Illicit liquor trade far from dead, spells danger to our youth

17Oct 2017
The Guardian Reporter
The Guardian
Commentary
Illicit liquor trade far from dead, spells danger to our youth

JUST how much time or effort would one need to prove that there is a direct link between marking the anniversary of Mwalimu JK Nyerere’s passing and ridding Tanzania of anything and everything threatening to ruin the health – and indeed the very future – of our youth and nation?

 

Not much, going by the way things like indulgence in alien cultural practices and addiction to drugs and fake hard drinks have wreaked havoc on massive numbers of youth who would have ordinarily served our nation excellently.

Sadly, this particular aspect of the lives of Tanzanians did not feature as prominently as one would have wished in the otherwise marvellous events and activities that coloured the 18th anniversary of Mwalimu’s death – on October 14.

Considering the pivotal role the youth are often expected to play in facilitating or stimulating a country’s development vis-à-vis the serious consequences of default or failure to deliver, there should be no end to underscoring the need for society to empower the youth to play that role to satisfaction.

This essentially presupposes that enough is done to clear the way for the youth to serve the nation effectively, and what surer way of making that possible than for society to sweep the nation clean of anti-social trends and activities to which young men and women would be easily attracted unless properly guided.

And who would deny that many youth commonly find such activities the in-thing and soon closely and dangerously associate with them at massive cost financially and in terms of ruined physical and mental health as well as dented ability to contribute meaningfully to nation-building?

We all know that youth comes but once in a lifetime, and hence the fundamental importance of ensuring that we build our youth for the future – even if it may not be as easy building the future for them.     

A case in point relates to indulgence in alcohol and drug abuse, most especially where it involves the consumption of adulterated and therefore fake and even toxic hard drinks where the major attraction is the easy availability induced by low price.

An early July 2016 Tanzanian media survey showed that the consumption of adulterated alcoholic drinks was getting increasingly common among the youth – and students were far from spared.

According to the report, this often involves ‘viroba’ (liquor of mostly suspicious quality packed in plastic sachets) commonly found at backyard or roadside selling points such as bars, groceries and bus stands, some dangerously close to school compounds. Even worse, the liquor would be selling at as low as a throwaway 300/-, which would boost accessibility considerably.

As a consequence, or so it was reported, some students reach school – and “attend” class “under the influence” and therefore without the capacity to follow proceedings there. The magnitude of the consequences is obvious.

Unfortunately, we are yet to take stringent enough measures to arrest the suspicious manufacture and random – and thus age-blind – sale and consumption of alcohol, regardless of the quality.

Indeed, the ease with which cheap brands of suspicious liquor is available on the open market spells untold danger to our “future generation” – primarily in the form of primary and secondary school students.

By some estimates, by June 30, 2016, the government was charging excise duty to the tune of 3,157/- per litre and value added tax (VAT) at 18 per cent on hard liquors – and the excise duty was shortly later expected to rise by 5 per cent – coming to 3,315/- per litre. What was largely seen as of much greater importance and relevance was the need to put brakes on tax evasion since it is what makes ‘viroba’ so readily accessible and affordable for children in and out of school.

Also, one wonders whether the government, research agencies, human rights advocates and other stakeholders have seriously studied the impact of the vast differences in the prices of the liquors packed in sachets.

Have the stakeholders ever cared to know why some of the 20-plus companies packaging and selling ‘viroba’ across Tanzania charge as low as anything between 250/- and 350/- per 50ml ‘kiroba’ of liquor? Do these companies really pay such things as excise duty and VAT? Or are they exempted from doing so – and if so why, as some other companies are not that lucky?

If basic costing were to be done, the government, researchers, tax analysts, industry watchers and other agencies should wonder why the cost of producing or packaging ‘viroba’ is often higher than the actual sales value if excise duty and VAT was paid.Therefore, any dealers selling common spirits above 35 per cent alcohol by volume at below 600/- per 50ml sachets and at below 1,100/- per 100ml sachet ought to be put under scrutiny for tax evasion.

Some companies in Tanzania are meanwhile selling hard drinks such as Konyagi at between 600 and 700/- per 50ml sachet. This suggests the existence of a lopsided business environment for distilleries and brewing industries.Otherwise, what is the explanation for Konyagi being up to 60 per cent more expensive than almost all other spirits if not that maybe the company making this particular brand is unfailingly tax-compliant?

