8 June 2017

Tanzania Brewers Wary of Rise in Excise Duty

Dar es Salaam — An excise duty rise on beer and spirits can lead to an increase in the consumption of illicit brews and subsequent reduction in company earnings and government revenues, brewing industry players warn.

Serengeti Breweries Limited (SBL) corporate relations director John Wanyancha said the excise duty on beer and spirits is normally passed on consumers. When it is high the prices increase.

But consumers failing to afford the drink turn to illicit brews.

"That can impact negatively on brewing companies as volume salesmay decrease, with subsequent fall in government revenues."

He warned that the consumption of illicit brews could endanger health.

He called on the government to maintain the tax concession on local raw materials.

According to him, currently beer companies that source all their raw materials locally are given a 40 per cent tax concession compared with beers that are produced from foreign materials.

He called on the government to maintain that to foster growth of agriculture.

"This encourages more people to grow, barley, wheat, maize and millet because they are assured of a ready market."

Tanzania Breweries Limited (TBL) officials were not available to comment on the matter.

Meanwhile the Confederation of Tanzania Industries (CTI) has supports SBL that an increase in excise duty on beer and spirits could lead to increases in consumer prices, resulting in reduced sales volumes.

According to a CTI report, a 25 percent increase in beer excise duty in 2012/13 resulted in an 8 percent loss in sales volume and revenue for the company and the government respectively.

- It encouraged people to consume "unregulated and unhealthy alcohol", it warned.

CTI proposed that the government maintain excise duty rates on beer and spirits on the current inflation rate.

According to them, maintaining current prices of beer and spirits will

increase government revenue estimated at Sh65 billion a year.

CTI said past experiences showed that a 5 percent volume growth resulted in a 15 percent increase in the total product tax collected.

The report shows that TBL paid more than Sh380 billion in taxes in 2015, preventing consumption of unhealthy and unregulated alcohol.

Employment of over 2 million people can be maintained through the production and supply chain as well as support agriculture via contract farming.


Pay Dividends or Face the Music

... President Magufuli tells 91 public institutions through the Treasury Registrar Read more »

See What Everyone is Watching

Copyright © 2017 The Citizen. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 800 reports a day from more than 140 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.