Relief as government cuts electronic tax stamp rates

Tuesday January 18 2022
Stamps Pix
By Josephine Christopher

Dar es Salaam. The government has marginally reduced fees for Electronic Tax Stamps (ETS) in a renewed effort to cut manufacturers’ operating costs for the benefit of final consumers.

Yesterday, the government reduced the fees for Electronic Tax Stamps (ETS) in a response to concerns by manufacturers and some Members of Parliament (MPs) who have been deploring the rates, saying they are exorbitant.

The new rates, announced by Tanzania Revenue Authority (TRA) will be lower by between 0.5 and 11.26 percent compared to the previous ones, according to calculations by The Citizen.

Manufacturers could not be reached for a comment yesterday, with insiders telling The Citizen that some of them, under the umbrella of the Confederation of Tanzania Industries (CTI), had immediately called a meeting to deliberate on the issue.

“It is being discussed and a statement to that effect will be released soon,” said a source who did not want to be named.

TRA’s director for taxpayer services and education, Mr Richard Kayombo, said the decision to reduce the fees rates was meant to provide relief to manufacturers’ costs of production and consequently affordability to consumers.

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The decision, he said, was also deemed fit due to economies scale, occasioned by the rise in the number of manufacturers registered with ETS from 57 when the system was adopted to the current 272.

He said unlike during the previous time when ETS payments were in the United States dollar, the revised rates will be paid in Tanzania Shillings.

“Previously, we were also collecting these fees using dollar currency but from now on manufacturers will be able to pay using local currency which will be more convenient for local producers,” said Kayombo.

In regard to the reduced rates, Mr Kayombo said it was obvious that manufacturers would always seek more reduction, noting however that TRA had taken into consideration a number of factors, including operational costs, before issuing the new rates.

“It is our belief that these new fees will bring relief to both the manufacturer or importer and the final consumer,” he said.

Tanzania adopted the ETS in January 2019 with the Swiss multinational provider of security inks as well as secured identification, traceability and authentication solutions, Sicpa winning the tender.

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.