TRA set to surpass target

Dar es Salaam. The Tanzania Revenue Authority (TRA) is poised to meet its revenue collection target for the current financial year, thanks to President John Magufuli’s ongoing crackdown on tax leakages.

So far, the taxman has garnered a total of Sh8.57 trillion, which is equivalent to 99 per cent of its target of collecting Sh8.69 trillion during the first eight months of the current financial year.

This brings hope that the country’s 2015/16 revenue and expenditure plan will be implemented as approved by the National Assembly in June last year.

Going by the 2015/16 Budget, TRA is required to collect Sh12.363 trillion to partly finance the Sh22.5 trillion revenue and expenditure plan.

This means that the taxman will now be required to garner Sh3.793 trillion between this month and June to hit the target.

And it is likely the target will be surpassed, which will be a huge boost to TRA which failed to meet its revenue collection estimates for the past five years or so.

For instance, during the 2012/13 financial year, TRA was required to collect Sh8.05 trillion but the target was missed by about three per cent. Similarly, the authority missed its target of Sh10.395 trillion by a massive 10 per cent during the entire 2013/14 financial year.

It ended up collecting only Sh9.365 trillion. In the same vein, the target of collecting Sh11.178 trillion was missed by a massive 11 per cent during the 2014/15 financial year when the taxman ended up collecting just Sh9.98 trillion.

But with the new vigour in sealing all revenue leakages as demonstrated by President Magufuli, TRA is now showing signs of meeting its 2015/16 target as Tanzania moves closer to becoming a country that finances its own budget through domestic revenues.

The achievements in collection also confirm the statement by Prime Minister Kassim Majaliwa last week that Tanzania is capable of doing away with donor dependence and finance it national budget by 80 per cent from internal sources if it sustains its war against graft and tax evasion.

“We have put things in order at the Dar es Salaam Port. We have sealed the tax evasion loopholes at the port and enforced control and supervision. All required taxes for imports are being paid,” the TRA acting commissioner general Alphayo Kidata said yesterday.

Having collected a record Sh1.4 trillion in December 2015, TRA has maintained the tempo and remained above the Sh1 trillion mark in January and February.

The taxman garnered Sh1.07 trillion and Sh1.04 trillion in January and February respectively.

The collections were above targets by two per cent and 1.18 per cent for January and February 2016 respectively.

Among the measures that aid the taxman in increasing revenue collections, according to Mr Kidata, is the recent enforcement in the use of Electronic Fiscal Devices (EFDs).

He spoke of what he described a distortion on the use, importance and need to use EFDs. He said the use of the machines was a legal issue and not an option, appealing businessmen eligible for using the machine to enrol voluntarily.

“According to the tax law, doing business without EFDs is a crime. I appeal to Tanzanians with good intention towards their country not to mess up with the issue of EFDs. We are not going to enforce its use robustly,” he said.

TRA announced yesterday it has collected over

Sh800 million in fines from traders violating the use of EFDs.

The taxman is finalising the process to purchase 5,700 EFD units to be distributed to small traders.

Yesterday, Mr Kidata hinted that high level talks were going on to consider the possibility of to making TRA the sole tax and non-tax revenue collection agency in the country.

In another measure to boost collection, TRA yesterday announced it was scrapping indicative price for imports that was introduced in November last year for breaching regional and international taxation laws.

“All imports are governed by the East African Community (EAC) Customs Management Act and other international laws of which were are signatories

“In November last year, an indicative price was set for certain purposes but the fact is that it is not a legal arrangement. We have scrapped it because it is against the law. We as the government are supposed to create a situation where businesspersons have a fair and equal chance of succeeding,” he said. Importers have protested strongly against the arrangement which they termed controversial and unfair as it allows imposition of taxes based on estimates. TRA commissioner for customs and excise duties Quamdiyay Akoonay attributed the increase in collections to enhanced controls on tax leakages and proper management of exemptions accorded to religious institutions.