Manufacturers decry high ETS costs as 2022/23 budget preparation starts

Dar es Salaam.  At a time when the taskforce on tax reforms is welcoming stakeholders’ views to be accommodated in the 2022/23 budget, manufacturers say high costs of Electronic Tax Stamps (ETS) remain their major concern.

The Ministry of Finance and Planning announced last week that the taskforce on tax reforms would officially embark on the 2022/23 budget preparation process next month (February).

The statement said the taskforce would organise a stakeholders’ meeting where the government would make presentations on its targets on policies, agenda, challenges and priorities for the 2022/23 budget.

Stakeholders would thus air their views on how the government could come up with a budget that delivers on the country’s economic growth aspirations.

But manufacturers say the high costs of ETS remains their major concern.

“High costs of ETS’ remain to be our major concern and we believe the government will finally intervene. It can either do away with the system or simply reduce the costs,” said a policy specialist at the Confederation of Tanzania Industries (CTI), Mr Frank Dafa.

Manufacturers are of the view that though ETS’ have helped in reducing the influx of counterfeits into the market, the cost of the stamps was so expensive that it was rendering their products uncompetitive.   

Dafa’s view concurs with that of individual manufacturers and Members of Parliament who have been calling upon the government to review the costs for the general good of making products manufactured in Tanzania competitive.

Tanzania Breweries Ltd (TBL) managing director, Jose Moran, said in Dar es Salaam in November last year (2021) that much as ETS has partly helped in reducing the volume of alcohol that’s sourced from illicit and informal markets in the country, the costs of the stamps left a lot to be desired.

“It could be ten times more expensive here than they are in other countries….The ETS has helped to bring the informal into formal but the price for the stamps is expensive,” Mr Moran told some editors in November, 2021.

The CTI executive director, Mr Leodger Tenga, said recently that ETS costs were a big burden to manufacturers, asking the government to bring it down.

“For soft drinks, the cost of ETS is almost half of what the manufacturer pays in exercise duty for the same product….,” said Mr Tenga.

The ETS - which the government adopted in January 2019 - contains a tracking and tracing system that enables both the taxman and the consumer to easily and effectively tell whether the stamp fixed on a product is original or fake. Apart from enabling the government to use modern technology to obtain production data timely from manufacturers, the ETS also discourages the entry of counterfeits into the market. That way, the system helps the government to raise revenue collection.