms of tax revenue.

“We have received their complaints and we are working on them,” he added. He said the Ministry of Finance and Economic Affairs was consulted in the discussions on how to solve the problem.

Local brewing companies have complained over increased excise duty for their products saying it was counterproductive as it undermined growth.

Excise Duty is charged on specific goods and services manufactured locally or imported on varying rates. It is charged in both specific and ad valorem rates.

Items charged under specific rates include wine, spirits, beer, soft drinks, mineral water, fruit juices, Recorded DVD,VCD,CD and audio tapes, cigarettes, tobacco, petroleum products and Natural gas.

Items charged under ad-valorem rates include money transfer services, electronic communication services, pay to view television services, imported furniture, motor vehicles, plastic bags, specified aircrafts, firearms, specified cases, cosmetics and medicament.
Source: Daily News, reported by Henry Lyimo, from Dar es Salaam, Tanzania

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