Taxation in Tanzania: holiday season perspective

It is that time of the year when the spirit of Christmas is in the air and some of us are slowly slipping into Christmas and New Year holidays mood. Many organisations are having their year-end parties not to mention weddings and other festivities. It is the time to eat, drink and be merry.

For the Wachagga, who live and work outside of Kilimanjaro, it is the time when they make the annual pilgrimage from all over Tanzania and the world at large to Kilimanjaro for the holidays – locally referred to as kwenda kuhesabiwa (to be counted).

And they go with their families, friends, new cars, new paraphernalia to name but a few. Driving in Moshi at this time of the year, one will experience traffic jams and possibly see someone driving a Ferrari to his village home up in the mountains. There is conspicuous consumption of everything especially alcohol and nyama choma and there are many reasons for celebration i.e. kubariki ndoa, kubariki nyumba, kubariki mtoto, kubariki gari and sometimes even kubariki mbuzi.

Although practiced keenly by the Wachagga, many Tanzanians of different tribes also travel to their traditional homes for Christmas and New Year celebrations.

The government also benefits from Christmas activities through taxes from the holiday festivities. So will Santa Claus be kind to the government this holiday season? Will he bring a good Christmas present to the government? I will focus my article on taxes from beer and spirits.

It was reported recently that both Tanzania Breweries and Serengeti Breweries are facing challenging market conditions from declining beer, spirits and wine sales. Data gathered from the TRA website show that during the first quarter (July, August, September) of the government’s financial year (2016/17), excise tax collected from beer has remained the same. However, excise collections from spirits and Konyagi have declined by 11 per cent and from wines and liquor by 31 per cent. This is despite the increase in excise tax.

This is in comparison to the same period last year (see table). The numbers speak for themselves – that there is a decrease in alcohol consumption due to increase in taxation. To make matters worse, the increase in taxation came at a time when people are illiquid. The common saying these days is that “mambo ni magumu”, meaning in this era times are tough. At the bars those who use to order rounds of drinks and say mupe, mupe, mupe now say muruke, muruke and when they occasionally say mupe, it is succeeded by muruke, muruke. “Mupe” is bar talk for mpe (give) and “muruke” for mruke (skip).

It remains to be seen on how well this Christmas and New Year holidays will be celebrated and to what extent Santa Claus will be good to the government.

Whatever the case, I hope Santa will be good to all of us and that we will have a joyful time with a lot of mupe, mupe, mupe. After all, it is the season to be merry and a season to give. I wish everyone a Merry Christmas and Happy New Year.

Godfrey Mramba is Managing Partner at Basil & Alred. The views expressed do not necessarily represent those of Basil & Alred. Email: gmramba@basilalred.com