Wednesday, January 10, 2018

Banks and telecom companies put in tension

Alas for those banks and telecom companies operating in the country that will fail to connect themselves to the Kijitonyama based electronic data centre by end of this month, will have their operating licenses revoked without mercy, the government has reliably warned. The directive was issued by the Finance and Planning Minister, Dr Philip Mpango yesterday, when he held talks with banks executives in Dar es Salaam. According to the minister, in 2017, the government enacted the regulations for the Tax Administration Act, 2015, which require all banks and telecommunication companies to connect to the electronic system for payment of tax between June 2017 and December 31, 2017, but until yesterday, only 27 banks had complied with the legal requirement. “I have met almost 20 financial institutions to get to the bottom of why they were failing to implement the legal requirements, and among the reasons that I got was fear of the unknown; that because TRA was able to monitor all the transactions, they could easily be prone to cyber crime” he explained. Other reasons were that because the requirements came abruptly, the banks, especially those with very wide networks, like City Bank which operates in almost 100 countries, needed an emergency and urgent funding, and that they needed to make official communications with the headquarters before effecting the legislation. Because the banks have already violated the law, Dr Mpango ordered the Tanzania Revenue Authority (TRA) Commissioner General to institute appropriate legal actions, including paying penalties for the period over which they didn’t abide by the law.

Finance and Planning Minister, Dr Philip Mpango

The minister commended banks that implemented thelegal requirement within the specified timeframe, including Exim Bank, NMB, Tanzania Postal Bank, Amana Bank, CRDB, China Commercial Bank, Stanbic and Akiba Commercial Bank. The banks that are at good stages, according to Dr Mpango, are I&M, DCB, DTB, Mkombozi Bank and Maendeleo Bank. The banks that risk revocation of licences are Bank of Africa, Yetu Microfinance Bank, Barclays and Mwanga Rural community Bank. In mid December last year, when launching CRDB Bank’s new branch at the LAPF building along Makole Street, Dr Magufuli ordered all commercial banks and telecommunication companies which did not join the Tanzania Communication Corporation (TTCL)’s Data Centre Services to do so before December 31, 2017 or be ready to wind up. “We have given them enough time, this is a last warning, I order responsible government organs to take stern measures against those banks and telecommunication companies that have so far failed to do so before December 31, 2017, including closing down their services,” he said. Dr Magufuli said the new system would enable the government to monitor closely the operations of the said companies, particularly tax collection.

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