Monday, April 28, 2014

TRA in negotiation with agencies over EFDs

The government through Tanzania Revenue Authority (TRA) has embarked on the second phase training programme on education to business people in the country on the basic use of the Electronic Tax Register (ETR). The device that is principally used by retail business that issue receipts manually is among the three electronic fiscal devices (EFDs) which the government had introduced in recent years to targeted individual enterprises and companies doing businesses in the country. The machines have been designed for use in business for efficient management controls in areas of sales analysis and stock control system to facilitate revenue collection and which conforms to the requirements specified by the laws. TRA’S Director for Taxpayer Services and Education Richard Kayombo said in Dar es Salaam that, the move is to create awareness the importance of the EFDs to the general public especially among business groups from village level to regional level through district councils. He said during an exclusive interview on Wednesday this week that, the government does the work through seminars which currently is being conducted in various parts in the country, adding that, it is a continuous program through block management system which is being targeted mostly to various community groups. In another development, Kayombo noted that, the government is currently negotiating with 11 companies which it had offered a legal tender to distribute s the devices countrywide with a view to reduce their price costs. He said that, a team of technical experts from TRA is currently in negotiations with the distributing agencies to discuss the cost of components so as to review the current price cost of Sh. 900,000 and make them saleable at least between Sh. 600,000 and Sh. 690,000 respectively. He said once the price rates are attained, still buyers of these machines would buy them by installments on agreed terms of payments therein, or they might acquire loan facilities from the financial institutions to settle down their payments. The government has decided to make affordable price rates for such devices to quench the thirst of those individual traders who staged a demonstration to boycott the use of such devices in some parts of the country after having complained of their high costs. In early November this year, business came to a standstill at Dar es Salaam’s Kariakoo main shopping market for both retrial and whole sale commodities as traders closed their stores protesting the use of Electronic Fiscal Devices (EFDs). The government’s call has come hardly after four days when President Jakaya Kikwete issued a directive to individual traders in the country and insisted that, there is no way the government would avoid the use of such EFDs in the country. He called on stakeholders and TRA officials in the country to make sure that are settling the matter and if possible negotiate on prices to reach a consensus. Kikwete made a plea on Monday this week in his tour visit in Babati district. In his speech, Kikwete underscored the importance of the EFDs and noted that have started to be used in various parts in the world and that Tanzania would never resist from using them and yet has already introduced them. He said the government would not revert manual handling of receipts issuing as this system denies government correct amount of taxes to be collected from expected business people who shun away the use of EFDs which would determine the correct taxes induced for them. The electronic use of EFDs which involves Electronic Tax Register (ETR) Electronic Signature Device (ESD) and Electronic Fiscal Printer (EFP). The three EFD machines have been designed for use in business for efficient management controls in areas of sales analysis. They started effectively in 2010 to business people in the country with the first phase introduced to those business people registered with Value Added Tax (VAT). The second phase currently in move has targeted business people who are not registered with VAT. According to TRA, the Machingas are exempted as they do not have permanent places to conduct their businesses. However, the targeted groups are those with whole sale shops, supermarkets, shops selling motor spare parts and mobile phone shops. Others are bigger business entities such as Textile shops, Hotels, bars, photo studios, take away food stores, motorcycle sellers, and motor vehicles sellers and many others of such types. Statistics made available by TRA, only 200,000 business people and their entities out of estimated 1.5 million entities, have been registered for VAT.

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