Tanzania revenues body told why technology is key to boosting tax collection

Tanzania Revenue Authority (TRA) Commissioner General, Dr Edwin Mhede

Dar es Salaam. A global customs organization wants Tanzania to foster its investment in new technologies as a way of boosting tax collection for the general good of the economy.

The World Customs Organization (WCO) believes that investment in technological innovation was the only way to boosting tax collection and thus enhancing the country’s ability to investing world-class infrastructure.

“A country cannot run away from technology if it is to effectively manage tax collections through customs,” the WCO’s secretary general, Dr Kunio Mikuriya, said recently.

He was speaking in Dar es Salaam when he held talks with Tanzania Revenue Authority (TRA) Commissioner General, Dr Edwin Mhede.

Established as the Customs Co-operation Council (CCC) in 1952, the WCO is an intergovernmental organization that works to improve the efficiency and effectiveness of customs administrations worldwide.

The advice comes at a time when TRA was undertaking several technological advancements to streamline operations of its customs department.

In 2014, TRA introduced web-based Information Technology system Tanzania Customs Integrated System (Tancis) to progressively facilitate paperless Customs operations.  

TRA has also implemented the Electronic Single Window System through the Tancis platform which links Customs with other government authorities and the private sector.

On the exercise duty category, TRA has also implemented the Electronic Tax Stamp (ETS), with reports showing that its implementation has played a significant role in boosting revenue collection.

The first phase of the ETS rollout was conducted on January 15, 2019 whereby stamps were installed on 19 companies that produce alcohol, wine and spirits.

The second phase, which saw ETS being stamped on soft and carbonated drinks as well as bottled water, was rolled out on August 1 this year.

Available data show that the taxman garnered Sh77.8 billion in excise duty on spirits and wines between February and October this year compared to Sh58.2 billion collected during the similar period last year.

During the same period, VAT on the same products (spirits and wines) grew by 30.6 per cent to Sh23.5 billion.

There was an 8.7 per cent and 19.5 per cent increase in excise duties and VAT respectively on soft drinks during the same period.

Dr Mikuriya asked TRA to foster its adoption of various technological systems with a view to boosting revenue collections while at the same time, tweaking its workforce with latest developments in technology.

In his remarks, Dr Mhede said Dr Mikuriya visited Tanzania because the country is a member of the WCO and thus the need to foster working relations between the two.

“Tanzania is a member of the WCO. We work closely on a number of issues aimed at ensuring that there is safety and security in conduct of customs operations,” he said.

Tanzania is shares the border with a number of land-locked countries and therefore, the country is main gateway for imports and exports to/from Malawi, Zambia, Zimbabwe, Uganda, Rwanda, Burundi and the Democratic Republic of Congo among others.