Competitive stamp duty rates a plausible demand

-relatively uncompetitive locally and regionally. This is asserted with the background aspect that the proper tax tariffs especially for imports are decided at the regional level and in that case aren’t available for ministerial review save as agenda for the next round of budget discussions in East African Community context. Stamp duty is a localized affair.

One observation that Leodegar Tenga, the president of the Tanzania Confederation of Industries l(CTI) pointed out is that alternative service providers for the stamping and duty collection collect half of the rate that has now been instituted by the Tanzania Revenue Authority. He said it was a marginal diminution of the rate applicable earlier, and thus appealed for a 75 per cent cut in what is now being imposed, so that it isn’t a burden on manufacturers. The costs incurred by the company that collects the duty charges were not tabled but alluding to alternative service providers taking half the charge implies monopoly effect.

There is all the same a complicating factor in the fact that there is an atmosphere of levies and tolls in this or that regard, so that every branch of industry or commerce contributes appreciably to development efforts, in ways that collective deliberation makes it imperative. But the fact that this levy isn’t being collected by TRA and instead it goes directly to a franchised firm complicates discussion on the matter. The CTI president’s remarks were suggesting in a sense that this is directly income for the company, and it is a foreign company apparently allowed to overcharge local manufacturers for the services it provides.

Another suggestion the CTI leader put forward is that the government conducts a review of the franchise and next time the tender be allocated to a local firm in open bidding.  This goes back to the frequently leveled idea that major data control systems should be under local firms or those manning them should not be expatriates, and it is given as common sense - that it is for the national interest. Experience all the same doesn’t instruct that local control is the same as efficiency, or whether it controls corruption better.

The difference is basically psychological, that a franchised operator is beholden to the government for instructions and has an international reputation to protect and avoid ethical contentions on how the work is conducted. Local control of data opens doors to cartels of one sort or another holding a shield in the face of the government, incapable of ascertaining the facts in anything, unless by the use of auxiliary means of data collection. So local firms need to have partial foreign ownership to enhance their level of internal controls and ethical disposition, otherwise an environment arises for a new anti-corruption drive.