How TRA exceeded Sh2 trillion monthly target

Dar es Salaam. The government will be finding it increasingly easier to finance its budget as revenue collections rise to record levels, courtesy of an expansion in economic activities, data shows.

“The revenue collected is expected to play a crucial role in the government’s budget execution, facilitating funding for essential public services and critical development projects,” economics professor Samuel Wangwe said yesterday.

He, however, highlighted the need for the government to continue putting in place a conducive environment that will enable the private sector to thrive.

Apart from roads, bridges and social services, some of the strategic projects the government is currently implementing include the standard gauge railway, procurement of planes for Air Tanzania Company Limited and construction of Julius Nyerere Hydropower Station.

The Tanzania Revenue Authority (TRA) announced yesterday that it collected Sh6.57 trillion in tax revenue during the first quarter of the 2023/24 financial year.

The amount collected from July to September 2023 was 11.05 percent higher than what was garnered during last year’s corresponding period.

In total, the taxman collected a record Sh2.62 trillion in September alone, which was 108.41 percent of the target.

TRA Commissioner Alphayo Kidata attributed the increase to a range of factors, including expansion of economic activities, adoption of technology and public awareness campaigns conducted by the authority.

“Tanzania has witnessed increased economic activities in recent times, including industrial production, imports and a thriving tourism sector, which have all contributed significantly to revenue growth,” Mr Kidata said in a statement.

In a nutshell, the sum collected during the three month-month period suggests that the taxman’s average monthly collections have now crossed the Sh2-trillion-mark.

It means that TRA collected an average of Sh2.19 trillion each month from July to September 2023.

This is what the President Hassan’s administration promised soon after she assumed office in March 2021.

In April 2021, she said during the swearing-in of Dr Mwigulu Nchemba as Finance minister that it was possible for TRA to collect Sh2 trillion monthly, but warned against conduct that adversely affected businesses.

“Finance minister, you have the target of collecting Sh2 trillion in tax revenue each month, but that should be done through expansion of the tax base,” President Hassan said.

Collecting an average of Sh2.19 trillion per month means that the amount garnered has risen by Sh760 billion per month from a monthly average of Sh1.43 trillion collected during the 2019/20 financial year.

According to Mr Kidata, the rise has also been possible due to the widespread adoption of information and communication technology (ICT) systems in tax management and collection and streamlined tax administration, which have made collection more efficient and user-friendly.

A financial and economic analyst from Ardhi University, Rashid Aziz, said, “Efficiency in tax collection can be attributed to paying taxes online using reference numbers. This method has made life easier for taxpayers and at the same time plugged tax evasion loopholes since the money goes directly to TRA’s account.”

It was also noted that increased revenue collection shows that the economy is thriving and with increased economic activities and the high tourism season, revenue collection is likely to increase even further.

Ongoing campaigns such as “Mlango kwa Mlango” and “Tuwajibike” have raised public awareness and commitment to tax compliance throughout the country, according to Mr Kidata explained.

TRA remains steadfast in its efforts to enhance revenue collection processes, promote tax compliance and explore innovative methods to boost revenue generation.

These achievements in the first quarter of the 2023/24 fiscal year signify not only the dedication and effectiveness of TRA in revenue collection, but also the nation’s ability to adapt and thrive in challenging economic circumstances.