AfricaPress-Tanzania: LOCAL manufacturers are set to breathe a sigh of relief as the government looks for a permanent solution on the long-lived issue of delays in Value-Added Tax Refund.
For some years now, stakeholders have been complaining of the delays in tax refunds resulting from VAT.
A 2018 study by the Confederation of Tanzania Industries (CTI) on the performance of the country’s industries, among others found that many manufactures were facing a serious cash-flow problem arising from huge outstanding tax claims or refunds from the Tanzania Revenue Authorities (TRA).
The CTI said yesterday that about 50bn/- was still unpaid to its members, and the government insisted that verification of claims was still ongoing before payment.
The VAT Return is the money paid back to a trader.
A taxable person will be entitled to a refund of VAT in a particular prescribed accounting period when his tax liabilities are not exhausted by allowable deductions, or where its returns for prescribed accounting periods regularly result in excess credits.
In the wake of delays in refunding, Minister in the Prime Minister’s Office (Investment), Ms Angellah Kairuki , yesterday as sured the industrialists that her docket was in talks with the Finance and Planning Ministry and TRA in finding a permanent remedy.
“We have started discussion with TRA and the finance ministry to find a permanent solution, and currently we continue paying arrears though we can’t pay all of them within a short period,” she said.
She said that the delays were mainly due to government’s procedures of verifying the authenticity of the claims “We (the government) will consider recommendations from industrialists regarding a solution to the challenge,” Ms Kairuki said after holding a meeting with leaders of the CTI in Dar es Salaam.
The minister met with the leaders to discuss ongoing efforts to improve investment environment in the country, with a view to the implementation of the blueprint launched two years ago.
She told members CTI that the government desired to see manufacturers increase production every year and improve quality of production as well.
Given the fact that there was a huge market for industrial products in the regional communities such as SADC and EAC, Tanzania’s manufacturers, therefore, have a big opportunity to sell their products.
Ms Kairuki, however, said the Tanzania Investment Centre (TIC) will submit to the CTI a list of government priorities in investments to enable the members of the confederation to invest as per the Development Vision 2025, pointing some of the areas of investment as textiles, packaging and other industries for adding value to agricultural produce.
On his part, CTI’s chairman, Subhash Patel added weight to the importance of establishing industries for value addition, saying they were ideal for creating more jobs.
