TBL Group urges govt to drop e-tax stamps
Deputy minister for Industry, Trade and Investment Stella Manyanya speaks to TBL Technical director Jemedari Waziri when Members of the Parliamentary Standing Committee on Industry, Trade and Environment visited the beer maker’s Ilala plant in Dar es Salaam yesterday. PHOTO|SALIM SHAO
What you need to know:
The general manager of Tanzania Distilleries Limited (TDL), Mr Davis Deogratius, told members of the Parliamentary Standing Committee on Industry, Trade and Environment who visited TBL Group’s Ilala Pant in Dar es Salaam yesterday that the ETS will increase cost of production, which will then be passed on to final consumers.
Dar es Salaam. Less than three weeks before the country unveils electronic tax stamps (ETS), TBL Group has urged the government to reconsider the decision, saying it will have a negative impact on the beer industry.
The general manager of Tanzania Distilleries Limited (TDL), Mr Davis Deogratius, told members of the Parliamentary Standing Committee on Industry, Trade and Environment who visited TBL Group’s Ilala Pant in Dar es Salaam yesterday that the ETS will increase cost of production, which will then be passed on to final consumers.
TDL, along with Darbrew and TBL are subsidiaries of TBL Group.
Presenting Tanzania’s Sh32.5 trillion 2018/19 budget in Parliament on June 14, 2017, Finance and Planning Minister, Dr Phillip Mpango, said implementation of the ETS will start on September 1, 2018 and that a Swiss firm, SICPA, has won the tender to undertake the project.
The ETS offers a number of benefits, including enabling the government to use a modern technology to obtain production data on a timely basis, real time, from the manufacturers.
The move is also intended to curb revenue leakages and make it possible to determine in advance the amount of taxes to be paid in the form of Excise Duty, Value Added Tax (VAT) and Income Taxes.
But Mr Davis said yesterday that if the government goes ahead to roll out the ETS, TBL Group’s multi-million-dollar plant investment set to be built in Dodoma may not materialise.
This, he said, would be because the ETS will make the cost of production to increase and turn the entire project commercially unviable.
Upon its establishment, the anticipated Dodoma plant will become the largest beer plant in Tanzania, with the capacity of producing three times more than TBL Group’s Dar es Salaam Plant and employing over 700 people.
“We are worried about the stated intention to expand tax stamps to beer. We expect to produce 1.2 billion bottles of beer during the 2018/19 financial year. If we are to pay Sh32 per bottle as ETS costs, we will be required to pay a total of Sh27.6 billion on ETS alone per year. This translates into a 13 per cent increase in excise duties, which will then be passed on to the final consumer through price adjustments,” he said.
This, he said, will reverse the firm’s efforts to lower prices, which accelerated volume growth in 2017.
