Tanzania taxman hails smooth e-tax system roll out

Dar es Salaam. The Tanzania Revenue Authority (TRA) says it has not encountered challenges after rolling out the Electronic Tax Stamps (ETS) system despite earlier worries from some manufacturers.
The manufacturers claim that the ETS - which was being installed by a Swiss firm, Société Industrielle et Commerciale de Produits Alimentaires (SICPA) - would increase their production costs. Indeed,  the Confederation of Tanzania Industries (CTI) counted it among its major tax concerns during the FY-2019/20 budget preparation. However, in what might have effectively countered the argument, the government avoided the temptation to raise excise duty rates to counter the projected annual inflation rate and other macro-economic indicators during the 2019/20 financial year.
Presenting the Sh33.1 trillion budget for the 2019/20 financial year in Parliament last month, the Finance and Planning minister, Dr Philip Mpango, maintained the extant excise duty rates for 2018/19 financial year on beer, spirits, cigarettes, wines and mineral waters, among others, in deliberate efforts by President John Magufuli’s government to boost local production and keep inflation in single digits.
The Tanzania Revenue Authority (TRA) remains optimistic that a complete rollout of the ETS will boost government revenues - and also help it hasten implementation of  development projects.
“The taxman caters for all costs of installing the equipment, so  companies only have to pay for the stamps. Even so, the cost will be going down gradually. In fact, the system will help manufacturers to do away with counterfeits that were being forced into the market through shady routes - which  will boost their sales,” the TRA deputy commissioner general, Mr Msafiri Ndimbo, said.
He was speaking to some journalists earlier last week at the ongoing 43rd Dar es Salaam International Trade Fair (DITF).
He said the first phase of the project was launched on January 15, this year, whereby stamps were installed in 19 companies that produce alcoholic drinks.
The TRA’s director of Taxpayer Services and Education, Mr Richard Kayombo, was quoted as saying that excise duty on the products that had the stamps impessed on them rose from Sh24 billion in January  2019 to Sh28 billion April.
Mr Ndimbo said the second phase – which will see to ETS being rolled out to carbonated and soft drinks manufacturers - was awaiting approval of the TRA commissioner  general, saying it would soon be rolled out.
He urged the companies involved to comply with the system. He said that, following the launch of the first phase, small-scale manufacturers were given enough time in which  to fulfil the requirements.
“So far, we have installed all the necessary facilities - including printers and savers - in all the manufacturing companies…We planned to roll it out in June, but we will do so anytime soon,” he said.
Reports show that the rollout exercise began with the installation of e-tax machines at the Tanzania Cigarette Company and Nyati Spirit in Dar es Salaam.