TRA CLAIMS RECORD TAX COLLECTIONS Analysts attribute it to rising inflation, falling shilling

THE Tanzania Revenue Authority (TRA) reports revenue collections amounting to Tsh2.4 trillion in the first five months of the 2011/12 financial year to November 30, 2011. This is higher than the Tsh1.993.907 trillion collected during a similar period in the 2010/11 financial year.

According to the Authority’s Principal Taxpayer Education Officer, Hamisi Lupenja, this “indicates that TRA is getting closer to the set revenue targets for the 2011/12 financial year,” which ends on June 30, 2012.

Responding in writing to Business Times on behalf of the director of Taxpayer Services & Education Department, Lupenja said the Government had planned to collect Tsh6.2 trillion from the national tax base during the ongoing financial year.

“During the first quarter of the year that ended on September 30, 2011, TRA recorded total revenue collections of Tsh1.5 trillion.”

In the event, all indications are that the Tsh3.1 trillion revenue target set for the first half of the financial year (July 1-December 31, 2011) will be realized. As it is, TRA   collected revenues to the tune of Tsh1.006 trillion in October and November last year, and projected to collect another Tsh0.5 trillion in December.

Lupenja said “this positive performance has been contributed to by improvement in TRA’s Information & Communication Technology (ICT) systems whereby, tax assessments and payments are effected on-line, through the banking and mobile telephony networks. In a way, this has increased services to customers — and, hence, much improved tax collections.

“Effective and efficient monitoring and administration of taxes through audits and enforcement procedures for taxpayers (who were lagging behind with arrears) have contributed to such success,” Lupenja added.

Furthermore, TRA has been broadening the tax base, registering more taxpayers from the informal sector of the economy. This is with a view to boosting revenue collections.

“All these measures have in principle increased the voluntary compliance level among taxpayers, and public awareness in general,” Lupenja surmises.

However, analysts who spoke to Business Times on the matter attributed the increased revenue collections to the rapidly rising rate of inflation, compounded by depreciation of the national currency against Tanzania’s major trading partners and their harder currencies, mainly the US dollar!

The analysts also cast doubt over claims that tax revenue collection performance is hunky-dory; that these are days of wine and roses, happiness and prosperity.

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Source – The Business Times

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