Other products targeted for electronic stamps include fruit and vegetable juices, bottled water and music products. Their manufacturers will be expected to register their products and apply for the estimated number of stamps needed in the year. The electronic stamp tax will not only track goods in the country but also help in raising revenue for the lower middle income country.
Ministry of Finance and Planning has directed the Tanzania Revenue Authority (TRA) meet a Swiss firm contracted to supply, install and support the running of Electronic Tax Stamp (ETS) software and resolve issues delaying the project.
The taxman and Societe Industrielle et Commerciale de Produits Alimentaires (SICPA) inked the deal in 2018 but its implementation was delayed due to cost issues.
Deputy Finance and Planning Minister Hamad Masauni said in the National Assembly yesterday that he had on Monday this week met the two parts and directed them to go through the terms of the contract so that it is reviewed with an intention of bringing a relief in reducing operational costs and hence increase the amount of revenue generated as a result of applying the ETS system.
He was replying to the issue that rose in the House on Monday when Parliamentarians proposed suspension of the contract or place it under the Tanzania Bureau of Standards (TBS) and if the bureau does not have required technology to handle the vice effectively, the private sector can be invited to bid for the tender of the job and attract competitiveness that will led to cheaper operational costs
“I have directed TRA to start preparing itself by coming up with well-organized technologies that will enable it to manage such systems if need in the future. I urge TRA to consider technological developments as a key component in its operations especially at these days where everything is going digital,” said Eng Masauni.
According to him, a careful feasibility study was not well conducted during the process as a result the construct has led to TRA generating a meager amount of revenue.
In her contributions to the just endorsed budget, Special Seats lawmakers, Halima Mdee alarmed the issue that the government was not receiving reasonable revenue from the contracted firm, calling for a fresh tendering process to have the new contractor or alternatively, choosing any public firm to perform similar exercise.
“Until now, records from the taxman show that about 245 manufacturers have already been given ETS machines but there is no success so far if you look at the figures before and after sealing of the contract,” she said.
Mdee said that before the contract in 2018, TRA was collecting 237bn/- per year but today, only 246bn/- was being collected electronically with the difference of a mere 8bn/- which was still meagre.
ETS replaced the hitherto paper based tax stamps initially attached to cigarettes, wines and spirits. The signing of the contract saw the company extending the service to all products subjected to excise duty including beers, sodas and other soft drinks in order to check counterfeiting and promote tax compliance.
However, there have been resisting arguments from some circles of the public including manufacturers. During the 2021/2022 budget debate yesterday, MPs were opposed to the contract between SICPA and TRA.
Keneth Nolo, Bahi MP CCM advised the government on Monday to find an alternative way of handling the issue but doubted the notion that the government was losing much from the contract it entered.
On the same vein, Kisesa MP, Luhaga Mpina asked the minister to tell the House how much the SICPA was earning per year as he insisted that the contract was even killing business for suppliers of the said products.
“We should be told when this contract will reach its end because the company is not even providing a dividend to the government,” he said.