MPs bewail electronic stamp tax, EPZ scrap

15May 2019
Polycarp Machira
The Guardian
MPs bewail electronic stamp tax, EPZ scrap

MEMBERS of the Parliamentary Committee on Industry, Trade and Environment yesterday dismissed the recently introduced Electronic Tax System (ETS) as unjustified and has increased costs of doing business unnecessarily.

While admitting the goodwill of the government in the move, the committee argues that it has come to realize that the technology used by the consulted company is not new or one that locals cannot afford.

Tabling the committee observations and recommendations on the budget estimates of the Ministry of Industry, Trade and Investment for 2019/2020, committee chairperson Suleiman Sadiq said that ETS is a factor that is likely to derail industrial growth if not well handled.

“After scrutiny, the committee has realized that the technology used in the ETS is not so new and can easily be accessed in the country without necessarily using the imported one as it is now,” he said.

The committee made recommended to the government as to holding talks with SIPCA, the firm supplying the digital tax stamp management system supplied to government authorities for nation-wide control of production, import, export, and distribution of excise products such as tobacco, spirits, wine, beer, as well as other consumer goods, including soft drinks.

The committee stated that if no solutions are reached on the already realized challenges it is proper for the government to use local experts, and specifically TTCL to put up a cheaper system linking the government and industry players.

He told MPs that the committee received complaints from industry owners on the big costs of production following compulsory adoption of the new system.

He cited an example where a 200 millilitres mango juice produced by Bakhresa is charged three shillings by the Tanzania Revenue Authority (TRA) but will have to pay nine shillings in ETS.

“Simply put this means we spend nine shillings to collect three shillings and in turn will increase the running cost and price to the final consumer,” he pointed out.

The parliamentary committee calls on the government to hold talks with the relevant partners before the full adoption of the system.

Meanwhile, the committee also called on the government to rethink its abandonment of the Bagamoyo Special Economic Zone (EPZ), saying a lot of money has gone into setting up the facility. It was also destined to open up economic opportunities in the region, he emphasized.

“The committee appeals to the government to reconsider the decision to stop implementation of the project now that other preliminary needs including land compensation to people to pave way for the project has been undertaken,” the committee urged.

On the Liganga and Mchuchuma coal projects, the committee appealed to the government to set aside 25 percent of the raw material from Liganga for sale to industries that produce metal products.

The measure will help local industries to access raw materials easily as well as enable the government to get money to be used at early stages including land compensations.

On Mchuchuma, the committee sought that the government drop its plan for electricity production and instead sell the coal to industries that use the raw product for power generation.