They want the Tanzania Revenue Authority (TRA) to cut 75% off the new ETS rate set at $18.37 (42,434/-) levied) on 100 stamped items which came into effect on Monday.
Leodegar Tenga, executive director of the Confederation of Tanzanian Industries (CTI), told a news conference yesterday that the new rate is just an 8.15% cut from the $20 ($46,187/ -) taken previously.
Manufacturers believe that this difference is minor and that the stamp duty is a tax burden on operating costs, hampering local competitiveness in the East African and wider market.
There is only a 4% discount offered in the new fares on all beverages and alcoholic beverages compared to previous ETS fares, he said.
“Our appeal to the government is justified by TRA’s own reports which show an increase in economies of scale due to the increase in the number of manufacturers registered with the ETS from 57 when the system was adopted at the end of 2019 to 272 more recently,” he said. , noting that the results indicate that other ETS providers provide this service at 50% of the new tariff;
“What hurts is that the money taken goes directly to a foreign company that does the work while the government earns nothing,” he said, urging that “in the near future, the government should consider awarding such tenders to local businesses through open bidding.”
Coca-Cola Kwanza Ltd Managing Director Unguu Sulay noted that last year when the ETS tax was US$20, they paid US$200/- to have a case of 24 bottles of soda stamped. With the deduction they pay since Monday 194/- cash.
“We support the use of the ETS on the grounds that it ensures transparency in business operations and combats under-declaration and the proliferation of illicit goods in the market. But the levy must be sound for the management of our businesses,” he said.
Paul Makanza CTI Board Chairman said manufacturers appreciate that in the new changes the ETS is paid for in Tanzanian currency, but they are not encouraged that there has been a insignificant reduction in rates.
“Based on the positive engagements we’ve had with TRA and other government entities backed by an independent fare enforcement study, we still end up with anticipation of significant ETS costs,” Makanza said.
Manufacturers should be involved in the review process as key stakeholders, he said, demanding that the review mitigate the impact on industries that are already burdened with value-added tax and tax. excise duties, as well as fees associated with the industrial sub-sector.
Jose Moran, managing director of Tanzania Breweries Ltd, said tax reform planning should take into account that manufacturers are struggling to recover from the impact of the COVID-19 pandemic on their businesses.