Consumers urged to buy items affixed with Electronic Tax Stamps

Dar es Salaam. Tanzania Revenue Authority (TRA) has urged the public to buy locally-manufactured goods affixed with Electronic Tax Stamps (ETS) to avoid government revenue leakages.

TRA’s Taxpayer Services and Education director Richard Kayombo told The Citizen that phasing out paper stamp tax in favour of electronic ones was a milestone for TRA and that consumers should cooperate by ensuring that all products they buy have ETS.

Electronic tax stamps have plugged revenue leakages and determine in advance the amount of tax to be paid as excise duty, VAT and income tax.

“I urge all manufacturers and importers to adhere to the new system. At the same time I call upon the public to ensure that when it is in doubt, to consult with us for clarifications,” he said.

He said the use of ETS for excisable goods was introduced to replace the physical paper stamps that were heavily linked to incidents of tax evasion.

The government announced plans to adopt the ETS system in June 2018 amid protests from manufacturers.

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

Manufacturers held a joint meeting with the government that they were not opposed to the stamps but said bearing the cost of running the system would add to the cost of doing business.

Amidst the complaints, the first phase of the ETS rollout was conducted on January 15, 2019 whereby stamps were installed on 19 companies that produce alcohol, wines and spirits.

The second phase, which saw ETS being stamped on soft and carbonated drinks plus bottled water, was rolled out on August 1, 2019.

However after the installation, the story changed recently when TBL managing director Philip Redman said the ETS was a good system as it provided a better stage for comparison on quantity produced versus taxable quantity.

The ETS system enables the government to use modern technology to obtain production data on a real time from manufacturers.

TRA maintained that the tax system will enable the government to track goods right from the factories, border entry points, warehouses to the final destination.

The ETS which has special security features for identification will replace the current paper stamps applied on cigarettes, alcoholic and non-alcoholic beverages, medicinal drugs, playing cards, bottled water, cosmetics, licences and other products.