Go digital and double revenue, govt urged

The use of electronic receipts in the non-tax government collection would generate a whopping Sh700 billion for the Treasury, Mr Zitto Kabwe (pictured), the chairman of the Public Accounts Committee (PAC), has said.

Currently, half of the revenue collected by various government ministries and departments in non-tax collections does not even reach the Treasury due to widespread doctoring of receipts, corruption and outright theft.

But electronic receipting would change all that and increase revenue for the government whose dependence on foreign aid to fund the national budget is still significant. 

In the past seven years, for example, the government received $5 billion (Sh8 trillion) from donors through the general budget support. If electronic receipting is fully adopted, the government would collect Sh5 trillion additional revenue in the next seven years, according to calculations done by The Citizen.

Electronic receipting has already increased the collection of the Value Added Tax (VAT) by 60 per cent from an annual average of Sh500 billion to Sh800 billion.

MPs have resolved to push for the introduction of electronic receipt to increase government revenue.

This was one of the resolutions reached at a week-long seminar in Bagamoyo that brought together three parliamentary committees- Public Accounts Committee, Local Authorities Accounts Committee, and Budget Committee that oversee public finances and the Controller and Auditor General (CAG).

“We hereby urge the government to immediately start collecting revenue from the central and local government sources using electronic devices,” says the statement.

This will seal the loopholes currently being exploited by crooked officials to steal using the paper receipts,” a statement released at the end of the seminar notes.

The MPs also advised the government to purchase goods and services only from suppliers that use electronic devices to pay tax.

In a separate statement, Mr Kabwe said that if electronic devices were to be put in use, government revenue would double.

“I have gone through Volume I of the 2013/14 Budget book on financial statement and revenue estimates and found out that more than Sh1 trillion is expected from various ministries and local governments. However, if electronic receipts would be used, the revenue would double,” Mr Kabwe noted.

The 2013/14 Budget requires Sh18.2 trillion to fund recurrent and development expenditures.
Source: The Citizen, reported from Dar es Salaam, Tanzania
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