Interview with Tom Philibert Tax Partner at EY Tanzania Read

[maroon7]

TanzaniaInvest had the pleasure of interviewing Tom Philibert, Tax Partner for Tanzania at Ernst & Young (EY), one of the largest professional services firm in the world with strong expertise in tax, accounting, audit and advisory.


Philibert talks about the current tax environment of Tanzania, and the importance of implementing the right tax framework to support business and investments. He also discusses the expertise of EY in the Tanzanian tax space.


TanzaniaInvest (TI): The Tanzanian tax system relies on the contribution of VAT, income tax, import duties, and excise taxes. To what extent do you consider the current tax framework to be competitive and conducive for investment?


Tom Philibert (TP): Unfortunately the tax system of Tanzania has somewhat worsened in the past years. Due to severe pressure on public finance, the Government is reacting with several fiscal measures. The complexity and lack of clarity of certain new tax rules and the tremendous focus on tax collection are often indicated by clients as factors creating concerns for the business and investment climate. companies need stable and predictable tax treatments for doing business and making investments In the first place, companies need stable and predictable tax treatments for doing business and making investments and expansions. I believe that companies do not mind paying taxes as long as the tax system is fair and reasonable, predictable and as long as there is a legal basis for these taxes. Although the need for public funds is clear, there is a limit to how much tax companies can withstand, and if this limit is breached, it might disrupt business and prevent taxpayers of making additional investments. the level of taxation for certain sectors is already quite high; for example tourism, mining, oil and gas, telecom I think the level of taxation for certain sectors is already quite high; for example tourism, mining, oil and gas, telecom. Taxation should be predictable as well, not suddenly changing the landscape. Otherwise it is impossible for investors to calculate the cost and return on investment. I believe that the Tanzanian tax system would be significantly improved if taxpayers could conclude rulings with TRA to agree and clarify the tax treatments of certain investments and transactions upfront. This would give taxpayers and investors more certainty on how certain transactions would be treated from a Tanzanian tax perspective. It would also make the job of the TRA easier, and the TRA will get more insight in the running of the companies. If this could be carefully and efficiently implemented, it would be very beneficial for the Tanzanian business and investment climate, as well as for Tanzania’s ranking on the ease-of-doing-business scale. In practice, companies in Tanzania are often faced with long audit cycles. Typically, a company files tax returns, and after a couple of years, the Tanzania Revenue Authority (TRA) reviews the returns and conducts an in-depth tax audit of the company, which is a very time-consuming process for the taxpayers and the TRA. This could put the continuance of the business in jeopardy, because companies are busy with reconstructing what has happened in the past and sometimes are faced with huge unexpected tax bills as a consequence of the tax audits that are performed. This could be partly prevented by concluding advance tax rulings.

Read more at: Interview with Tom Philibert Tax Partner at EY Tanzania - TanzaniaInvest and follow us on www.twitter.com/tanzaniainvest

 

[BONGOLALA]

TRA ni kama kituo cha Polisi,ukienda mteja unatishwa kwanza Kwa madeni hewa ya nyuma badala ya kupewa elimu Juu ya ulipaji kodi.Pia kitengo cha leseni za udereva rushwa imekithiri.Bora mambo yote yafanyike online kama ilivyo motor vehicle license.Ukienda TRA iwe ni kuchukua tuu leseni