- Kariakoo Traders from Tanzania are striking against higher taxes heaped on them by the authorities.
- The government has however assured the traders on the safety of their property.
- Unlike tear gas and fights in neighbouring Kenya that have caught global attention, Tanzania’s strike is rather less chaotic.
“No more taxes and the strike is the only apparatus we have to get what we want and the way forward” says Frank, a merchant and trader in the Tanzania’s open market pulse, Karikoo. Frank and like most of his peers, often young people, who invested significantly in stores that charge over $220 rent per month – is forced to see his investment wither by the day, as tax revolt intensifies.
Thanks to social media, the traders circulated a message on June 22, 2024 that directs all traders in Kariakoo to close their businesses, including their shops, offices and any other activities starting from Monday, June 2024, indefinitely.
Tanzania, as it appears, did not have to look far for examples. At the moment, Kenya is on fire as a Generation Z-led tax revolt sweeps across the country, with the youth demanding rejection of Financial Bill 2024, a set of tax measures that are likely to make difficult an already unbearable life.
Tanzanians are equally burdened with the cost of living worsening by the day. The Kariokoo traders in Tanzania declared an indefinite strike beginning Monday, June 24, 2024 until all their business woes are addressed accordingly. Simultaneously, traders in Mbeya, Iringa, Mwanza, Arusha, Ruvuma, Kagera and Rukwa region have joined the nationall rally are reports indicate they will be closing their business from June 25, 2024, Kariakoo Traders Association chairman, Martin Mbwana, said.
Read Also: Social Media Amplifies Kenya’s Gen Z Revolt Against Tax Increases
Too Much Taxes
In a bid to optimise tax collections, in 2022 the Tanzania Revenue Authority came up with a new campaign to intensify revenue collection in Kariakoo during the end of the year festive season. Regardless of the size of business, anyone in the Kariakoo trading area had to be given the Taxpayer Identification Number (TIN), a process that featured the use of Electronic Fiscal Devices (EFDs). This undertaking by the taxman has occasioned resistance from the trades.
According to The Citizen, the Kariakoo traders say that Tanzania Revenue Authority has been harassing them by deploying a task force that seizes goods under the pretext of verifying their value despite the presence of both street vendors and legitimate traders in business areas like Kariakoo. On the other end, the government sentiments towards the strike seemed to be less helpful as critics and pundits find it disparaging.
“The Country can’t be led by strikes” says Dar es Salaam Regional Commissioner (RC), Albert Chalamila, before thousands of Kariakoo traders on the strike eve.
Despite the statement being a little hostile, the RC urged the traders to close their shops as the government continues to work on their challenges. The RC added a cherry on top, saying the government will protect their investments during the strike.
The traders have been crying out loud on grievances piling up for years. The traders chief pointed out how Tanzania Revenue Authority fails to distinguish between street vendors and legitimate traders, leading to harassment of innocent actors.
“Now, when someone comes from abroad or other regions their goods are seized, claiming that the receipt value is too low, even though they sometimes buy from street vendors or shops” the Traders chief told The Citizen.
Further down the aisle, the trader’s chief highlighted that,” we had previously met with the Tanzania Revenue Authority and requested these issues be addressed, but we see that they continue oppressing and hurting traders”.
Contrary to Karikoo Traders chief, Tanzania Revenue Authority acting director for taxpayer education and communication, Hudson Kamoga said, “We don’t know what the complaints are about. We have not received any information on what the complains pertain to address them.”
TRA Revenue collection ambition
Over the past seven years, the Tanzanian government ambition to collect tax became the new normal as records breaking numbers took the nation by storm.
According to figures by Tanzania Revenue Authority, the authority exceeded its revenue collection targets in the first quarter of the 2023/24 fiscal year, collecting a staggering $2.497 billion a 97.5 percent of the set target of $2.57 billion,
The success as illustrated by Tanzania Revenue Authority commissioner Alphayo Kidata was attributed the increase to a range of factors, including economic growth, technology adoption, and public awareness campaigns conducted by the revenue authority.
On the same note, in December 2022, the Tanzania Revenue Authority recorded $1.051 billion a higher amount gathered since the authority was established in 1996.
In all performance terms, the Tanzania Revenue Authority intentions to achieve its goals are undoubtedly vivid and sound, but the methodologies are questionable.
The current traders strike brings a chilling question as to whether the latter is an irony to what the Tanzanian government sees to be a bright taxing future.
Read Also: Nation on edge: Kenyans protest against President Ruto’s tax hikes
Taxing systems and finance bill
The government is preparing a single system for collecting taxes, levies and fees related to businesses as part of the ways to reduce trade barriers and improve the local business environment.
According to a statement issued by the ministry, businesses are currently supposed to pay the levies, taxes and fees for different government institutions, which include the Tanzania Revenue Authority and municipal councils, among many others that have been proving cumbersome and expensive for the businesses.
Dr Kijaji said the single collection system under preparations will grant the business operators to pay one amount that includes taxes, fees and levies for all the institutions that will later be given their shares from the consolidated fund.
According to Dr Kijaji, the nation’s business community has been complaining about multiple taxes for a long time as a factor for the collapse many businesses.
“We have already heard the complaints and the government continues with discussions to establish a single system for tax collection in one basket. Each institution will get its share and thus reduce the inconveniences,” she said.
On the other end the finance bill of Tanzania is an intriguing web of complexities. Same as the Kenya’s #2.7 billion in taxes increment bill, the Tanzanian one is a face of ambiguity.
In 2022 levies were imposed on mobile money transcations forcing after massive public uproar. The situation compelled Tanzania’s President Samia Suluhu to intervene and the Finance Act 2022 amended the National Payment Systems Act – from chargeable levy of $2.66 to $1.52.
“Kariakoo serves a wide pool of customers across East Africa. They bear foreign currencies – a better exchange for me and the government Tanzania Revenue Authority. The strikes rob us of earning, both of us (Tanzania Revenue Authority and traders), going on two-day strike is loss, but we have to do what we have to do” elaborated Said, whose iPhone dealing business is on lockdown.
