THE government has slightly increased excise duties on soft drinks, beers and other alcoholic drinks and proposed a number of measures to reduce tax exemptions as it seeks to raise revenue for 2014/15 financial year in the wake of declining foreign aid.
These measures are expected to increase government revenue by 124bn/-. Under the 10 per cent adjustment measures on excise duty on non-petroleum products, the excise duty on soft drinks has been increased from 91/- per litre to 100/- per litre.
The excise duty on locally produced fruit juices has been increased from 9/- per litre to 10/- per litre while the duty on imported fruit juices has been increased from 110/- per litre to 121/- per litre.
The excise duty on beers from local un-malted cereals increased 341/- per litre to 375/- per litre, being an increase of 34/- per litre. The Excise duty on other beers has been increased from 578/- per litre to 635/- per litre being an increase of 57/- per litre.
Under the 10 per cent adjustment, the excise duty on wine produced with domestic grapes with content exceeding 75 per cent has been increased from 160/- per litre to 176/- per litre.
The excise duty on wine produced with more than 25 per cent imported grapes has been increased from 1,775/- per litre to 1,953/- per litre. Excise duty on spirits has been increased from 2,631/- to 2,864/-.
The excise duty on bottled water has not been touched. Excise duty on cigarettes without filter tip and containing domestic tobacco more than 75 per cent has been increased by more than 75 per cent from 9,031/- to 11,289/- per thousand cigarettes.
Excise duty on cigarettes with filter tip and containing domestic tobacco more than 75 per cent has been increased by more than 75 per cent from 21,351/- to 26,689/- per thousand cigarettes.
Excise duty on other cigarettes increased from 38,628/- to 48,285/- and that on cut rag or cut filler increased from 19,510/- to 24,388/- per kilogramme.
The excise duty on cigars remains at 30 per cent. The minister also said the government has imposed a 15 per cent final withholding final tax on board of directors fee.
She said the corporate tax exemption to companies from income derived from gaming has been removed. Pay as
The minister further said excise duty rate of 0.15 on money transfers has been removed to provide relief to people who transfer money through banks and telecommunication.
She said an excise duty of 10 per cent will be introduced to be paid by banks and telecommunication companies for the fees and levies they collect on money transfer services.
Remove powers of Finance Minister to grant exemption on petroleum products. The minister also proposed amendments to motor vehicle registration and Transfer Tax Act CAP 124 with a view to differentiate registration system of motor cycles from motor vehicles by changing the prefix T to TZ.
The aim is to fight crime practices which are associated with the use of motor vehicles prefix in motor cycles, she said. The Minister also said export levy on raw hides and skins will be reduced from 90 per cent or 900/- per kilogramme to 60 per cent or 600/- per kilogramme to curb illegal exportation of raw hides. The reduction on export levy on raw hides will increase government revenue by 5,778.7m/-.
A number of measures have been proposed on the Tanzania Investment Act which will increase government revenue by 43.7bn/-, she said. Under the measures cement will be removed from the list of deemed capital goods which enjoy tax exemptions under the Tanzania Investment Centre.
All tax exemptions on investments granted to telecommunications operators under the Tanzania Investment Centre (TIC) for deemed capital goods will be removed, she said.
The deemed capital goods where tax exemption has been removed will include telecommunication towers and their accessories, generators, tower fences, vehicles, base station accessories, surge and lightening protection system.
There will also be a new definition of strategic investor by changing the lower threshold capital that an investor is required to invest in order to qualify as a strategic investor.
The lower threshold of capital for foreign investor has been increased from
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