ETS plays key role in boosting TRA’s revenue collection process

2022-06-25 10:56:31 By : Ms. Chloe Zou

​​​​​​​DURING the 2021/22 fiscal year as of May, 2022, Tanzania Revenue Authority (TRA) had managed to collect 19.96trn/- from the targeted 20.41trn/- as the Electronic Tax Stamp (ETS) system played a key contribution in the revenue collection process.

Innocent Minja, TRA’s ETS Project Manager told The Guardian earlier this week that the revenue collections are equivalent to 98 percent of the anticipated target.

“The contribution of the products which are using the ETS system in tax collected over the same period such as excise duty and VAT from those products of cigarettes, alcohols (beer, wines, and spirits; non alcohols—soda, juices and bottled water, which are locally manufactured stood at 1.09trn/- contributing 9.2 percent of the total tax collected domestically,” said Minja.

According to him, TRA is confident that the ETS system has helped in safeguarding the government’s revenue by ensuring that there is full utilization of modern technologies in obtaining real time production data from the manufacturers.

He asserted that since the country’s economy is recovering from the COVID 19 pandemic impacts, TRA is confident that the ETS will play a major role in increasing significantly revenue collections during the 2022/23 financial year.

Minja noted that success stories that came with the ETS system did not come from the blues but from well-designed plans.

TRA had launched an awareness campaign during this ending financial year where TRA staff, manufacturers, importers and clearing and forwarding agents was educated on how the ETS system works.

However, he said, the awareness campaign was extended to the public, where the public is sensitized on the use of the public mobile app commonly known by a Swahili name-HAKIKI STEMPU.

“Through the app taxpayers can verify the validity of the stamp affixed on the package of a product and can as well report if the stamp is not genuine or if the product’s information does not match with the product he had paid for,” said Minja.

Commenting on complaints that came with the system, Minja said most of which came from manufacturers, but are being worked out by TRA in collaboration with the Confederation of Tanzania Industries (CTI).

“Manufacturers had pleaded for the reduction in the operation costs. TRA had in January 2022 reduced the stamps by 12 percent.  However, TRA announced a new tender for service providers to bid.

The aim is obtaining a new service provider who will offer the ETS at low cost as claimed by manufacturers. The procurement processes are ongoing,” he asserted.

The Electronic Tax Stamp (ETS) system was rolled out in January 2019, with the aim of safeguarding the government’s revenue by ensuring that there is a use of modern technology to obtain production data on a timely basis (real time) from the manufacturers.

This comes because of the Excise Duty, which is levied upon production of specific goods, therefore knowing the actual production is reasonable.

In that case, Minja said the introduction of the ETS came with high technology security features which simplified the coordination of taxpayers and created transparency in assessing taxes especially Excise Duty, Value Added Tax (VAT) and Corporate Tax.

In another development, government has realized sub-standard Electronic Fiscal Devices (EFDs) receipt papers that allow printing on the receipts fade very fast.

Deputy minister for Finance and Planning, Hamad Hassan Chande told the August House recently that the Tanzania Revenue Authority (TRA) has strengthened its system in effort to curb the problem.

Chande was responding to a question asked by the Special Seats MP, Angelina Malembeka (CCM), who asked: “What is the government doing in effort to ensure that EFD receipts’ printings do not fade away within a short time?”

In response, the deputy minister said the problem is caused by use of sub-standard printing papers and not the required thermal paper.

He explained that after realizing the challenge, both Tanzania Bureau of Standards (TBS) and TRA have collaboratively come up with the required standard of people to be used.

“The two institutions are closely monitoring the type of printing papers on use to ensure the quality of the document,” said Chande.

The deputy minister in addition said TRA has improved its EFD monitoring system, enabling to get information of every receipt printed and a copy is saved in the revenue authority’s saver, He said a copy can be obtained at any time when need be.

In Mainland Tanzania, suppliers of goods and services whose annual turnover is 14m/- or more are required to issue receipts (or invoices) through Electronic Fiscal Devices (EFDs), known as fiscalised receipts (or fiscalised invoices).

The Value Added Tax Act 2014 also requires VAT registered persons wishing to claim input value added tax (VAT) on their local purchases to be in possession of fiscalised invoices/receipts at the time of recording these claims in the VAT returns.

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