Tanzanian government assures wine makers of support

Dodoma. The government has stated that it has received and will address the complaints of wine producers regarding the increased tax on ethanol.

The Minister of State in the President’s Office (Planning and Investment), Prof Kitila Mkumbo, made this announcement here at the weekend during a visit to the Alko Vintages wine factory to assess the challenges faced by local investors.

He said the government, through his ministry, is responsible for addressing the challenges faced by local industrialists.

By helping them, the government enables these industrialists to contribute to the national income, create jobs for young people, and provide markets for farmers' produce.

"We have received this complaint regarding the tax increase on ethanol, which ultimately affects the buyers rather than the wine producers. I must say we have acknowledged it," said Minister Kitila.

Kitila also mentioned that the company has experts from South Africa, the largest wine producer in Africa.

His goal is for Tanzanian wine to compete with South African wine.

He said six African countries are leading in wine production, and Tanzania is one of them.

The other countries are South Africa, Algeria, Morocco, Tunisia, and Egypt. While Tanzania generally doesn’t have the ideal climate for viticulture, the northern region provides perfect conditions for growing high-quality grapes.

The challenge was discussed in front of the Minister and the CEO of Alko Vintages, Archard Kato, who noted that the tax increase has affected them by raising operating costs while the price of wine remains the same.

Kato also mentioned another challenge: the need to import wine bottles from abroad, as not all are produced domestically.

"Wine differs from other drinks in that its bottles come in various sizes, and not all sizes are produced domestically."

He also mentioned that they sell their wine in South Sudan, Uganda, Rwanda, and China.

Recently, Minister for Finance Dr Mwigulu Nchemba announced in his Budget Speech to the National Assembly that the government was introducing an excise duty of Sh7,000 per litre on imported undenatured ethyl alcohol and Sh5,000 per liter on locally produced undenatured ethyl alcohol with an alcoholic strength of 80 percent or higher (ethanol) under HS Code 2207.10.00.

“Exceptions apply for ethyl alcohol used for non-manufacturing purposes as recommended by the responsible minister. The differential rate aims to protect domestic industries and is expected to increase government revenue by 154,550 million shillings,” he said.