Manufacturers wary of new electronic tax stamps system

According to them, ETS is a digital tax stamps system intended to replace the current paper stamps applied on cigarettes and spirit alcohol.

TRA has contracted a Swiss firm known as SICPA to install ETS machines on manufacturers’ production lines at a proposed cost of US$10.1 per 1,000 units, equivalent to 22/- per unit.

“This will cost the affected industries an estimated 250bn/- annually to be paid directly to the foreign firm,” warned one of them this week.

Referring to TRA data, the aggrieved industrialists say the additional cost is nearly half of what the manufacturers pay to the government annually in excise duty, but the revenue authority is defending the move as an effective means of tracking industrial production and checking the high influx of counterfeit goods in the market.

Speaking on Monday on behalf of the affected manufacturers at the 11th Tanzanian National Business Council (TNBC) meeting chaired by President John Magufuli, the Managing Director of SBL, Helene Weesie, warned that if introduced, ETS will trigger price increases by manufacturers of affected commodities which in turn will result to reduction in sales volume, loss revenue to the government and even loss of jobs.

“In principle, we (excise goods industry) have nothing against the system if only it comes at zero cost but with its accompanying high costs, it means that the industries will incur extra production costs thus compelling them to significantly increase prices of their products. This will not only impact on the customers and consumers, but will also lead to significant reduction in government revenue,” Weesie said.

She urged the head of state to intervene and reconsider the move pointing out that ETS implementation will “reverse the gains already made in the industrial sector and cause suffering to consumers, the business community and the entire population”.

During the meeting, President John Magufuli called on both TRA and the Ministry of Finance and Planning to address concerns raised by the business community, including the heavy tax burden on the shoulders of many entrepreneurs.

“We should have a human face and avoid being too rigid because the government relies on the business community to raise revenue,” Dr Magufuli said.