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| Mr Kiula |
Tanzania Revenue Authority (TRA) plans
to extend the uses of Electronic Fiscal Devices (EFDs) to Value Added
Tax (VAT) non registered traders.
A government’s letter of intent to the
International Monetary Fund (IMF), the extension of EFDs to non VAT
traders is one of the steps taken to strengthen tax administration.
“TRA will further strengthen its audit,
enforcement and valuation capacities,” indicates the letter signed by
Bank of Tanzania (BoT) governor and Finance and Economic Affairs
Minister, noting that IT systems within TRA will as well be enhanced.
The letter to IMF’s Managing Director
and seen by the ‘Daily News,’ however, did not specify the time frame
for the official introduction of the devices in the market.
TRA’s Acting Director of Taxpayer
Services and Education, Allan Kiula,said in Dar es Salaam over the
weekend that once the project is ready would be communicated to the
public, “We will let you (press) know once everything is ready…be
patient because plans are underway.”
Strengthening of the tax administration
includes implementation of a single window system for customs
administration and an e-tax revenue system for domestic revenue
administration.“It will also improve the management of tax exemptions by
scrutinizing applications and conducting risk based audits of
beneficiaries,” said the letter.
EFDs for non-VAT will be complimented by
the National Identification Cards (IDs) that are being introduced in
the country starting with Dar es Salaam city. The IDs are geared to help
expand tax coverage of the informal sector. “These combined measures
are projected to have a revenue yield of 0.3 per cent of GDP,” the
document to Breton Wood institute said.
Revenue collections are projected to
increase by one percentage point of GDP in 2012/13, driven by higher tax
collections. The increased yields reflect favourable economic growth,
continuing steps to strengthen tax administration and tax policy
measures included in the 2012/13 budget.
Tax revenues were buoyant in the first
nine months of 2011/12, supported by strong economic growth and
administrative measures taken by the TRA.
A study named 'Informal Sector
Taxation’ and conducted by Economic and Social Research Foundation
(ESRF) last year shows that despite employing over 70 per cent of the
country's workforce, the informal sector remains untaxed.
The study, taking Dar es Salaam region
as the sample size, indicates that revenue lost amounts to between 35 to
55 per cent of the potential tax revenues.
The areas which are
generating handsome turnover but not paying revenue include business
proprietors in informal sectors such as housing, transport and
consultancies that make fortunes without paying a cent to the government
coffers. The informal sector in Tanzania accounts for about 40 per cent
of GDP.
Source: The Daily News,www.dailynews.co.tz, reported by Abduel Elinaza
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