The excise duty was introduced on film and music products with effect from July 2012. The law requires all products whether imported, exported or locally produced and distributed for commercial purposes to be affixed with tax stamps administered under Excise (Management and Tariff) Act, Cap 147.
The devices required to be affixed with tax stamps are audio visual devices used to carry and/or store sound, pictures or other types of music and cinema including video tape, audio tape, DVD, VCD and CD.
The stamps are issued by the Tanzania Revenue Authority (TRA) for the purposes of controlling music and film products rights infringement.
Types of applicable tax stamps:
There are four types of tax stamps identified by colour
a) Green colour for imported films
b) Violet colour for locally produced films
c) Blue colour for imported music
d) Pink colour for locally produced music
Conditions to be fulfilled to acquire tax stamps:
Any person who wishes to order tax stamps must fulfill the following conditions:
a) Shall be registered and be issued approval by Licensing Authority (The person shall be registered and issued Taxpayer Identification Number TIN)
b) Apply for stamps by using forms issued by TRA, form A for imported products and form B for local products.
c) Attach documentation which indicates that the products either belongs to the applicant or is permitted by the owner to produce and/or distribute such products. The attachments includes contract between owner and the applicant which allows the applicant to collect tax stamps for production and/or distribution of film or music products.
d) Any other documents which the Commissioner may require the applicant to produce to support the application.
Applicable tax rate:
The rate for tax is TSHS 17 Per set, the amount shall be remitted upon submission of monthly return. Each set carries two stamps, one to be affixed on the container in a way that when it is opened the stamp will be torn or rendered unusable and the other stamp will be affixed on the device.
Licensing authorities which register and issues approval of production, distribution, import and export of film and music products:
a) National Arts Council (BASATA) - the council deals with registration and approval of all music products to persons who deal with music. The council also monitors and censors music content. All music products shall initially pass to BASATA and be issued with clearance for further processes.
b) Tanzania Film Censorship Board (TFCB) - the board deals with registration and approval of all film products to persons who deal with film. The board also monitors and censors music content. All film products shall initially pass to TFCB and be issued with clearance for further processes.
c) Copyright Society of Tanzania (COSOTA) – the society is responsible for copyrights protection. Therefore a product shall be approved by COSOTA before acquisition of tax stamps. All music and film products cleared by BASATA and TFCB respectively shall then be passed to COSOTA for copyright clearance before collecting tax stamps from TRA.
Accounting for tax stamps
The applicant shall be required to account for usage of tax stamps on monthly basis. He shall submit a monthly reconciliation summarizing the usage of stamps issued during the month and those carried from previous months. The reconciliation statement shall be under the following headings:
- Stamps in stock at the close of the previous month brought forward for use in the current month.
- Stamps applied on products during the month
- Stamps spoiled or damaged during usage as certified by the Authorized Officer
- Stamps unaccounted for in the reconciliation statement and therefore deemed lost
- Stamps in stock at the end of the month carried forward for use in the following month
Computation and payment of excise duty
Excise duty shall be calculated based on stamps applied (used/affixed) to music and film products during the month and stamps unaccounted for in the monthly reconciliation hence deemed lost.
Payment of excise duty shall be on monthly basis and shall be submitted during submission of a monthly reconciliation.