SMEs contribute less to revenue, says Taxman

Despite the fact that Small and Medium Enterprises (SMEs) account for 61 per cent of the taxpayer population, they generate less than 2 per cent of total domestic revenue, it has been said.

Speaking during the CEO Roundtable meeting, the TRA commissioner general, Mr Harry Kitillya, said his authority is putting in place measures to ensure that Tanzanians pay tax according to their income.

“Presumptive taxation is the most appropriate method of tax administration for specific small business due to inability to comply with complicated tax statutes,” said Mr Kitillya.

He said that TRA is implementing the Block Management System (BMS) that has seen tax officers from compliance and enforcement sections being allocated to register all traders within the blocks and collect all taxes and manage tax debts.

“We expect to benefit more from the enhanced identification of persons that the National IDs will embed,” he said.

He, however, told CEOs that the use of electronic fiscal devices is unavoidable by all targeted traders and that in the near future every business will be entitled to paying tax.

“The introduction of EFDs to some traders is the second phase of ensuring that everyone pays tax, later on we will put in place a strategy that will see small businesses which are currently not included in the VAT paying taxes,” said Mr Kitillya.

He said that the same EFDs may be used in the near future to tax small businesses like food vendors, hawkers and Machingas or other machines can be introduced.

“We will ensure that everyone pays tax in this country for the betterment of businesses and the country’s economic development,” he said.

He said that small business taxation is instrumental to facilitate MSEs’ participation in the formal economy

Mr Kitillya assured the private sector that the authority ensures there is a workable partnership between the two so as to facilitate good revenue administration.

“I assure you that 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 most valued,” he said.

He however urged Tanzanians to read different literatures so as to match with technology changes.

“I am surprised that every time the government introduces taxes people lament that they were not educated enough, I am wondering how the same people manage to obtain visas to travel to different countries to purchase goods without been educated?” asked Mr Kitillya.

On his part the CEO roundtable Chairman Ali Mufuruki said that it is time for MSEs to be tax compliant.

“No one is entitled to paying tax for others, it is key that everyone who can pay tax must do so, I am surprised when traders boycott to use EFDs while the paid VAT does not come from their pockets but from consumers,” said Mr Mufuruki.
Sources: The Citizen, reported by Veneranda Sumila from Dar es Salaam, Tanzania
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