Tanzania: Don''t Hike Drinks, Tobacco Prices, Firms Urged

Source from:  Tanzania Daily News 06/17/2015

Memembers of Parliament (MPs) here do not expect producers of alcoholic and soft beverages and cigarettes to increase prices of the products following the move by the government to spare them from tax increment in the coming financial year.

For the past years, consumers of the products have been made to dig deeper into their pockets as the government increased taxes on the products, save for the next fiscal year. TBL, TDL, SBL and TCC are among leading taxpayers in the country.

The main producers include Tanzania Breweries Limited (TBL) and its subsidiary, Tanzania Distilleries Limited (TDL), as well as Serengeti Breweries Limited (SBL) and Tanzania Cigarette Company (TCC).

Special Seats MP Susan Lyimo (Chadema), challenged the producers and retailers to spare consumers of price increment since the government had not added taxes on their products as it had been the case in previous years.

"The government should look for other sources of revenue rather than the so-called sin taxes. Manufacturers and traders, on the other hand, should not increase prices of the commodities which have not been affected by tax increment," Ms Lyimo said.

She was, however, concerned that the producers could raise prices and attribute it to the depreciation of the local shilling against the greenback, complicated by transport costs fuelled by the government increase of taxes on fuel.

Ms Lyimo was of the view that the government should look for new sources of revenue in areas such as fishery and spare alcoholic and soft drinks and cigarettes which are luxuries that are hardly beneficial to most people.

She was equally irked that the government has been relying on the six taxes to fund its budget despite alternatives sources of revenue which the country was endowed with.

Appearing before the Parliamentary Committee on Industry, Trade and Economy in April, this year, Finance Minister Saada Mkuya Salum hinted that the government had not met its revenue target from the six taxes since consumers opted for cheaper local drinks.

Korogwe Rural MP Stephen Ngonyani (CCM) hailed the government for shunning the sin taxes in the forthcoming fiscal year and instead concentrated on alternative funding of the national budget.

He proposed stern action on manufacturers and traders who would hike prices on the pretext of increased taxes as had been in the past.

"Drinking alcohol and smoking cigarettes is not a necessity and thus it is impracticable to depend on them as the sole and major sources of revenue," charged the MP, famously known as Prof Maji Marefu.

For his part, Mkinga MP Dunstan Kitandula (CCM) warned that the increased taxes on fuel should not be used as a pretext to hike prices of other products which have not been affected by the new taxes.

His sentiments were echoed by Mtoni MP Faki Haji Makame (CUF), who called for deliberate action on producers and retailers who would raise prices of products unreasonably, as a result adversely affecting the final consumers. Enditem