In a bid to enhance tax compliance including the culture of demanding receipts on purchase of goods, the Tanzania Revenue Authority (TRA) plans to introduce prizes.
TRA’s Principal Taxpayer Service Officer, Rose Mahendeka, said at a seminar on new tax laws to Tanzania Tax Writers Network (TAWNET) organised by Vodacom in Dar es Salaam that the culture of asking for receipts after buying various goods will put a check on revenue loss. She said the practice will not only boost revenue collection but curb leakages by some traders in dodging tax.
“To participate in the draw, buyers will have to send special numbers on the receipts and win various prizes she said. The government collects over TSh. 800bn/- monthly, but the current efforts will boost further the collections.
She said many buyers do not know the importance of receipts for the goods they purchase, saying receipts help keep good records of financial transactions during audit exercise.
TRA principal tax payers’ education officer Hamis Lupenja said the new Value Added Tax (VAT) law will provide and expand tax collection scope.
Some of the weaknesses of the old VAT law were the powers given to the Finance Minister to provide tax exemptions that at most time was misused leading to decreased revenue collection.
Also the introduction of electronic fiscal device system has simplified and boosted efficiency in collection of tax payments. Further improvement in technology use is set to boost further collections as more traders acquire and use the Electronic Fiscal Devices (EFD means electronic fiscal devices).
.This move has been triggered by the fact that the tax payer is the main player in mobilizing revenue for the governments of the United Republic of Tanzania
Small and medium size entrepreneurs contribute greatly to the Government efforts towards economic growth and poverty eradication under MKUKUTA, for Mainland Tanzania.
It is therefore important for TRA to observe its rule and make sure there is no any discrepancies in revenue collection and provide motivation to the tax payers to boost the development of trade in the country, he said.
We are trying harmonize tax rates and reduce the number of levies charged by tax administrators so that our customer feel a little burdened with the with tax paying tax so as to motivate many SMEs to be able to pay tax without a problem.
“We must keep in mind that our development will not be made by foreigners. We as Tanzanians can contribute directly to national income so that we can improve development level as a nation as long as we observe ethics and working principles,” he said.
There are Several important recommendations that have been given by the business community that will enable the harmonization to be done efficiently, he said, pointing at four key issues which were important for TRA to take into consideration.
These he said include the need to improve the tax collection system, to stop bureaucracy that complicated complaints and hinders many taxpayers to pay tax promptly, and improving service rendering via the internet.
Other issues that hinder compliance are high tax rates and presumed benefits of compliance, which is reflected in improved infrastructures such as roads, hospital services and schools, he said.
Despite various challenges in collecting taxes, administrators should also administer the law which pinches the taxpayers to do so, he said.
To enhance that we have had a six-month training to our staff before they officially start doing their works in order to improve efficiency of our workers toward our customers who pays tax to TRA.
He said it is designed to equip the new employees with knowledge on how to collect more revenues and to better handle ethical matters that will attract people to work more in the country and pay their tax fairly.
He emphasized that collecting the country’s revenue is a huge task that needs people who are competitive and ethical so that no one feel wronged and hence attribute development to the country economy.
He pointed out that the authority pays its employees a ‘nice package’ to prevent them from such practices but they still indulge in corrupt practices; “some employees are corrupt due to low salaries but in case of the tax collection body, the issue is different,” he said.
TRA Commissioner General Rished Bade said despite the success that TRA has managed to register, the authority still faces challenge especially in service delivery which he said hinders efforts to boost the national income.
He said among issues that need to be tackled is Electronic Fiscal Devices (EFD) challenges, as this will ensure each taxpayer and general public is contributing directly or indirectly to government coffers on the basis of the business they conduct.
“Taxpayers and the general public play a superlative role in the process of contributing to the government by tax law so as to empower the government to provide social services,” he said.
he said that on the basis of efforts to improve tax collection the government plans to collect Sh11.9 trillion in revenue during financial year 2014/2015 , an increase of 21 percent compared with 2013/2014 collections.
“This target is set by focusing on the growth of the economy as TRA is in the second year of implementation of the five-year strategic plan which was established to simplify tax collection and introduce new sources of revenue,” he said.
TRA is in a plan to increase revenue to GDP ratio to 19.9 percent by the year 2018 through the implementation of the fourth corporate plan, he declared.
“We are committed to creating a workable partnership with the private sector in revenue administration and your inputs towards achieving this commitment together are most welcome and valued,” he told the gathering.
By Theresia Rugemalila