AfricaPress-Tanzania: INCREASED revenue collections recorded through Electronic Tax Stamps (ETS) management system on products subjected to excise duty has prompted the Parliamentary Budget Committee to propose the same technology to be applied on other products such as cement and sugar.
“Arrangements are underway for a meeting between the committee and the government through TRA to propose modalities for applying digital stamps for the above mentioned products and others to boost revenue collections,” the Chairperson of the committee, Mr Mashimba Ndaki, told this paper in an interview.
Mr Ndaki, who is also Maswa West MP through the ruling party CCM pointed that,” Available data indicates that the electronic stamps have been instrumental in increasing taxes to the government and thus should be rolled out to other products to curb loopholes of tax evasion and under declaration of produced goods.”
The MP went further and proposed that it was high time that the government through the Tanzania Revenue Authority (TRA) extended the application of the electronic tax to both widen the tax base and boost revenue collections to the Treasury Coffers.
He was equally impressed that some challenges such as costs associated with installation of the technology and manning of the system had been addressed so far.
“For instance, manufactures were initially required to bear the cost for installation of system at their lines of production but after negotiation with TRA it was decided that the charges will be deducted from income taxes paid by the producers,” he elaborated.
The other challenge was on who will monitor the system at the industrial plants but it was later decided that there would be representative from the respective plant, an official from TRA and an expert from SICPA, a Swiss firm which was contracted by TRA to provide software and hardware for the sophisticated tax monitoring system.
Presenting views of the committee on budget estimates for the fiscal year 2019/2020 in the National Assembly last year, the former Chairperson of the team, Mr George Simbachawene, commended the government for increased revenues collections during the previous financial year, thanks to ETS on excisable goods.
Mr Simbachawene, who was later appointed Minister for Home Affairs, however urged the government through the TRA to address some challenges experienced during execution of the technology.
Mr Simbachawene as well applauded the government for making amendments on 17 legislations during the financial year which led to increased revenue collections, widened the tax base, proper administration of taxes and stimulating establishment of industries.
The government of Tanzania through TRA rolled out the first phase of ETS system on beers, wines, spirits and cigarettes in January, last year.
A Swiss firm, Société Industrielle et Commerciale de Produits Alimentaires (SICPA) won the tender and subsequently signed a contract with TRA for supply, installation and provision of supporting software and hardware for ETS management system.
ETS is meant to replace the hitherto paper-based tax stamps initially attached to cigarettes, wines and spirits. The old system was prone to cheating of taxes through under declaration, among other malpractices.
Available data indicates that since ETS was implemented during the first phase on tobacco and alcoholic drinks starting January, 2019, collection for excise duty on locally produced spirits increased by 22.7 per cent.
TRA indicates in the data that excise duty from the spirits increased from 18.5bn/- between January and March 2018 compared to 22.7bn/- which was recorded between January and March, 2019.
