The report states that current DTAs are outmoded and contain ring-fenced taxation rules that undermine Tanzania’s taxing powers.
What you need to know:
The report was presented by Mr Moses Kalaba on Tuesday during a forum on the impact of the treaties on foreign direct investment and revenue collection in the country. He said the current DTAs are outmoded and contain ring-fenced taxation rules that undermine Tanzania’s taxing powers.
Dar es Salaam. Tanzania has been challenged to review the Double Taxation Agreements (DTAs) it has signed with various countries and modify them for the benefit of the country.
A report by Policy Forum Organisation, a non-governmental body, reveals that the DTAs which are in force now, are antiquated.
The report was presented by Mr Moses Kalaba on Tuesday during a forum on the impact of the treaties on foreign direct investment and revenue collection in the country. He said the current DTAs are outmoded and contain ring-fenced taxation rules that undermine Tanzania’s taxing powers.
Under the agreements, revenue collection is in favour of the developed countries which are treaty partners, according to Mr Kalaba.
“The study does not show that DTAs are totally irrelevant, but evidence doesn’t support what is actually expected. The findings reveal that treaties are largely harmful and costly to Tanzania and that’s why we suggest reviewing them,” he said.
Responding to the study, Ms Eva Nilsson, a policy advisor of Finland’s KEPA, an NGO, said: “It is time now for the government to review the treaties for the benefit of Tanzanians.” He also advised the government to table the treaties in Parliament for approval before signing them.
Meanwhile, the Tanzania Revenue Authority (TRA) senior legal counsel, Mr Adelard Alfred, has asked the government to invest in community capacity building, a conceptual approach to development that focuses on understanding the obstacles that inhibit realisation of development goals.
Mr Alfred suggested that all major players on issues pertaining to revenue collection, including the ministry of finance, ministry of Foreign Affairs, Attorney General’s Office, Revenue Authorities, Parliament and Civil Societies, be involved in such exercise.
“TRA in collaboration with the ministry of Finance has formed a special unit (International Taxation Unit) to deal with DTAs,” Mr Alfred said. According to the report, Tanzania has signed the DTAs with nine countries and plans are afoot for it to sign another treaty with Mauritius.