It may be argued that massive tax evasion is taking place in the distillery industry and market and that, while the government may be working hard to end the mess, the fact that there are major loopholes and taxation systems may not be that watertight explains the government’s perceived failure to identify and catch big-time tax evaders.

With the government the major shareholder in every alcohol company in Tanzania, hard drinks constitute one of the biggest revenue generators in the country – and this calls for greater vigilance by the state if the nation is to benefit more from this subsector. Of course, this is assuming that there is no cheating by manufacturers, suppliers (using fake excise duty stickers, etc.), selling points, and elsewhere. 

If correct pricing is placed on the drinks, then affordability will be managed and control will be enhanced, thus sparing our youth the danger they would otherwise face from unlimited exposure to alcohol consumption. Doing so, alongside embarking on campaigns meant to educate and sensitise the public on the dangers of alcohol, would go great distances towards taming the “tiger” of substance abuse.

It is aptly said that the first thing in the human personality that dissolves in alcohol is dignity. And who would want to see the dignity of our youth “dissolving” in alcohol – most especially the illicit kind that also translates into loss of government revenue and serious danger to public health?

If one were to view the recent hue and cry over the use of electronic fiscal devices (EFDs) in business as the nerve heart of a 30 billion/- scam, then one would be safe to conclude that the fuss attendant to the messy packaging, sale and consumption of hard drinks – particularly ‘viroba’ – involves a staggering 600 billion/- or more a year. At least by Tanzanian standards, this is no small business.

Accordingly, this should serve as reason enough for the government to move fast towards ending all these open instances of tax evasion in the liquor business and, with that, make it easier for itself to build or improve roads, hospitals, schools and other infrastructure.Surely, we can’t keep depending on outside “aid” when some of our own people and institutions keep evading legitimate taxes with impunity. Strategically set TRA, police, Prevention and Combating of Corruption Bureau and other “checkpoints” will be smart enough to catch up with these cheats on condition that those overseeing those points are unswervingly patriotic and professional. So, let’s go…

The answers and solutions to all these questions and problems or challenges may not be all that simple or easy to come by, but unwavering commitment by government agents and members of the public will move even the most stubborn of boulders.

The fact is that success will remain elusive even in the long term unless we have truly honest, devoted and incorruptible men and women strategically placed across the liquor industry and market supported by a failsafe track-and-trace electronic system to screen excise duty stickers.

A big company holding almost half the market share in the country’s hard liquor business is understood to have paid taxation amounting to 297 billion/- from spirits last year alone, with 70 per cent of the volumes of sales generated through the sales of sachets of certified hard drinks.

One would have to be excused upon wondering how fatter government coffers would have been had all the other 20 to 25 smaller capacity players in the liquor business behind the other half of the market share behaved as responsibly as the tax-compliant giant referred to. But with the business in “sachet liquor” as muddled as obtains, one can only wish and pray that the relevant authorities will intervene as soon as practicable.

This should entail putting in place a level playing field and generally ensuring fair play so that honest and tax-compliant dealers do not end up with a raw deal while errant ones including tax evaders continue to have a field day.

If this is done, the government will rake in staggering amounts of revenue more in taxes from hard drinks than it now realises, while the health of our youth and other people consuming alcohol is not put at unnecessary risk through exposure to impure and other substandard brands of liquor.

We should not allow ourselves to suffer the triple “tragedy” of needlessly sacrificing the health of our people while also denying the government the funds it rightly needs by condoning tax evasion and belittling the contribution of law-abiding players.

Mwalimu Nyerere saw the payment of taxes consonant with laid down legal and other requirements as one of the basic obligations of every citizen. Indeed, he once expressed dismay and anger over what he believed was blatant failure by the government to collect taxes to what would be considered a reasonable extent.

To be fair to ourselves, though, we have cast the tax nets wider. But that alone will not do; rather, we need to ensure that the collections we aim for are indeed realised, come from legitimate quarters, and therefore can be defended.

With that, we shall have done ourselves justice and remembered our Founding Father honourably – and future generations will have much to thank us for.