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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