Relieve workers of the tax burden, PwC advises Tanzania

Thursday July 12 2018

PwC Tax partner Joseph Lyimo addresses the

PwC Tax partner Joseph Lyimo addresses the press at the CEOrt event. Next to him is Standard Chartered Bank CEO Mr Sanjay Rughani. Photo | Courtesy  

By Alfred Zacharia @azacharia3

Dar es Salaam. The government has been urged to harmonise business environment to widen the tax base and reduce the tax-burden on employees. The call was made by an audit firm, PwC.

A PwC Tax partner Joseph Lyimo made a call to the government during a gala dinner hosted by the Chief Executive Officers Round Table (CEOrt) on Tuesday, discussing about the recently passed Finance Act 2018. His reaction was based on the recent report by the National Bureau of Statistics (NBS) and related stories published in local media outlets showing that workers in Tanzania were paying more tax than employers and businessmen. 

Read more: Tanzania workers pay more tax than employers: report

The report reveals that employers were paying less taxes after selling their goods and services compared to their workers who pay tax on their salaries in the form of Pay-as-you-earn (Paye) and buying goods and services. 

During the year 2016/17 employees’ tax collected was Sh2.27 trillion compared with Sh1.45 trillion paid by corporate entities in form of corporate taxes, according to the report. 

“Workers are paying taxes in many forms! They pay in form of Paye, buying goods and services that attract Value Added Tax (VAT) and excise duty. They go home with a small amount in their pockets,” he observed. 

As a result Mr Lyimo said that purchasing power of employees to goods and services remain unstable, resulting to poor sales of goods in the markets. “I suggest the government to reduce the tax-burden to employees especially on Paye rates and improving business environment so that workers will pay tax in other forms, particularly buying goods and services,” he noted. 

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