Arusha — Tax returns from tourism, the country's leading sector in foreign exchange earnings, remain low compared with the volume of business, according to the Tanzania Revenue Authority (TRA).
This is due to a big number of unregistered potential taxpayers in the industry while many others fail to file tax returns and pay their dues in time.
"The challenge of improper record keeping is still big in this sector," said the TRA Commissioner General, Mr Charles Kicheere, here yesterday.
The situation has been compounded by one of the biggest challenges facing tax administration in the country; failure of taxpayers to acquire and properly use the Electronic Fiscal Devices (EFDs).
Despite leading in foreign exchange earnings, tourism is one of the fastest growing sectors in the country's economy, registering a 14.3 per cent growth in the 12 months to February, this year, during which it generated $ 2.4 billion.
During the 12 months which ended in February last year, some $ 2.1bn was earned. Revenue earnings rose in tandem with the number of visitors who rose to 1.3 million from 1.2 million in 2016 and 1.1 million in 2015.
Mr Kicheere revealed this when opening a five-day consultative seminar between the taxman and various stakeholders in the sector, who included hoteliers, tour firms,tour guides, conservation agencies to mention but a few.
While acknowledging the role of tourism in the national economy, the TRA boss regretted that tax administration in the sector was wanting, calling for improvement to ensure that all businesses remit taxes.
"It is important for all of us to understand that tourism is crucial in our economy, thus the existence of sound tax laws, regulations and procedures is critical for sustainable growth and development of the sector," he said.
He could not give figures of the tax revenues shortfalls from the sector, which, according to him,now contributes largely in the growth of the country's economy.
Mr Kicheere further revealed that TRA was planning to open tax consulting bureaux in all regions in order to easily handle complaints and queries from the taxpayers.
"Once the bureaux are in place, we will certainly improve our outreach to taxpayers as well as potential ones," he explained.
The opening of the bureaux or tax services centres were among the tax administration reforms aimed at making it easy for the taxpayers to fulfil their tax obligations.
"In the near future, we will open tax service centres in all regions, which will be specific for handling taxpayers' enquiries and complaints," he pointed out.
The proposed centres would not only boost taxpayers education and customer service,but also improve the level of tax compliance while promoting growth and development of taxpayers' businesses.
The acting director of tourism in the ministry of Natural Resources and Tourism, Mr Deogratius Mdamu, admitted that domestic revenue collection could have been higher in the sector given a range of taxes charged on tourism businesses.
The executive secretary of Tanzania Confederation of Tourism (TCT), Mr Richard Rugimbana said the forum was the first face-to-face meeting between TRA and the key players in the tourism sector to discuss taxation matters.