Tanzania’s Tax Stamp Success

The Tanzanian Parliamentary Budget Committee has commended the performance of the country’s tax stamp programme and has called for it to be extended to more products.

The programme (whose underlying technology is provided by SICPA), was introduced in January 2019 on tobacco products, wine, spirits and beer, and extended to flavoured water and carbonated drinks seven months later. Then in a third phase, the system was expanded to bottled water, juices, and film and music products.

The system gives the Tanzania Revenue Authority (TRA) near real-time access to the production data of domestic manufacturers. This allows it to identify and curb revenue leakages by being able to determine excise duty amounts in advance and accurately estimate the VAT and corporate taxes owed.

Figures availed by TRA show that the system has led to a significant increase in excise and VAT revenues compared to previous years.

As a result, the Parliamentary Budget Committee has proposed the adoption of tax stamps on products that include cement, sugar, cosmetics and veterinary medicines.

This initiative follows a similar move by Tanzania’s East African neighbour, Uganda, which extended its tax stamp programme to cement and sugar earlier this year, and has recently extended the programme further to cover an additional five categories, including cooking oil, juices, energy drinks and other non-alcoholic products. Like Tanzania, Uganda’s tax stamps are provided by SICPA.

Despite the COVID-19 impact on the industry at large, the Uganda Revenue Authority registered its highest growth of 15% in 2020/21, the highest in the last four years. This has been attributed to the successful implementation of the tax stamp programme.