Can’t tax compliance and collection be a little bit scientific?

It has become the norm now every financial year in, financial year out that tax compliance and collection turns out to be unintentional punishment meted out on innocent people. Four amendments in the 2021/22 Budget speech have prompted this treatise.

So let’s dive in. The amendment of Petroleum Act CAP 392 has increased charges on every litre of kerosene by Sh100 from Sh150 to Sh250.

The reason for this increment is ostensibly to curb adulteration of petroleum products emanating from the suggested amendment of the Roads and Fuel Tolls Act CAP 220, which has increased tolls on every litre of petrol and diesel by Sh100.

But the nagging question is – who is at fault here and, above all, who bears the burden? To answer this question, one needs to honestly probe another question – who are kerosene users in Tanzania?

Apparently, kerosene users in Tanzania are poor people in both rural and urban settings, and yet these are being punished for an offence they haven’t committed, and are not even aware of.

A question worth asking here is – is punishing innocent people an effective way of curbing adulteration of petroleum products? Can’t we be a little bit more scientific?

In my opinion, we are far better than that. This amendment should be reviewed, and other means of addressing the shortfall found instead of burdening ordinary folk with something they are not even part of, let alone aware of.

Another mindboggling change is the amendment of the Urban Authorities (Rating) Act, CAP 289. The amendment requires that the collection of property tax be done through the prepaid electricity purchase system known as Luku on the grounds that every Luku meter is linked to the owner of the building or user.

It is further reiterated that property tax amounting to Sh1,000 per month for houses with one meter be deducted from monthly electricity purchases, while apartments with one Luku meter be charged property tax amounting to Sh5,000 per month.

This amendment is not only wrong, but also very unfair. It enforces compliance and collection of property tax on the wrong person. To put it mildly, it is an amendment that is not very well thought out, and falls short in many ways.

One, not all property owners use or live in them. These properties are usually rented out, and the one who is buying the electricity is the lessee, and not the lessor.

The Urban Authorities (Rating) Act, CAP 289 requires that the owner (lessor) pay property tax, and not otherwise.

This amendment contradicts the Urban Authorities (Rating) Act, CAP 289 by imposing tax on the wrong person, and in my fair opinion, it is null and void. Can’t we be a little bit more scientific? Again, we are much better than that.

Another troubling development is the amendment of the Electronic and Postal Communication Act, CAP 306, which has imposed charges ranging from Sh10 to Sh10,000 on every mobile money transaction depending on the amount. Another amendment requires that charges of between Sh10 and Sh200 be imposed on every sim card depending on the purchasing power of the user.

Ladies and gentlemen, these two amendments will undoubtedly rollback the progress we have made in last two decades in expanding financial inclusion in Tanzania.

The benefit we are longing for here is short-term, but the economy will suffer in the long run. The government should and must do away with this uncalled for and untimely amendment to sustain our progress insofar as financial inclusion is concerned.

While other economies are pounding the pavement to do away with cash payments, and we are busy erecting roadblocks, and seem intent on going back to where we were two decades ago. We are better than that.

Let’s go back to the drawing board, and do justice to our reasoning. I can write no more!