Abolition of road licence fee to frustrate TRA targets: source

Dar es Salaam. The government’s proposal to abolish the annual motor vehicle registration fee is likely to frustrate targets of the Tanzania Revenue Authority (TRA) in the tax category as payers hesitate doing so as they await amnesty.

Last week, the government, through the Finance and Planning minister, Dr Philip Mpango, tabled in Parliament this year’s national budget, which proposed the abolition of the annual road licence fee and provided tax amnesty for arrears.

He proposed the fee would be paid only once and through petrol and diesel starting on July 1.

However, some vehicle owners are reluctant to pay the fee even as their time has expired as they wait for the tax amnesty to come to effect next month.

A source from the taxman, who preferred anonymity, said it was unlikely for TRA to meet its targets as far as the motor vehicle licence fee was concerned due to a delaying paying tactic by taxpayers.

However, TRA director of taxpayer services and education Richard Kayombo told The Citizen that they were able to collect Sh170.9 billion in its motor vehicle license fees since July 1, 2016 to date.

Commenting on this, Repoa senior researcher Abel Kinyondo said the government had expanded motor vehicle taxation from motor vehicle owners to all Tanzanians, who had to consume petroleum products either directly or indirectly. “This is a good opportunity for TRA because, while the majority of vehicle owners could in the past go up to three years without paying the licence fees, now they have no option, but pay as they cannot move their vehicles without petrol,” he said.

In view of this, he said TRA revenue would increase through a Sh40 increase in petroleum products.

He stressed the Sh40 increase cost would definitely be taken to the final consumer.

He noted that travellers moving to and fro in public transport would also incur additional cost from public transport vehicles, motor cycles and bajajs. He said the costs would also be incurred by those living in rural areas and using generators as sources of power and women, who would cook using kerosene.