Zanzibar ponders introduction of EFD and electronic tax stamps to boost revenue collection

Dar es Salaam. The Revolutionary Government of Zanzibar (SMZ) is exploring ways of boosting its revenue collection, focusing primarily on the use of electronic systems.

Key on the agenda is the use of Electronic Fiscal Devices (EFD) and Electronic Tax Stamp (ETS) in tax collection process, the Zanzibar Revenue Board (ZRB) Commissioner, Mr Joseph Meza, told The Citizen’s sister paper, Mwananchi¸ at the weekend.

The board’s projections show that the EFD can boost revenue collection by 12 per cent.

Currently, the ZRB collects Sh40.9 billion per month.    

 “We expect that the new system will increase revenue collection significantly. To start with, we can raise revenue by Sh5 billion in revenues per month from the current average of more than Sh40 billion per month,” he said.

He said electronic tax systems would seal all revenue leakage and tax evasion loopholes.

This is contrary to the current paper receipts which offer traders with ways to easily dodge paying tax.

This is because electronic systems send information directly to the board and thus making ZRB aware of transactions being conducted at several businesses within the Isles.

“We are currently piloting this new system. We have experts to work on any shortfall that might be registered in the process,” he said.

“We are working with human beings who everyday come up with new cheating techniques and that is why we are trying to strengthen our systems,” he said noting that the use of ETS in revenues collection was also being considered.

Zanzibar’s decision to consider ETS in its revenue collection efforts comes after less than two years since Tanzania adopted the system.

The first phase of the ETS rollout in Tanzania Mainland was conducted on January 15, 2019 whereby stamps were installed on 19 companies that produce alcohol, wine and spirits.

The second phase, which involved soft and carbonated drinks and bottled water, was rolled out on August 1 last year.

Tanzania Revenue Authority is finalizing modalities associated with the rolling out of ETS’ on bottled water and juice. This has been delayed due to the nature of players associated with the production of bottled water and juice.