Liquor producers embrace electronic tax stamps idea

18Jun 2018
Polycarp Machira
The Guardian
Liquor producers embrace electronic tax stamps idea

HARD liquor producers have hailed the government’s introduction of electronic tax stamps to replace the current paper tax stamp system that they say is being abused by counterfeiters to flood the market with illicit drinks.

The producers assert that there is too much illicit liquor with fake excise duty stamps in circulation, thus the introduction of electronic stamps will help control this.

The Minister for Finance and Planning, Dr Philip Mpango, announced the plan to introduce electronic tax stamps when tabling the 2018/19 national budget estimates in parliament here last Thursday. He said the new stamps will start being used on September 1.

“The new tax stamp system will allow the government to use modern technology in obtaining production data on a timely basis (real time) from manufacturers,” Mpango said.

He explained that the new system is also intended to curb revenue leakages and make it possible to determine in advance the amount of excise duty, VAT and income taxes to be paid.

According to the minister, the system will address challenges associated with the use of fake paper stamps, including the proliferation of sub-standard products which may cause health problems and revenue losses.

Nyati Spiritz Limited chief executive officer Rupa Suchak described it as a positive move that should bring in more revenue for the government from genuine liquor producers, while also restricting the continued production of cheap, illicit liquor.

The parliamentary committee on Industry, Trade and Environment recently noted that some liquor producers issue false information on their products, thus denying the government a lot of due revenues.

“We propose that the government imposes a tax on raw materials used to make liquor, in order to address this problem” said committee chairperson Suleiman Sadiq.

Another liquor maker who declined to be named pointed out that the ‘dubious’ liquor producers offer unfair competition to genuine liquor producers.

Earlier this year, the Minister for Industries, Trade and Investment, Charles Mwijage called on members of parliament to help in revealing illicit liquor factories.

“They sell in plastic bottles and much below the required quantity without the rightful stickers,” Mwijage said, describing them as just like any other criminals who should be arrested.

He said the protection of legal industries should be done by everyone and not the government alone.

A random survey by The Guardian found over 20 brands of illicit liquor in the market, being sold at different prices despite being packed in the same quantity.

They are found in regions like Dar es Salaam, Mwanza, Arusha, Kilimanjaro, Shinyanga, and Geita, many with genuine-looking stickers from the Tanzania Revenue Authority (TRA).