TRA collects 2.1trn/- from beverages since ETS inception

27Oct 2022
The Guardian Reporter
DAR ES SALAAM
The Guardian
TRA collects 2.1trn/- from beverages since ETS inception

THE Tanzania Revenue Authority (TRA) has collected 2.1trn/- as taxes from beverages since the kick-start of the Electronic Tax Stamps (ETS) in January 2019.

Richard Kayombo, TRA’s commissioner

Richard Kayombo, TRA’s commissioner for tax education said in an interview that the introduction of ETS has not only improved the collection of excise duty, but also other taxes including VAT and Corporate tax.

Kayombo said that the number of companies registered by TRA on the ETS is almost hitting 500 by end of August 2022, up from an initial 50 when the service was first rolled out three years ago.

The type of excisable manufactured goods—cigarettes, beer, soft drinks, bottled water, fruit juices, wines & spirits and fruit wines such as banana and rosella.

According to him, the introduction of ETS has shown tremendous growth in revenue collection with analysis by TRA in comparing the primary tax collected by this system (the Excise Duty) for the three years showing tenfold growth.

“Total collection of revenue in the three years of implementation of the system has seen revenue from wines, beers, bottled water, soft drinks, cigarettes and spirits grow from 1.6trn/- in the preceding three years to 2.1trn/- in the three years’ post-ETS installation,” he said.

The collection represents a 28 percent improvement during that period with beer improving by 15 percent, spirits by 79 percent, and bottled water by 470 percent, whereas the biggest growth was registered in wine where the growth of 1028 percent was recorded during that period.

With recent criticism on how effective the system has been in improving revenues TRA says some critics hardly have proof and it remains mere hearsay.

“During the financial year ending June 2022, the Excise Duty and VAT from the Alcohols produced in the country earned the nation 767.5bn/-.”

According to him, locally manufactured spirits earned the taxman 239.3bn/-, beer was the greatest earner as it fetched 517.9bn/- and wines brought in 10.1bn/-.

“To enforce compliance TRA conducts regular inspections, surveillance and enforcements in the markets to ensure that the available products possess genuine stamps and have come from legitimate manufacturers or importers,” he said.

It is through such campaigns that most unregistered traders are uncovered and punished as per the Electronic Tax Stamps Regulations, 2018.

“Not only has it improved the collection but there is also the element of illicit brews that were making it to the market from some neighbouring countries,” he said.

According to him, the ETS was rolled out by a Swiss firm—Société Industrielle et Commerciale de Produits Alimentaires (SICPA), which came with modern technology that provides security features that simplify the administration of taxpayers and address the longstanding challenges in the administration of tax in excisable goods.

“Besides it helps to protect the welfare and health of consumers by enabling them to verify the genuineness of the product and stamp using various ways including mobile phones,” he said.

Responding to these concerns sometimes raised by manufacturers, Kayombo said the ETS as of now is the most transparent way of proving the volumes and the taxes due in real time.

This, he said, has helped the tax collectors avoid unnecessary disputes.

“The government has taken several initiatives first by charging in Shilling as opposed to US dollars as the case was initially and further negotiated prices downwards.”

According to Kayombo, the process of procurement of a new vendor is ongoing and several companies have tendered their bids.

“The process is transparent involving the Confederation of Tanzania Industries (CTI)—the umbrella body that represents manufacturers, and through this, we expect to obtain even more competitive prices for ETS taking into account the economies of scale,” he said.

 

 

 

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