EFDs and Cheating Supermarkets

Posted: March 18, 2013 in Development, Tanzania

mlimani cityThere have been increased number of shopping malls and chains of departmental stores. They are good signs of growth of middle class and consumerism culture taking root in Tanzania. Out of this there is also increased tax base from big consumers. The evident has been with the introduction of EFDs with the sole of aim of reducing tax avoidance loophole. Technology usually take toll over common man, ATM once lauded by many has been new area where con-men use to steal from people’s bank accounts has made many resort to Mobile money services like M-Pesa likewise with EFD also brought new stealing behavior through the shopping malls who are good users of these devices even before their formal introduction by the taxman in 2010.
Electronic Financial Device
Three years down the lane after the TRA’s introduction of Electronic Fiscal Devices (EFDs) as an aid to tax revenue collections, especially in the area of value-added tax (VAT) collections!
The assumption was small business owners and venders were the major losers in this new trending way of creating bigger tax base. The second was customers and consumers, it is not hidden truth that initially, shopping at the Carrier Corps (Kariakoo) market, and you were either asked if you want EFD receipts or the manually written receipts. Claiming that the EFD receipts meant that you pay higher tax inclusive, manual receipts pay lower which means no tax cuts will be considered by the shop owner. The last stakeholder who was worried more was the government that compliance was headache due to the reluctant of business owners to accept it and ensure they pay tax.
According to information made available by the taxman at the end of 2012 shows that there was 40 per cent increase from a total of Tsh785,882.4 million in the 2009/2010 FY before introduction of EFDs to Tsh1,086,374.0 million 2011/12 FY. This is a laudable achievement so far. The 14,000 registered users of this device have developed Kleptomania within.
Kleptomaniacs within
Kleptomania has its den well built within the shopping malls. The stealing takes toll on customers who don’t bother to counter check the names of the products they buy and the price tags. The well educated or trained staff of some malls have taken advantage of the products they sale by overcharge customers. At the counter you will find these staffs struggle to decode the products selected from the display shelves by customers, if they get problem with it they retrieve earlier sales records of the same product or of different but related product and charge you higher.
Common reason being the name tags have not been charged for so long or you didn’t read and select carefully. This is cheating, stealing from innocent people and yet sometimes they pay less tax by overcharging customers. Biggest mistake can be questioning such differences and why sending wrong price tags to deceive customers, it is not unfortunate for a guard to ask you leave or else you are stubborn and wasting others time to be served, it not normal for people in this land of plenty to question.

Reasons for Price tags and Name tags
The tags are meant to reduce time for bargaining, maintain consistency, and facilitate self service and to reduce the energy used by few staff moving from shelf to shelf. In Tanzania it is not surprising to realize that the price and name tags are nothing but a tradition that is not taken seriously, where many shelves will be having either outdated tags, over priced tags, or underpriced tags and made to pay in many cases higher than what you saw as a tag.

It is easier to still for Customers in Shopping malls than at vendors where people have time to ask.
The assumption is that shopping malls are located distance a part from small retail shops, or in some big posh air conditioned buildings people, some walk distance to be served in the cafés located therein, people who visit supermarkets aren’t good bargainers, they believe that supermarkets sale quality products compared to those being sold at Manzese or Tandika markets. Another assumption is customized packaging bags which sometimes add value and that when you pay for the service, keep all that in mind.
This might be true as I have always been warned by a friend who is a regular visitor of these new joints that if you want enjoy air-conditioned buildings, see some well dressed people, admire imported products and pay for all that go to supermarkets but if you want to contribute to the wellbeing of poor vendors go to Manzese the same product different same quality, but different package and price go to Mlimani City Mall, Quality Centre or Shoppers Plaza.

Next time watch out, you will pay for what you did buy or use, this is new style in Bongo shopping malls.

  1. […] EFDs and Cheating Supermarkets (josephogana.wordpress.com) […]

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