In a recent development, manufacturers in Tanzania have expressed appreciation for the government's decision to lower the charges of Electronic Tax Stamps (ETS). However, they are pushing for additional reductions, highlighting the need for ongoing dialogue and adjustments.
The announcement from the Tanzania Revenue Authority (TRA), signed by Commissioner General Alphayo Kidata, revealed a reduction in ETS charges in accordance with Regulation 6(2) of the ETS Regulation, 2018. This decision follows successful negotiations involving TRA, the Confederation of Tanzania Industries (CTI), and the ETS vendor, Swiss firm Societe Industrielle et Commerciale de Produits Alimentaires (Sicpa).
Under the revised rates effective from January 24, 2024, manufacturers will benefit from reduced costs ranging from 14.5 to 30 percent, depending on the sector. Notably, cigarette manufacturers will experience a 30 percent reduction, while soft drink and beer producers will see decreases of 14.5 and 19 percent, respectively.
Leading figures in the manufacturing sector, including Jose Moran of TBL and South East President of AB-InBev, Jayesh Shah of Nyanza Bottlers, Takashi Araki of TCC Plc, Unguu Sulay of Coca-Cola Kwanza, and John Wanyancha of Serengeti Breweries Limited (SBL), voiced their opinions on the matter.
While acknowledging the government's initiative, manufacturers emphasized the necessity for further reductions in ETS charges. They cited disparities in the percentage decrease across different sectors and advocated for a uniform 75 percent reduction. Sulay, representing Coca-Cola Kwanza, highlighted concerns about the impact of varying rates on profit margins, particularly favoring high-margin sectors.
Moran and Shah echoed similar sentiments, stressing the importance of equitable reductions and expressing optimism for further discussions. Araki commended President Samia Suluhu Hassan's administration for its efforts to enhance Tanzania's business environment and pledged continued engagement to improve cost and technical efficiencies.
Wanyancha, while appreciative of the government's response to manufacturers' grievances, deemed the reduction insufficient, reiterating the call for a 75 percent cut. He emphasized the ongoing nature of discussions and expressed hope for a consensus.
President Hassan had previously addressed manufacturers' concerns at the President's Manufacturer of the Year Awards (PMAYA) in December 2023, pledging to alleviate bottlenecks such as ETS costs, power cuts, and US dollar shortages. CTI Chairman Paul Makanza had highlighted the burden of ETS costs on manufacturers' competitiveness during the event, marking the government's commitment to addressing longstanding issues since the introduction of ETS in 2019.
As discussions continue between stakeholders, manufacturers remain optimistic about further reductions in ETS charges, aiming to enhance operational efficiencies and competitiveness in Tanzania's manufacturing landscape.