14 November 2012

Tanzania: Tax Waivers Dip Tanzania Earnings

Dar es Salaam — The Tanzania Revenue Authority (TRA) has asked government to act critically on tax exemptions because it is reducing their revenue collections.

TRA Board Chairman Mr. Bernard Mchomvu said during the 6th taxpayers' day where three corporate taxpayers emerged overall winners out of 562 companies.

Mchomvu said studies that have been carried out by tax experts show consumers are not benefitting from the tax exemptions because the prices of commodities have remained higher.

"The government should act critically on this area because massive revenues were falling into the hands of few business persons. There is sugar and rice prices that have remained high despite the granted tax exemptions," Mchomvu said.

Apart from tax exemptions Mchomvu cited port inefficiencies and animal poaching as some of the other hurdles affecting the tax body to hit their revenue targets.

Reacting to the concerns, the Finance and Economic Minister Dr William Mgimwa said the revenue collections for September put a record in the history despite the challenges like port inefficiencies particularly in cargo handling.

Apart from the construction of the berths 13 and 14, Dr Mgimwa said talks with development partners aimed at improving port efficiencies have reached advanced stages.

"It calls to an end to complaints from most business people who would like to have better services out of the taxes paid."

Dr Mgimwa said the government was currently revising the tax exemption regulations to ensure that they lead to increased productivity instead of hindering efforts to bolster revenue collections.

"Regulations pertaining to tax exemptions which are inefficient will be amended soon to ensure smooth execution of the TRA obligations," he said.

For example, total government revenues for the month of September have increased to Tsh754bn, higher than all the past monthly collections done by the TRA, with three large corporate taxpayers emerging best compliant and contributors of the year.

Among the three corporate taxpayers recognized during the taxpayers day, the National Microfinance Bank Tanzania Limited (NMB) emerged most compliant and contributor at national level and was awarded certificate of merit organized by TRA last week.

TRA is charged with the responsibility of managing the assessment, collection and accounting of all central government revenue.

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