Editors pledge cooperation with CTI to industrialise Tanzania
The Confederation of Tanzania Industries (CTI) recently met with the editors from various media institutions to discuss, among other things, how both sides could cooperate to make the Fifth - Phase Government’s motto—“Tanzania ya Viwanda”—a reality.
During the consultative meeting, the editors expressed their views and finally pledged to use their pens and profession to forge forward to realise the government’s plan of making Tanzania an industrial country.
Photo: Editors from different media listening to the CTI Chairman (not in picture).
Earlier, the Chairman of CTI Dr. Samuel Nyantahe elaborated on issues that the government and CTI were working on to make business environment more favourable. These include:
a. Stable fiscal regime and widening of tax base
Over the years, the fiscal regime has been subject to change, especially during the Annual National Budget presentations, making it difficult for businesses to plan for future undertakings.
CTI recommends the following to the government:
- Institute a stable and predictable fiscal regime.
- Simplify procedures to start up a business to enable many more informal businesses to formalize.
- Expand the tax base and ease pressure on the small formal sector.
b. Reduction of illicit trade in the domestic market
Smuggling of goods through the porous and long borders of Tanzania makes prices of smuggled goods unrealistically low, as they do not pay due taxes, thus makes locally produced goods unable to compete.
CTI recommends that the Government should take measures to enforce the customs regulations and border management and patrol.
c. Cash flow hitches due to outstanding TRA refund claims
CTI members have reported outstanding claims of VAT refunds of more than TZS 30 billion. The delay in refunds has the effect of increasing the cost of production, thereby negatively affecting the performance of industries and the economy at large.
CTI requests the Government to hasten the refund process as per the regulations.
d. The additional 15% import duty on industrial sugar
Industrial sugar is needed as a key raw material for the beverage, food and pharmaceuticals industries in the country.
Recently, CTI records indicate that the five major producers of soft drinks industries have outstanding dues of more than TZS 35 billion of refundable cash from TRA. In addition, they have incurred more than TZS 3.5 billion in bank interest for moneys borrowed from commercial banks as a result of the delayed refunds.
- The additional 15% upfront payment be abolished and that outstanding refunds be paid as soon as possible.
- Furthermore, stern actions should be meted to those who are found to abuse the facility by selling industrial sugar in the local market.
e. Existence of multiple regulatory authorities
In spite of the benefits of regulations, the current regulatory authorities are excessive in number and the charges/fees levied increase the costs of doing business in the country.
The 2013 CTI Study on Multiple Regulatory Authorities revealed food processing is regulated by more than fifteen authorities involving multiple fees, duplication of regulatory functions, delays, and unnecessary bureaucracy.
The Government to implement the recommendations contained in the Blue Print for Business Environment Regulatory Licensing Reform, which was developed by the government in consultation with the private sector aiming to improve the regulatory and licensing framework in the country.
f. Delays to acquire import license permits for industrial sugar
CTI commends the Government for the on-going exercise of verifying the use of imported industrial sugar with a view to ascertaining that the sugar is indeed utilized for production purposes as intended. The objective is to make sure that importers do not abuse the facility by selling the sugar in the local market for domestic use.
CTI recommends to the authorities that:
- The verification exercise be expedited and a notification to that effect be issued upon completion of the exercise.
- A new allocation be determined and communicated to the importer as soon as possible upon completion of verification.
- A criterion used to determine the new allocation be indicated in the communication to the importer for transparency.
- Where the consignments have been delayed due to the exercise, the storage and demurrage charges should be waived.
g. Introducing electronic tax stamps on selected products
Alcohol, soda, cigarettes and water companies have been notified by TRA of the government’s intention to introduce electronic tax stamps (ETS) on the products effective this fiscal year (2018/2019). Currently Tanzania does not have tax stamps on these products.
CTI members have three serious concern regarding the implementation of electronic tax stamps on the selected products:- High cost involved; benefits and/or effectiveness of the system and the credibility of the Proposed Vendor for ETS Implementation in Tanzania.
The Introduction of Electronic Tax Stamps (ETS) on these products be suspended until the regulations and the adverse effects of their introduction are debated with the impacted industries.