22 June 2018

Tanzanian MPs Now Urge Support for Tax Stamps

Dodoma — The proposal to introduce the electronic tax stamp system took a new twist on Wednesday with some Members of Parliament asking their colleagues to focus on the revenue impact of the government's plan.

Read more: Bunge puts Swiss firm on the spot over electronic stamp tender

A Swiss company, which deals in security inks for currencies and other sensitive documents including identity cards, passports, transport and lottery tickets, SICPA, has won a tender to rollout the electronic tax stamp system in the country starting September 1, 2018.

However, debating the government's Sh32.5 trillion budget for the financial year 2018/19, some MPs said what SICPA would be making in the country during the five-year contract period is far more than what it has invested.

But on Wednesday, two MPs urged their counterparts to focus on the larger picture by looking at how the proposal would help to increase government revenues, fix tax evasion and curb loopholes.

"If it is being accused of corruption elsewhere, that is the mistake of that particular country... If our people received bribes from SICPA, that's our problem," said Mr Hussein Bashe (Nzega Urban - CCM).

Read more: Bashe gives rare backing of embattled Swiss electronic tax stamp firm

He said apart from the reported weaknesses, evidence had shown that where the company had worked, it had greatly helped governments to increase tax collections.

He proposed that in six months the Finance ministry should bring information on how effective the company has been in increasing tax revenue collections.

His Kibakwe counterpart George Simbachawene threw his support behind him, saying: "Mr Bashe has explained into detail and from a professional point of view about the government's fiscal measures... .We have every reason to support this budget," he said.

Tabling Tanzania's Sh32.5 trillion budget for the financial year 2018/19 in Parliament on Thursday, June 14, Finance and Planning Minister, Dr Philip Mipango, said the electronic tax stamps would be introduced starting September 1, 2018.

Read more: What the electronic tax stamp tender means to you

He said the new tax stamp system will enable the government to use a modern technology to obtain production data on a timely basis (real time) from manufacturers.

The move is also intended to curb revenue leakages and make it possible to determine in advance the amount of taxes to be paid namely: Excise Duty, Value Added Tax (VAT) and Income Taxes.

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