TRA issues directives over the use of EFDs in the country

Tanzania Revenue Authority (TRA) has introduced directives to businesspeople and trading enterprises in the country on the implementation and supervision of laws governing the basic use of the Electronic Fiscal Devices (EFDs) The directives are to be strictly observed as in accordance to the laws in order to ensure work efficiency and reinforcements as per the Cap 104 of the subsection 2 of the TRA Act of revenue collection. TRA’S Director for Taxpayer Services and Education Richard Kayombo said yesterday in Dar es Salaam that, punitive measures are to be introduced to stubborn traders who tend to misuse the devices for the purposes for which they have been designed. He told the Guardian on Sunday in a telephone interview and later issued a statement which stated that, there will be a series of warning to be issued in three times to alert the would be defaulters.  After that, he continued and noted that stern measures would be taken according to the law whereby the culprits would be charged 5 percent of the total amount of their collections for the first time.  On the second warning of defiance, a penalty of 10 percent would be imposed to defaulters. He further noted that on the third time, serious penalties would be imposed including a fine of between Sh. 1 million and 3 million or faces a jail term of not more than three years imprisonment. He also reiterated TRA’s commitments in moving ahead with the enforcement of EFDs with even much more vigour after the president of The United republic of Tanzania cleared the air on the position of the government that there is no turning back on EFDs.  “This is because we want to do away with unrealistic tax assessments that are based on guess work due to lack of reliable sales records on the side of the business community either due to poor record keeping and sometimes intentionally with the aim of evading taxes”, he said. However, he reiterated his plea to the business community in the country to be cooperative and simply comply, while pledging to treat them with dignity and respect and do everything possible to ensure that there are no skirmishes along the way. In recent years, the government introduced electronic use of EFDs which involves Electronic Tax Register (ETR) Electronic Signature Device (ESD) and Electronic Fiscal Printer (EFP). 

Deputy Finance Minister Adam Malima

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 indicates that, only 200,000 business people and their entities out of estimated 1.5 million entities have been registered for VAT. Further more it should be noted that the prices of the EFDs were reduced from 800,000 to a range of 600,000 to 690,000 since 2013 for ETR machines depending on the make after successful discussions between the distributors and TRA.  Others such as Electronic Fiscal Printer and Electronic Signature Device are sold between Sh. 1 million and Sh. 1.2 million The distributors however have the freedom to negotiate with the traders for even better deals, installments or any other arrangements that suits them. Meanwhile, the Deputy Finance Minister Adam Malima has faulted some politicians who are inciting few traders to boycott the use of EFDs following the recent move by some traders who became resentful when the government introduced to them the use of EFDs. He made the call on Friday when he opened a two day training seminar for journalists reporting tax news which was organized by their network known as ‘Tawnet’ in Dar es Salaam. He said during the time when traders went on strike to boycott the EFD machines, there were scores of politicians who were behind them while they know there is no country which can conduct its own development without collecting taxes to run various development projects.