TRA monthly tax collection nears 1tr/-

The Tanzania Revenue Authority (TRA) collected a record 885.9bn/- in December 2012, beating September’s 754bn/- collection and bringing a ray of hope that the country’s fiscal independence could be just around the corner.

The December collection was 105.7 per cent of the targeted tax revenue of 838.05bn/- for the month and 30 per cent more than what the taxman garnered in a similar month in 2011, according to TRA figures.

Tanzania’s 2012/13 Sh15.12 trillion budget requires the country to raise domestically a staggering 8.7tr/- in tax and non-tax revenues.

The government expects to receive grants and concessional loans to the tune of 3.157tr/- and some 2.314tr/- in grants and loans for development programmes including basket funds and Millennium Challenge Account (MCA) funds.

The 885.9bn/- TRA collected in December is more than the 842.5bn/- that the country expects to receive in budget aid from its 12 General Budget Support partners during the current financial year.

It is also the first time that the taxman has exceeded its target in the first half of the current financial year, with collections for July, August, September, October and December falling short of the target by about six per cent.

TRA attributes its good December performance to upward amendments for corporate tax and increase in transactions that attract stamp duties and withholding taxes.

A decline in tax exemptions was also instrumental in improving collections in the customs and excise department, according to the taxman’s tax revenue report for December, 2012 as seen by The Citizen.

“The over-performance of the large taxpayers is attributed to an upward amendment for corporate tax as done to Geita Gold Mine and an increase in transactions attracting stamp duty and withholding taxes like rental charges. The good performance of the customs and excise was associated to decline of exemptions and collection of export levy from exported cashew nuts that commenced in December 2012,” the report reads.

Tax exemptions, says the taxman, declined to 71.8bn/- in December from 81.6bn/- recorded in November 2012 as well as 76.2bn/- recorded in December 2011.

TRA tax revenue report for December indicates that large taxpayers collected 480.3bn/-, equivalent to 111.1 per cent against the target of 432bn/- while the Customs and Excise department collected 267.9bn/- equivalent to 100.1 per cent of the targeted 267.7bn/-.

The Domestic Revenue Department collected 137.9bn/- or 99.7 per cent against the target of 138.4bn/-.

TRA says the domestic revenue was pushed up by exerted efforts and close supervision by its management on enforcement exercise on Electronic Fiscal Devices (EFD), Real Estate and Other Taxes. There is also an ongoing office inspection on implementation of debt management and enforcement procedures aiming to ensure all tax assessed is collected.

However, experts say there is nothing surprising when TRA exceeds collection targets, noting that the revenue body might have under-estimated the tax collection projections.

“There are three issues here: Possibly, there were unpaid dues by some large taxpayers who complied in December. It might also be the result of controlled tax evasions or that the taxman under-estimated the tax collection to create artificial surplus for a positive public image,” said Dr Semboja Haji, a lecturer in Economics at the University of Dar es Salaam.

He noted, however, that there were a lot of areas of imports and exports where tax is not collected.

Dr Semboja said that even if TRA continues to exceed collection targets like it did last month, Tanzania won’t be independent from donor support any soon.

“The donor aspect is somewhat complicated and will always be there….both Tanzania and its donors depend on each….to donors, their funds are a way of showing the world that they are among super powers.At the same time, their funds enables them to sustain their ready-found markets in our country. Japan, for instance, is involved in infrastructure development support in the country and at the same time, Tanzania is one of the best market for Toyota vehicles,” he observed.

It is a wait-and-see now if the trend of exceeding revenue collection target will be experienced this month as the target for January 2013 is about 613bn/-.
The last time that the TRA surpassed its tax revenue target was in June 2012 when some 753.3bn/- was collected, being 22.3 per cent higher than the goal.
Source: The Citizen,, reported by Alawi Masare in Dar es Salaam

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