TRA urges suppliers of cheaper ETS tools to come forth in bids
Dar es Salaam. Makers of machines for the Electronic Tax Stamp (ETS) system have until March 30, this year to seek authorisation by the Tanzania Revenue Authority (TRA) to supply the facilities at more affordable prices compared to those currently being supplied by Swiss company SICPA.
This was stated by Commissioner General Alphayo Kidata yesterday during a meeting with the Tanzania Editor’s Forum (TEF) as he responded to concerns by local manufacturers who have been urging the government to find ways of cutting down the cost of ETS machines.
“It is impractical to implement the proposal presented by the Confederation of Tanzania Industries (CTI) to reduce the ETS costs on manufacturers by 75 percent. The price charged reflects the process it takes to process the stamps. We secured a suitable company to supply the ETS machines and so unless we get a cheaper supplier we cannot reduce the rate paid by manufacturers,” he said.
“What we want with ETS are correct declarations for excise duty, VAT, and corporate tax,” he added.
For his part, ETS Programme manager Innocent Minja said since the rollout of the ETS, the government has reduced the costs on the part of manufacturers by over 40 percent, with the latest deduction being done a few weeks ago.
“ETS charge is a deductible cost on a business. Cumulative reduction on costs to manufacturers stands at more than 40 percent, but people only refer to 4 percent reduction which happened in January. Our aim is to enjoy economies of scale due to reduction of costs of goods,” he said, adding that TRA has been in constant consultation with CTI to get input from them.
“We asked them to go and do practical research and see how this system operates.”
On why TRA chose SICPA as a supplier, TRA explained that they chose a country with the “best system that could work for us.”
“By charging $18 per 1,000 stamps, compared to other East African countries, Tanzania offers the cheapest rates.
Stamp costs in Kenya, Uganda, Rwanda, and DR Congo are higher,” added Minja.
In separate interviews with The Citizen, different local manufacturers exhibited discontent on what they termed as dissatisfying reductions on ETS costs, cautioning that more levies will inevitably lead to an increase in the price of goods.
At one time, CTI executive director Leodegar Tenga was quoted stipulating that the government risked seeing a decline in revenue collection due to attrition of in sales volume by manufacturers.
However, the latest figures on tax collections as revealed by TRA paint a rather optimistic picture.
According to available data, TRA attained 98 percent of their half-year tax revenues collection target with Sh11.302 trillion by December 31, 2021.
The taxman is now eyeing the mouthwatering sum of Sh22.3 trillion this financial year, according to the TRA Taxpayer Education director, Richard Kayombo.
