TRA sets 15-year collection record as target now within reach

TRA Commissioner General, Mr Alphayo Kidata. PHOTO | FILE

Summary

  • Latest statistics show that revenue collections for the 2021/22 financial year are at 97 percent of the target so far, meaning that implementation of the current Budget is likely to be relatively trouble-free

Dar es Salaam. The government could be finding it easy to implement the current Budget as revenue collections are almost in line with targets.

In one of the best performances for a period of about 15 years, data produced by Tanzania Revenue Authority (TRA) show that actual tax collections were above 97 percent of the target.

With improvement in domestic revenue collection at a time when relations between Tanzania and its development partners have improved significantly during the past one year of President Samia Suluhu Hassan’s Administration, the government’s budget implementation was currently at a rate that had rarely been witnessed in the past.

“Actual budget implementation has reached an all-time high: at an average of 93.6 percent... This is the highest budget implementation level for the government… In fact, some councils have received allocations of up to 160 percent,” the Finance and Planning minister, Dr Mwigulu Nchemba, told editors in Arusha last month.

Actual data released by TRA at the weekend show that, so far, the taxman had garnered Sh16.69 trillion during the first nine months of the current financial year: 97.3 percent of the set target of Sh17.15 trillion during the period.

This is also equivalent to a monthly average revenue collection of Sh1.854 trillion.

Going by the 2021/22 budget, TRA was required to collect Sh22.73 trillion to partly finance Tanzania’s Sh36.3-trillion revenue and expenditure plan.

With Sh16.69 trillion already garnered within nine months, the taxman is now required to collect only Sh6.04 trillion - an average of Sh2.013 trillion - per month.

If the money collected between July 2021 and March 2022 has anything to write home about, then chances of the target being met are high.

TRA collected Sh2.3 trillion in tax revenue in December 2021, a record collection in the country’s history. In March 2022, it garnered Sh2.06 trillion, which was above the set Sh1.98 trillion target.

This is probably why the TRA Commissioner General, Mr Alphayo Kidata, exudes confidence that the financial year target will be met.

“The collections were mainly with the rising willingness to pay taxes; improved relations between the Authority and taxpayers; timely resolve of issues, and the current growth of business and economic activities in the country,” he said.

Mr Kitada also said that the success in collecting tax revenues ensures the financing of government development projects, as well as improvement in the access to public services such as social, health and security services.

Prof Haji Semboja of the State University of Zanzibar also agrees that the good collections reflect the growth of economic activities - and that, eventually, this would boost the country’s gross domestic product (GDP).

“It’s a good indicator for any growing economy like ours - and, if you have improving tax collections, it sends a signal that the economy is also on a positive trend,” he said.

Prof Semboja further said that, for TRA to successfully get to near their target also means that their system of tax collection is being effective on the ground.

“As an institution, TRA means they are effectively performing, and that their systems - such as personnel, their education and awareness programmes are also working as people become more willing to voluntarily pay taxes,” said Prof Semboja.

TRA has indicated that, regardless of the success obtained in the nine months of the current fiscal year, plans are nothetheless in place to further improve collections. Some of the strategies that it plans to implement include starting to use electronic systems for the presentation of the value-added tax (VAT) from April 2022, as well as increasing the pace of clearing cargo at all entry points. Also, we will increase tax compliance, and monitor the use of electronic fiscal devices through the ‘Kamata Wote’ campaign,” said Mr Kidata.

The commissioner also expressed TRA’s mission to continue to conduct public awareness programmes through media and other channels, as well as strengthening the relations between TRA and taxpayers.