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CTI appeals for reduced costs on digital tax stamps

CTI appeals for reduced costs on digital tax stamps

AS the country gears for tabling of the budget for financial year 2020/2021 on June 11, local manufacturers have appealed to the government to consider reducing costs of Electronic Tax Stamps (ETS), for goods subjected to excise duty.

Apart from excisable goods, chances are also high that the system will be extended to other products such as cement and sugar as the government seeks to curb cheating of taxes and flooding of fake products in the local market.

Through their apex body, the Confederation of Tanzania Industries (CTI), the manufactures noted that despite achievements re- corded in tax collections and curbing counterfeit products in the local market, it was high time the government reduced the costs of ETS to lower production costs on their part.

The appeal by CTI was contained in their budget proposals to the tax re- forms task-force ahead of the tabling of the budget by Finance and Planning Minister, Dr Philip Mpango, in the National Assembly on June 11 in the capital city of Dodoma.

Figures released by the Tanzania Revenue Authority (TRA), have shown that since the first phase for ETS management system was introduced for excisable products in January, last year, there has been a consider- able increase in collection of taxes.

According to the figures by the taxman, collection of excise duties on spirits rose to 13.8bn/-, translating to an increase of 74.4 percent, during the first quarter of 2020 as compared to revenue collected during the same quarter in 2019.

In the same line, Value Added Tax (VAT), for the same products increased by 22.8 per cent during the period under review.

During the first phase of ETS which was introduced in January 2019, which cov- ered cigarettes, beers, spirits and wines while the second phase which was introduced in August 2019, extended to carbonated soft drinks and bottled water.

However, through CTI, the producers decried the cost of 20 US dollars per 1,000 sticks of locally produced and imported cigarettes, saying the rate is pushing up production costs.

“Despite the positive results of the system, it has also resulted into additional costs of US 20 dollars and 8.55 US dollars for 1,000 units of spirits and beers, respectively” the manufacturers appealed in their proposals.

The apex body thus rec- ommends the cost of 8.55 US dollars per 1,000 sticks of locally produced ciga- rettes and US 20 dollars for the same quantity of imported cigarettes.

The CTI finally proposed for a meeting with TRA and the Swiss firms that supplies hardware and software of ETS, Société Industrielle et Commerciale de Produits Alimentaires (SICPA), to chart the way forward.

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Author: DAILY NEWS Reporter

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