Tanzania Revenue Authority puts tax evaders on notice

What you need to know:

  • In collaboration with the UK-based International Growth Centre (IGC), TRA has unveiled a new and improved dashboard system capable of vigilantly tracking all EFD machines

Dar es Salaam. Business owners beware: If you haven't been using electronic fiscal devices (EFDs) properly, it's time to start.

The Tanzania Revenue Authority (TRA) has revamped its high-tech systems to closely monitor EFD users suspected of tax evasion.

In collaboration with the UK-based International Growth Centre (IGC), TRA has unveiled a new and improved dashboard system capable of vigilantly tracking all EFD machines.

"The system is already operational and has shown promising results," affirmed Mr Ephraim Mdee, TRA's Director for Research Policy and Planning. "Tax collections have begun to increase, marking a positive outcome compared to the past, when traders were not issuing receipts as required after sales."

The improvement in tracking fiscal device usage is also part of recent research conducted by IGC and TRA on challenges related to the use of EFDs by both traders and buyers.

Speaking during an international meeting on tax matters yesterday, he noted that through the system, the TRA can oversee all devices and ascertain the number of receipts issued per day.

"As such, buyers should demand receipts, and traders have a responsibility to issue them. Failure to do so will result in legal tax measures being enforced," he asserted during the meeting organised in collaboration between TRA, Repoa, and IGC.

Speaking at the meeting, the Planning Commission’s executive secretary, Lawrence Mafuru, underscored the significance of such a gathering, particularly during a pivotal moment when Tanzania is formulating its new development vision.

He said no country can grow its economy if tax collection remains weak.

"We are presently implementing the five-year development plan, initiated in 2020 and slated to conclude in 2025. Among the challenges encountered during the implementation phase is the shortage of internal financial resources. A significant portion of our funding has relied on donors and foreign loans," he elaborated.

Mr Mafuru pointed out that the pace at which funds from development partners are disbursed does not always align with the pace of development growth, as these partners also have their own priorities to consider.

"So, when you effectively collect revenues, you gain greater control over the implementation of your responsibilities. Therefore, the research conducted by this institution in collaboration with TRA holds great significance for economic growth," he emphasised.

Speaking at the official opening of the Commissioner for External Finance from the ministry of Finance, Mr Rished Bade emphasised two critical aspects of tax systems.

Firstly, he highlighted the importance of scrutinising how the authority obtains various information that demonstrates tax payments. Secondly, he emphasised the necessity of ensuring that there are no gaps in the tax payment systems.

Therefore, the IGC helps to conduct research and come up with the best answers on how the country can change tax policies, expand the scope, and ensure tax collection is balanced.

For his part, the IGC executive director, Prof Jonathan Leape, said Tanzania has made progress in tax collections as various reforms have been taken.

"We are currently collaborating with TRA to empower them to leverage the data they possess. To facilitate this, we have developed a data dashboard, making it easy for them to utilise data as evidence in their decision-making processes," he explained.

He highlighted that Tanzania faces a core challenge similar to other countries in generating sufficient domestic resources to drive growth, development, and economic transformation.

Despite governments having access to ample data, many struggle with effectively utilising it to inform decision-making processes.

On the other hand, Repoa executive director Dr Donald Mmari highlighted that the meeting aims to facilitate the exchange of experiences with countries that have made progress in tax collection issues.

It also seeks to address important challenges and explore innovative approaches for resolution.

Dr Mmari emphasised that Tanzania and other African countries are in the process of growing their economies, yet tax collection remains low.

He emphasised that the meeting will brainstorm various solutions to enhance tax collection methods effectively.