The premier administrator of public revenues, the Tanzania Revenue Authority (TRA), is right to gloat over its record revenue collection of Sh1.767 trillion in September of the 2019/20 financial year.
That is, indeed, a great leap forward of its kind.
This is especially considering that, about a decade ago, TRA was able to collect the ‘relatively small’ amount of Sh418.9 billion in September of the 2008/09 financial year.
An increase of more than fourfold in public revenue collections over a decade in this day and age of rampant tax evasion/avoidance and yo-yoing economies is a herculean task.
It is, indeed, ‘one giant leap for the Taxman – much as it was ‘one giant leap for Mankind’ when astronaut Neil Armstrong landed and stepped on the moon on July 20, 1969!
But, cosmology aside, we must not lose sight of the fact that the otherwise steep increase in revenue collections still leaves much to be desired. Hence, it is nothing to really shout about from the rooftops – or, worse: lull the taxman into resting on what are really thinly-spread laurels.
While the Sh1.767 trillion collected as public revenue in September this year broke the record vis-à-vis past monthly revenue collections, that amount was actually 97.2 per cent of the collection target of Sh1.817 trillion for September as set by forward planners.
In the current financial year, TRA is tasked to collect a total of Sh19.1 trillion to partly finance the government budget of Sh33.1 trillion. In other words: to attain the Sh19.1 trillion domestic revenue target, the taxman must collect an average of Tsh1.59 trillion a month – come rain, come shine!
Assorted revenue collection factors
It so happens that monthly revenue collections depend on assorted factors that vary from month to month, from quarter to quarter, and from year to financial year. These include – but aren’t limited to – high and low trading seasons; at the beginning of a financial year (when taxpayers are lackadaisical), or rush to pay taxes before the financial year closes...
For example, while TRA collected Sh1.079 trillion in July 2017 (at the beginning of the 2017/18 financial year), it collected Sh1.476 trillion in June 2018, at the close of that financial year.
Indeed, government revenue collections have been rising each succeeding financial year. Never mind that ‘financial gremlins’ like inflation and currency depreciation have been gnawing away at the increases.
In any case, TRA’s commissioner general Edwin Mhede attributed the relatively phenomenal increase in revenue collections in recent times to strengthened tax collection systems. These have included “tight monitoring of use of electronic fiscal devices” which can be used to automatically transmit tax information to TRA.
Other ‘drivers’ of the rise included: plugging tax evasion loopholes, an all-in-all friendly tax environment, and encouraging voluntary tax compliance through appropriate public education and incentivisation.
We’re encouraged by the improved revenue collections. But, we’d like to see the collections meeting – and even exceeding –the set targets as a matter of course, especially now that the electronic tax stamps system was put in place last January.