Parliament to submit proposal for electronic tax stamps rollout on bottled water, cement and sugar
Dar es Salaam. The Parliamentary budget committee will submit a proposal to the government that seeks to ensure that Electronic Tax Stamp (ETS) are rolled out on sugar, cement, water and juice.
The committee’s chairman Mashimba Ndaki told The Citizen on Tuesday, April 21, 2020 that before submitting their proposals, they would first meet with the ministry of Finance and Planning and Tanzania Revenue Authority (TRA).
The meeting, slated for Wednesday, April 22, 2020, would discuss challenges that the taxman was grappling with during the entire period of Covid-19 pandemic and propose ways to curb them.
“After tomorrow’s (Wednesday) meeting we will have another meeting by the end of this week or early next week which will bring together the committee, TRA, the Ministry of Finance and producers,” noted Mr Ndaki.
Also present at the meeting – slated for Saturday – will be Swiss firm, Société Industrielle et Commerciale de Produits Alimentaires (SICPA), a company that has supplied the TRA with the ETS system.
SICPA will be specifically required to show how the ETS can help in boosting revenues if rolled out on other products.
“ETS has proven successful because it provides no loophole for tax evasion because it enables the government to trace the actual quantity produced,” said Mr Ndaki who doubles as Maswa West legislator for CCM ticket.
The government announced plans to adopt the ETS system in June 2018 and SICPA won the tender to supply the system.
The first phase of the ETS rollout 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 - was implemented on August 1 last year.
However, the taxman is yet to issue a public notice for ETS rollout on bottled water and juice. This suggests that the old paper stamps were still being used in calculating tax for bottled water and juice.
Data from TRA shows that excise duty on products that had had ETS stamped on them rose by 33.7 percent from Sh58.2 billion that was registered during the period between February and October 2018 to Sh77.8 billion that was garnered during the same period in 2019.
Excise duty on soft drinks jumped by 8.7 per cent to Sh10 billion between September and October last year compared to the similar period in the preceding year.
Mr Ndaki meanwhile says this was the right time for the government to put in place tax and administrative incentives that would stimulate industrial production.
