TBL, the largest brewer in the country with 75 percent market share, has proposed to the government to consider omission of five percent in excise duty on alcoholic beverages.
For TBL to continue to grow, it needs to explore further markets like alcohol free beer that will compete where there are no alcoholic beverages, Managing Director Roberto Jarrin (pictured) has said.
Jarrin also proposed that a low alcoholic product like Eagle Twist should be taxed in between a soft drink and a beer since the alcohol level of the drink is in between the soft drink and beer.
“Like other East African countries, we are proposing revision of the excise schemes and encourage local sources. And the products that are made with local malt should be considered an omission of 10 percent in excise duty,” he stressed.
He explained that the move will restore competitiveness in the local beer industry, encourage investment and curb smuggling and the consumption of illicit and homemade brew.
According to him, due to non increase of excise duty and prices in July, 2015, the company grew by six percent. In between 2012 and 2015 the average growth of alcohol industry in Tanzania was 0.4 per cent while the excise duty increase was 13 percent and inflation was on average of 10 percent.
He recommended that reduction in excise duty will also increase productivity in the clear beer sector and stimulate forward and backward linkages.
Jarrin noted that this will increase TBL confidence to invest further in its business for the long-term, thus creating more employment and stimulating purchases of agricultural produce from local farmers.
He was of the opinion that the revised rate in the FY2016/17 would increase revenue collection for the government in the medium and long term, as well as create additional employment.
He maintained that the way forward for TBL Group to grow, with its three operating companies of TBL, TDL and Darbrew Limited, is source from the informal sector.
To do this they need to make sure that over a period of time, prices go down so that consumers have more disposable income, and products overtime become more affordable.
The company invests in capital projects worth of an average of $100bn per year to maintain business up to date.
“This has been going on for the past year, consistently investing in its operations to make sure that we have world class operations that rank among the best everywhere,” he said.
In 2015, the total tax contribution to the government was 384bn/-, which is the combination of excise revenue, VAT collections and income tax.
He stated that in effect they have in the Tanzanian economy in terms of whole supply chain in the daily basis an estimated 1.5trn/- annually. The company does this through retail suppliers, employment, advertisers and transporters.
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