Other products targeted for electronic stamps include fruit and vegetable juices, bottled water, and music products. Their manufacturers will have to register their products and request the estimated number of stamps needed in the year. The electronic stamp duty will not only track goods in the country, but will also help increase the income of the lower middle income country.
The Ministry of Finance and Planning requested the Tanzania Tax Authority (TRA) to meet with a Swiss company responsible for supplying, installing and supporting the operation of the electronic tax stamp (ETS) software and resolving problems delaying the project.
The tax authorities and the Société Industrielle et Commerciale de Produits Alimentaires (SICPA) signed the agreement in 2018, but its implementation was delayed due to cost issues.
Deputy Finance and Planning Minister Hamad Masauni told the National Assembly yesterday that he had met the two sides on Monday this week and asked them to review the terms of the contract for it to be revised. with the aim of bringing relief by reducing the operations costs and thus increasing the amount of income generated by the application of the ETS system.
He was responding to the question that arose in the House on Monday when parliamentarians proposed to suspend the contract or place it under the control of the Tanzania Bureau of Standards (TBS) and whether the office lacks the technology required to manage the defect effectively, the private sector can be invited to bid for the tender and attract the competitiveness which will lead to lower operational costs
“I have asked TRA to start preparing by providing well-organized technologies that will allow it to manage such systems if needed in the future. I urge TRA to consider technological developments as a key part of its operations, especially as everything goes digital, ”said Eng Masauni.
According to him, a careful feasibility study was not carried out well in the process, as the construction allowed TRA to generate meager turnover.
In his contributions to the just-approved budget, Special Headquarters lawmakers Halima Mdee alarmed the problem that the government was not receiving reasonable revenues from the outsourced company, calling for a new process of call for tenders to have the new entrepreneur or, failing that, by choosing a public company to carry out a similar exercise.
“So far, tax records show that around 245 manufacturers have already received ETS machines, but there is no success so far if you look at the figures before and after signing the contract,” she declared.
Mdee said that before the contract in 2018, TRA collected 237 billion / – per year, but today only 246 billion / – was collected electronically with the difference of only 8 billion / -, which was still skinny.
ETS replaced the paper tax stamps that had previously been attached to cigarettes, wines and spirits. The signing of the contract saw the company extend the service to all excisable products including beers, sodas and other non-alcoholic beverages in order to control counterfeiting and promote tax compliance.
However, some circles of the public, including manufacturers, have resisted the arguments. During the debate on the 2021/2022 budget yesterday, MEPs opposed the contract between SICPA and TRA.
Bahi CCM MP Keneth Nolo on Monday advised the government to find another way to deal with the problem, but doubted that the government was losing much of the contract it made.
On a related note, Kisesa MP Luhaga Mpina asked the minister to tell the House how much SICPA is making per year as he insisted that the contract was even killing business for the suppliers of said products.
“We should be told when this contract is coming to an end because the company is not even paying a dividend to the government,” he said.