When so much is so little, the resolve becomes doubtful

I have to admit. I write when I get irked. Indeed I am after reading the Finance Act, 2022. To stress myself off, let me visualise a bit on how things were in my hypothetical world where the resolve did not care about alien ideas. The feeling in the room was that the doors to make the resolve better were tightly closed, not sure if the scream from outside was even heard or perhaps it was, but possibly thrown out of the window as irrelevant and uncalled for. Apparently in this hypothetical world for some unceremonious reasons, bluntness reigns over smartness when it comes to a widening of the dime collection net and, to put it mildly, I cannot resist the temptation to borrow words from the late Retired President Benjamin William Mkapa, “...we are concerned of the here and now in the seat I am in…” Quite frankly, dwelling in this hypothetical world is neither nice nor rosy, so let me get out of it and soberly come to a real one – The Finance Act, 2022.

Let’s dive in. In order to put it together, allow me to do three recollections of what I wrote in my earlier treatise when the Finance Act, 2022 was a work in progress. One, I did warn of not passing the road which, in my view, was an analogy of unpopular head tax. Two, I advised on how to capture sales and purchase data for all taxpayers to get a basis for a just tax assessment. Three, I advised that tax base expansion is a process and not an overnight endeavour. Unfortunately the uptake on the three was none.

What does the Finance Act, 2022 say? Section 106 of the Finance Act, 2022 requires the Commissioner General to register and issue a Taxpayer Identification Number to every Tanzanian citizen who has been registered and issued with a National Identification Number under the Registration and Identification of Persons Act, and that each issued Taxpayer Identification Number issued is connected with a National Identification Number. Section 109 of the Finance Act 2022 requires all taxpayers to file electronically tax returns on or before the due date as prescribed in the specific tax law. It further provides that the Minister may prescribe the form and manner in which the tax return shall be filed electronically and so too it puts a caveat where the Commissioner General may, by notice in writing and under special circumstances, permit a person to file a tax return manually or by any other means.

While the said provisions of the Finance Act, 2022 are set to be operational by January 2023, I have serious reservations on its practicality. Let me be clear. I did advocate the annexation of the Nida number in the tax collection processes and went even further to suggest the Nida number itself to be a TIN. What boggles my mind is how to deal with compliance and non-compliance of the said provisions. What is the basis of filing tax returns? What is the basis of the tax assessment? What will happen if there will be a high degree of non-compliance? How prepared are we to enforce these provisions? Isn’t this a slippery slope down the road of unpopular head tax? I am worried – very worried, but let’s see how it will span out after January 2023.

But wait a minute. Perhaps there is a way to get this done. Perhaps we should open doors to new ideas and thoroughly examine them. Perhaps the opinion I sent to the Parliamentary Standing Budget Committee would help. Perhaps if we slow down a little bit and embrace technology a breakthrough will definitely come to pass. Perhaps we should stop drinking water from the firehose by being bogged down on how to get money to implement the current Budget. Perhaps if we start thinking of how to double our collection in 2024 by starting to pound the pavement today towards a cashless economy it might be a game changer. Perhaps if we experiment all these ideas relentlessly science and technology will finally find a nice home in our policymaking processes.

To wrap it up, let me break the ice. It is my sole conviction that what is presumed as so much – that is the envisaged revenue collection for the fiscal year 2022/23 – is likely to be so little in my opinion – compared to what could have been collected should our revenue collection systems embrace technology leaning to cashless transactions - and thus making the Finance Act, 2022 doubtful. I can write no more.