Dar man­u­fac­tur­ers protest e-tax stamp

The East African - - NEWS -

The Tan­za­nia Rev­enue Au­thor­ity (TRA) has moved to im­ple­ment the elec­tronic tax stamp (ETS) on lo­cally man­u­fac­tured and im­ported goods even as local man­u­fac­tur­ers protest the pass­ing of the project costs to them.

Last year, the gov­ern­ment an­nounced a ten­der award to a Swiss firm SICPA to in­stall and sup­port ETS man­age­ment sys­tem. Man­u­fac­tur­ers said at a joint meet­ing with the gov­ern­ment that they were not op­posed to the stamps but bear­ing the cost of run­ning the sys­tem would add to the cost of do­ing busi­ness.

The ETS ap­pli­ca­tion took ef­fect this month.

Man­u­fac­tur­ers of beer, soda and cig­a­rettes said that the ten­der was not awarded com­pet­i­tively and that the terms in­ap­pro­pri­ately re­quired them to pay for the in­stal­la­tion of the stamp ma­chines.

TRA Com­mis­sioner Gen­eral Charles Kichere said the ETS was meant to safe­guard gov­ern­ment rev­enue by pro­vid­ing ac­cu­rate pro­duc­tion of data on real time.

Mr Kichere fur­ther noted that through ap­pli­ca­tion of ETS, the gov­ern­ment would de­ter­mine in ad­vance, the amount of duty to be paid and pro­vided by TRA. The tax sys­tem will en­able the gov­ern­ment to track goods right from the fac­to­ries, bor­der en­try points, ware­houses to the fi­nal des­ti­na­tion.

“Man­u­fac­tur­ers and im­porters cov­ered by cur­rent non-elec­tronic stamps are en­cour­aged to keep stock of old tax stamps up to the end of Septem­ber , while those with stock of old stamps to last af­ter Septem­ber this year should de­clare to in writ­ing for ver­i­fi­ca­tion,”, TRA said in a no­tice.

“The prod­ucts al­ready in the mar­ket la­belled with pa­per stamps will be sold for a three-month pe­riod from Oc­to­ber 1 this year be­fore af­fix­a­tion with new elec­tronic tax stamps.”

The ETS will re­place the cur­rent pa­per stamps ap­plied on cig­a­rettes, al­co­holic and non-al­co­holic beverages, medic­i­nal drugs, play­ing cards, bot­tled wa­ter, cos­met­ics, li­cences and other prod­ucts. The stamps have spe­cial se­cu­rity fea­tures for iden­ti­fi­ca­tion.

The gov­ern­ment con­tracted SICP, to in­stall and main­tain the ETS sys­tem at a cost of $10.1 per 1,000 stamps. Man­u­fac­tur­ers will meet the con­trac­tor’s in­vest­ment costs on top of their own costs of do­ing busi­ness.

The Par­lia­men­tary Bud­get Com­mit­tee said in a re­cent re­port that the ap­pli­ca­tion of ETS on soft drinks and other beverages in­clud­ing bot­tled wa­ter will be a bur­den to con­sumers as pro­duc­tion costs are set to go higher.

The new sys­tem us­ing dig­i­tal tax stamps will in­crease ex­cise duty as charges will be per unit in­stead of the cur­rent charges cal­cu­lated per liter, mak­ing it a bur­den to pro­duc­ers and con­sumers, the com­mit­tee said. Soft drinks, beers, juices and wa­ter were not charged stamp duty be­fore the in­tro­duc­tion of the ETS.

The then Serengeti Brew­eries Ltd (SBL) manag­ing di­rec­tor He­lene Weesie said the move would push the tax rate to $10.1 per 1,000 units, re­sult­ing in an ad­di­tional $100 mil­lion an­nual cost to the in­dus­try.

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