Electronic tax stamps win MPs’ accolade

Dodoma. The Parliamentary Budget Committee said yesterday that it was happy with the government’s resolve to raise public revenues through the use of Electronic Tax Stamps (ETS).

The approvals come at a time when data from the Tanzania Revenue Authority (TRA) show that excise duty has been on the rise during the past few months, largely on products upon which the ETS system has been rolled out.

A Swiss firm, Société Industrielle et Commerciale de Produits Alimentaires (SICPA), won the tender and subsequently signed a contract with TRA for the supply and installation of the gadgets, as well as for the provision of supporting software and hardware for ETS management system.

The first phase of the ETS rollout programme was conducted on January 15 this year, when the devices were installed in 19 companies that produce alcoholic drinks, namely wines and spirits.

The second phase - which would see the devices being installed in plants which produce carbonated drinks and bottled water - was slated for a rollout this month (June, 2019).

TRA data show that, soon after installation of the devices, excise duty on the goods produced under the ETSs rose from Sh24 billion in January to Sh28 billion in April this year.

Debating the Sh33.1 trillion budget for the 2019/20 financial year in Parliament yesterday, the chairman of the Parliamentary Budget Committee, Mr George Simbachawene (Kibakwe-CCM), said the committee was generally pleased with the increase in tax revenue collections through the use of ETS during the 2018/19 financial year.

“The committee is happy with the revenue increase through the use of ETS, and the government is currently working on the existing system’s challenges,” he said.

Finance Minister Philip Mpango announced introduction of the ETS when he presented the FY-2018/19 budget proposals in Parliament for debate in June last year. He said the ETS system would enable the Government to use modern technology to capture production data on a timely basis (real time) at the manufacturers’ premises.

The move, he said, was also intended to curb revenue leakages, and make it possible to determine in advance the amount of taxes to be paid namely Excise Duty, Value Added Tax (VAT) and Income Taxes.

However, the ETS programme was greeted with a ‘thumbs down’ response by the Parliamentary Budget Committee last year, with its then chairperson, Ms Hawa Ghasia, and a number of other MPs alleging that the system would raise production costs for producers of water, cigarettes, soft drinks, spirits and beer - among other goods.

In general, the Parliamentary Budget Committee said it was happy with the government for making amendments to 17 legislations during the 2018/19 financial year which have resulted in an increase in revenue collections.

The amendments, said Mr Simbachawene, have also widened the tax base, as well as helped with more effective administration of taxes, thereby stimulating the establishment of more industries.