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"We know that Tanzania's economy is growing faster than most other countries in the East African Community and we hope to achieve Sh19 trillion by the 2017/2018 financial years" RISHED BADE, TRA COMMISSIONER GENERAL
By Samuel Kamndaya,The Citizen Reporter
Posted Wednesday, March 18 2015 at 08:35
In Summary
- TRA boss wants you, the taxpayer, to fully fund the national budget in next five years–but only on condition that the government plays its part too.
- Taxman says the Budget can be financed through internal revenue if the government plays its part too and reduces lavish spending, which has dominated financial discussions in the nation in the past decade
Dar es Salaam. The Tanzania Revenue Authority (TRA) top boss wants you, the taxpayer, to fully fund the national budget in next five years--but only on condition that the government plays its part too and reduces lavish spending, which has dominated financial discussions in the nation in the past decade.
And that's not all. According to the chief taxman, the government should also reduce external borrowing, which has ballooned in recent years. Consider the four-wheel drive fuel guzzlers which rule Tanzania's roads at a cost of roughly $200,000 each. There are plenty of them on show, despite the government's pledge four years that it would do away with the luxury Toyotas.
And then there is the $800 million set aside during the national budget simply to pay allowances and per diems. Now reflect on how much foreign trips by various leaders cost the nation. And how much corruption costs the economy,
But TRA Commissioner-General Rished Bade says Tanzania is capable of financing its entire budget through funds sourced right here at home in the next five years, raising hope that East Africa's second largest economy is on the right path to economic independence.
He told The Citizen in an exclusive interview in his office yesterday that, going by the trend of Tanzania's economic growth, TRA should be in a position to garner enough revenue to support the entire budget. "In five years, we should be able to do that," the former Barclays Bank Tanzania managing director told The Citizen.
But to achieve this, Tanzania needs to slow down on budget expansion by reducing spending and foreign non-concessional loans. "This is what we want--that our budget be financed by internal resources by 100 per cent," he said.
The Citizen understands that TRA is working on a project to reach out to businesses that are either informal or moderately informal so they can be formalised and start contributing significantly to government revenues.
TRA is also working on initiatives to simplify the tax payment process using new systems that are interactive and connected to taxpayers--the most notable one being the introduction of Tanzania Customs Integrated System (Tancis). With Tancis, import taxes are paid on time.
Mr Bade, who started his career in 1995 with the Bank of Tanzania, added: "After Tancis, we will introduce a more robust integrated domestic revenue administration system that will be more user-friendly. It is expected to simplify submission of returns. It will change the way taxpayers communicate with TRA and provide timely information on defaulters for intervention."
Through both grants and concessionary loans, donors account for 15 per cent of Tanzania's 2014/15 fiscal budget. The rest is taken care of by domestic revenues--both tax and non-tax--as well as non-concessional loans from both local and foreign sources.
TRA is banking on electronic fiscal devices to rope more of the country's 46 million people into the tax bracket. National identity cards will also help the taxman reach a much wider population for tax collection purposes.
Going by the 2014/2015 budget, TRA is required to collect a total of Sh11.297 trillion to help finance a Sh19.8 trillion revenue and expenditure plan. In the first six months, the taxman garnered about Sh5 trillion in December alone, with TRA collecting a record Sh1.056 trillion.
If the current budget is anything to go by, TRA will be required to collect not less than Sh19 trillion come 2020, a development that the chief tax collector considers attainable if the country's economic growth and growth in tax collection goes according to plan.
He added: "We have to set big targets to transform Tanzania. We know that Tanzania's economy is growing faster than most other countries in the East African Community and we hope to achieve Sh19 trillion by the 2017/2018 financial years."
The TRA's Fourth Five-year Corporate Plan, which spans the 2013/14 and 2017/18 fiscal years, has set a Sh19 trillion target.
In line with ongoing economic growth prospects, the plan envisages that agriculture will grow by five per cent while the manufacturing sector is targeted to expand by 14.5 per cent. Services, transport, communications, finance and real estate sectors will also grow beyond current levels.
Yesterday's exclusive interview with Mr Bade dwelt on issues such as tax collection against targets, tax exemptions, the money that the taxman collected from beneficiaries of the infamous Tegeta Escrow Account, tax collected from mining firms and property tax.
TRA collected a total of Sh353 billion as Corporation Tax from six mining firms between the 2011/2012 and 2013/2014 financial years, according to Mr Bade. He did not name the mining companies, though.
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