Africa-Press – Tanzania. THE Parliamentary Budget Committee has commended progress registered through the electronic tax management system (ETMS) introduced on various goods and called for an extension of the exercise for more products.
The Chairperson of the Parliamentary Committee, Mr Sillo Baran (Babati Rural-CCM), said that the electronic tax system has registered commendable achievements since its introduction.
“The committee has further recommended the system to be integrated with other electronic tax collection systems to improve efficiency in the collection of revenues,” the chairperson said during the telephone interview over the weekend.
He added, “The digital tax stamps are now affixed to alcoholic and soft drinks in addition to fruit and vegetable juices as well as bottled water but my committee has proposed extension of the system to additional products.”
According to the MP, the minister for finance and planning has already formed a team to review the system with a view of adding more products and the cost of using the system.
The introduction of Electronic Tax Stamps (ETS) is part enforcement of Section 5 (1) of the Tanzania Revenue Act Chapter 399 R.E of 2019 which requires all excisable goods to be affixed with digital stamps.
Enforcement of the legislation is implemented through the Regulations for Electronic Tax Stamps Management System of 2018.
The first phase of the system was introduced in January 2019 through a Swiss company (SICPA) which provides software and hardware for the technology.
The first phase of the system covered tobacco products, wines, spirits and beers while the second phase came into force in August 2019 and covered additional products namely bottled water, fruit and vegetable juices.
The new digital system replaces the hitherto physical paper tax stamps which were prone to cheating of taxes through under declaration by some dishonest manufacturers and importers.
Application of ETS for the excisable goods enables TRA to track on real-time actual production at factories and imports and eventually facilitates the collection of requisite taxes and curb fake products in the local market.
The digital stamps as well enable the government to detect smuggled goods and as such protect local manufacturers against unfair competition and shield the citizens from consuming substandard products.
Figures availed by TRA have shown that since the system was introduced in 2019 there has been a significant increase in revenues in terms of excise duty and Value Added Tax (VAT) compared to the same period in the previous years.
Presenting views of the parliamentary committee for the financial year 2021/2022 in the parliament in June this year, Mr Baran proposed the adoption of the digital tax stamps on cement, sugar in addition to cosmetics, farm inputs and veterinary medicines.
The committee reasoned that the system is crucial for curbing tax evasion and smuggling of harmful products which not only harm citizens but create an unfavourable playing ground for local producers.
