On February 27, 2025, the Confederation of Tanzanian Industries (CTI) organized a Breakfast Meeting with the Commissioner General of the Tanzania Revenue Authority (TRA), Mr. Yusuph Mwenda, and his team of Commissioners. The meeting aimed to address key issues affecting the manufacturing sector in relation to TRA’s policies and procedures.
Remarks from CTI Leadership
In his opening remarks, Mr. Paul Makanza, the Immediate Past Chairman of CTI, congratulated the TRA management for the progress made in their operations. He particularly praised the TRA for the improvement in its performance, noting that the authority's statistics have shown positive growth, thanks in part to its new customer-centric approach. Mr. Makanza emphasized the importance of collaboration between the TRA and the manufacturing sector to ensure sustainable growth and development.
Key Issues Raised by CTI Members
Several important issues were raised during the meeting:
1. Paper Electronic Tax Stamps (ETS): There were ongoing technical challenges with the paper-based ETS system. Members proposed transitioning from paper to electronic stamps to reduce production costs for domestic industries and combat illicit trade.
2. Excise Duty on Tobacco and Alcoholic Products: CTI members expressed concern over the 20% increase in excise duty on tobacco and alcoholic beverages. One member reported a 13 billion Tshs drop in revenue due to the hike in excise duty, impacting both businesses and government revenue.
3. Further Reduction in ETS Costs: With the current contract with SICPA expected to end in 2027, CTI members requested a further reduction in ETS costs before the expiration of the contract.
4. Tax Disputes and Objections: A proposal was made to allow the use of bank guarantees, rather than requiring cash deposits, for businesses to submit objections during tax disputes. This change would ease the financial burden on companies involved in tax disputes.
5. Counterfeit Products: Members called for harsher penalties for those involved in the production or importation of counterfeit goods. They stressed the need for strong enforcement measures to protect legitimate industries.
6. Salt Importation from Kenya: It was noted that Kenya imports raw salt, refines it, and then exports it to Tanzania as processed salt to benefit from preferential treatment. This practice was flagged as unfair competition.
7. Importation of Machinery: Concerns were raised about the importation of machinery in Completely Knocked Down (CKD) form, where some parts attract duty while others do not, creating inconsistencies in the importation process.
8. Authorized Economic Operator (AEO) Requirements: The requirements for qualifying as an Authorized Economic Operator (AEO) were discussed, with members calling for a review of the criteria.
9. High Tax Assessments: Members raised concerns about high tax assessments and the impact on their businesses’ financial health.
10. Physical Verification of Goods: The practice of conducting 100% physical verification of goods was questioned due to the time and costs involved. Members suggested that a more efficient approach be adopted.
TRA's Commitment to Supporting the Manufacturing Sector
In response to the concerns raised, Commissioner General Mr. Yusuph Mwenda acknowledged that the manufacturing sector is a key driver of the Tanzanian economy, contributing significantly to employment and national revenue.
Mr. Mwenda reassured CTI members that TRA remains committed to supporting the growth of the manufacturing sector. He also highlighted that periodic meetings would be held every six months to ensure continuous dialogue between the TRA and CTI, fostering collaboration and addressing issues as they arise.
In conclusion, the meeting provided a valuable platform for both the CTI and TRA to engage in constructive dialogue and find solutions to pressing challenges faced by the manufacturing sector. As the two organizations continue to work together, it is hoped that these discussions will lead to policies that enhance the efficiency and competitiveness of Tanzanian industries.
CTI Hosts Breakfast Meeting with TRA Commissioner General to Discuss Key Manufacturing Sector Issues