10 October 2017

Tanzania: TRA Denies Reports of Sharp Drop in Collection

Dar es Salaam — Tanzania Revenue Authority (TRA) has denied reports that it has stopped publishing monthly revenue statistics after collection dropped sharply.

Revenue statistics were last updated for June, prompting speculation that monthly collection, which was consistently above Sh1 trillion since early 2016, had crashed.

TRA said everything was on right track, adding that it would announce the latest figures any time this week.

Kigoma Urban MP Zitto Kabwe said on his Facebook page on Saturday that less than Sh600 billion was collected in July and August even as the public servants' wage bill stood at Sh570 billion per month. He blamed the drop in domestic revenue on a tough business environment in the country and "massive" layoffs.

"We have of late witnessed companies retrenching workers and others closing down. The government itself slashed the number of public servants, saying it was getting rid of ghost workers and employees possessing fake certificates. This affected income tax, especially Pay As You Earn (PAYE) which contributed Sh3 trillion to government coffers in 2016/17," Mr Kabwe said.

"The government must review the way it operates to create conducive environment for business and investment. Otherwise it will be forced to borrow to pay its workers."

However, TRA director for taxpayer services and education Richard Kayombo refuted claims that the agency had stopped publishing monthly collection figures because collection was now embarrassingly low. He said TRA normally published the results on a quarterly basis, and not every month as claimed.

"The public should be patient as we will be publish our statistics before the end of this week," Mr Kayombo said, adding that data was normally released from the 10th of the month following the end of a quarterly period.

TRA last released an update in July when it announced that Sh14.4 trillion was collected July 2016 and June 2017 against its target of Sh15.1 trillion. TRA's target for this financial year is Sh17.1 trillion. Collection for June was Sh1.39 trillion, according to TRA statistics.

Prof Haji Semboja of the University of Dar es Salaam said he could not trust Mr Kabwe's statistics because they were not official but mere speculation. He said that the current global trend showed that economic activities had stagnated and Tanzania was no exception.

"We are currently experiencing income and wealth constraints...a lot of economic activities have been affected," Prof Semboja said.

In view of this, he added, government institutions should recognise the importance of sharing their findings, whether bad or good, with the public so that solutions could be sought for the good of the country.

Prof Semboja also expressed his surprise at TRA's assertion that it had been issuing its reports on a quarterly basis.

"I was reading them every month until TRA suddenly stopped issuing them a few months ago," he said.

When the current government started taking measures to mop out excessive liquidity, cub tax evasions and control government expenditure, some businesses were shaken and other employers start to cut their workforces in response to the biting economic situation.

For instance, the changing business and economic environment forced low-cost airline Fastjet to review its operations and layoff 41 workers last year.

In November 2016, Sao Hill Industries also announced it was cutting hundreds of jobs after recording a Sh8 billion loss during the previous year.

The firm also said it was closing down the Lindi Forestry subsidiary and moves its headquarters from London to Dar es Salaam as part of a survival strategy.

In January this year, at least the three major mobile phone firms announced that they would retrench several of their employees as they aligned their operations with a directive to float 25 per cent of their shares to the public through Initial Public Offerings (IPOs)

Tanzania Distilleries Limited (TDL)- a subsidiary of Tanzania Breweries Limited (TBL) Group- joined into a list of companies that were laying off staff to mitigate the impact of a changing business environment in March with reports indicating that even its parent firm retrenched some workers.

Treading in the same space as TDL, a city investor decided to put up for sale his six-month old $20 million (Sh45 billion) investment for production of spirits earlier this month.

Recently, Bulyanhulu Gold Mine which is owned by Acacia Mining cut 1,200 direct jobs and 800 indirect jobs that are said giving the commercial banks hard times to collect about Sh30 billion the sacked employees borrowed.

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