Africa-Press – Tanzania. EXPERTS have attributed the record of 11.11tri/- tax collected to tax reforms and increased compliance among taxpayers during the Sixth-Phase government.
The Tanzania Revenue Authority (TRA) on the weekend announced to have collected 11.11tri/- during the first half of the current financial year in comparison to 9.24tri/- in the corresponding period in the last fiscal year, seeing an increase of 1.87tri/- .
Similarly, the analysts said promotion of the private sector investment has significantly contributed to the collection of the 2.51tri/- in December last year, which is equivalent to 109 percent of the targeted 2.29tri/- despite the devastating effects of the Covid-19 pandemic.
The December collection has been considered historic after breaking a record since the Tanzania Revenue Authority (TRA) was established.
In detail, by December 2020 the TRA had collected 2.088tr/- estimated as 101 per cent of the target that was pegged at 2.072tr/- and in the previous year, by December 2019, it had collected 1. 987 tri/- exceeding the monthly target of 1, 983 tri/- and equivalent to 100.02 per cent.
According to the experts, the improved tax collection has helped Tanzania to boost its financial muscles in financing development projects and continuing to promote self-reliance.
“If the country continues moving in the same direction it will automatically cut down budgetary dependency,” commented the experts in an exclusive interview by the Daily News.
A taxation analyst, Mr Sinda Mwita, disclosed that when President Samia Suluhu Hassan ascended to power last year, she ordered that authorities should adopt an interest-based collection approach-where mutual agreement is reached between tax collectors and taxpayers.
Mr Mwita noted that since the government opted for tax reconciliation, it increased compliance among the taxpayers.
“When the government creates a conducive business environment, it attracts more investments and the ports become more operational as the cargo handled at the port also increases,” he said.
The analyst further said the policy reforms has also resulted to a paradigm shift as now more people deposit their monies in banks, something which in re-turn makes the banks meet their financial obligations.
He also attributed the massive scale-up in revenue collection to mobile transactions levy and public-private partnership promotion, as being some of the contributing factors.
Management Consultant and Economics Researcher, Mr Joshua Mwakalikamo, supported the view that a friendly business environment being created by the government has helped to increase the volume and size of business in the country, thereby contributing to an increased tax base.
“Due to increased revenues, the government is better positioned to increase its share in the financing, especially its key development projects and other social services,” stated Mr Mwakalikamo.
On his part, an Economist and Researcher at Massa Institute of Social Sciences Research, Dr Muhajir Kachwamba, said
President Samia’s proclamation on reforming the country’s tax administration system instilled a lot of hope among the business community.
“A large chunk of taxes are being generated from trade, people are free to pay taxes and doing business has opened the doors for many to set up various business ventures…the same goes to the issue of rights and responsibilities as being emphasized by the President,” stated Dr Kachwamba.
Besides, he pointed out the fact that the government has managed to invest in e-government collection systems has reduced corruption loopholes, creating a lot of transparency in the carried out transactions.
The Economist-cum-re- searcher was also of the view that the advanced systems have helped to provide accurate information which has to be paid.
On the other hand, University of Dar es Salaam (UDSM) lecturer in economics Prof Humphrey Moshi, said the great milestone is a clear manifestation that the economy of Tanzania has started to improve amidst the Covid-19 pandemic.
The Economist stressed the need for strengthening tax compliance among the public, noting that the government should as well exhibit on the way the taxes are spent by executing projects which benefit the public.
“Private sector involvement is also crucial in identifying critical challenges which can impede compliance and immediately work on them,” he said.
He maintained that proper supervision is critical; pointing out that the government should avoid entangled in bogus contracts, unnecessary tax waivers, and trading in raw goods which could generate a lot of revenue for the country.
Prof Moshi also emphasized on the need for strengthening the country’s industrial drive to increase more investment and jobs which can accumulate increased revenues.
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