Government to pin down tax evaders

TANZANIA’s government officials at the just-ended Dar Es Salaam International Trade Fair (DITF) early this month said that national identity cards would help to identify activities of each national, or person operating in a dense commercial area like the Dar Es Salaam central business district. The officials were aiming to impose more vigilance on tax evaders by identifying new methods to find out tax evaders, the regulatory authority has indicated. National identity cards will help to bring together Government departments such as the Tanzania Revenue Authority (TRA), the Police and the Tanzania Ports Authority (TPA). "The Government through policy makers is in the process of laying strategies to identify tax evaders and other new sources of revenue collection," a Treasury official said at the fair. Of late, accounting experts have criticized the TRA for guesswork in suggesting that revenue losses will be curbed, noting that the minister’s Budget Speech presentation gave no figures for losses and what can be recovered within a year. Some experts gave their views at a seminar titled “Post Budget Critique and pre-Budget proposals for 2011/2012 Budget and VAT Regulations (Electronic Fiscal Devices) 2010” which was organized jointly by NBAA and TRA recently in Dar Es Salaam. One of them, Alfred Misana, an economist at the Treasury said that extending revenue collections to new sources was a challenge to the Government, as amendments to the laws and fresh regulations are being mapped out. According to Misana, revenue collection is likely to rise with the increase of production units in various sectors, he said, noting that the expansion of business is the key to increasing revenue collection. He also said that the agriculture sector was another area of potentially higher revenue collection if the Kilimo Kwanza initiative is a success.
Speaking at the same occasion, Viann Komba, a Tax Expert with Ernst & Young, said the Tanzanian economy still faces structural and supply limiting factors such as dependence on monsoons for rain-fed agriculture and oil prices that still pose challenges."Tanzania is over-dependent upon external financial flows. Domestic public resource mobilization by more optimal taxation is a precondition to Tanzania achieving greater economic independence. Strategies towards more effective, efficient, and fair taxation in Tanzania typically lie with broadening the existing tax base, formalization of taxable informal sector and implementation of the Kilimo Kwanza," the official noted. Domestic fiscal policy options include cracking down on fraud and evasion, reviewing tax preferences for mining companies, curbing transfer pricing techniques by multinationals and taxing extractive industries more fairly and more transparently.