Why TRA collections have shot up by 67% in four years

Dar es Salaam. The Tanzania Revenue Authority (TRA) said yesterday that its collections rose to Sh58.3 trillion during the first four financial years of Dr John Magufuli’s presidency.

The figures, revealed by TRA deputy commissioner general Msafiri Mbibo during a news conference in Dar es Salaam, signify a 66.7 per cent increase on what was garnered during the last four financial years before Dr Magufuli came into office.

A total of Sh34.97 trillion was collected during the corresponding period of the previous administration. Mr Mbibo attributed the upward trend to taxpayer compliance, which was a result of more transparency in TRA’s operations.

Citing the use of electronic fiscal devices (EFDs) and record keeping, he also attributed the performance to the strengthening of the tax administration system.

“Transparency in tax collection and spending of the collected revenue and the establishment of electronic tax payment systems appear to have had a positive impact on taxpayers,” noted Mr Mbibo.

He said during the period, TRA increased the number of taxpayers to 3.01 million from 2.2 million.

However, much as the figures indicate an upward trend, they also point to a consistent tendency to miss targets which the taxman will have to contend with.

The Sh58.3 trillion collected in the last the past four financial years was 7.699 per cent short of target.

Going by budget figures for financial years during the period under reference, the taxman had a target of garnering a total of Sh63.163 trillion to partly implement the government’s revenue and expenditure plans.

This suggests that the Sh58.3 trillion that was garnered during the four years was Sh4.863 trillion below the target for the four years.

However, the 7.699 per cent in average of the missed target is an improvement if past missed targets are taken into consideration.

For instance, during the 2014/15 financial year, TRA was required to collect Sh11.178 trillion, but the target was missed by 11 per cent after the taxman ended up collecting Sh9.98 trillion.

Similarly, the authority missed its own target of collecting Sh10.395 trillion by ten per cent during the entire 2013/2014 financial year. It ended up collecting Sh9.365 trillion.

Mr Mbibo cited some of the challenges the taxman was grappling with in the course of revenue collection as tax evasion by unscrupulous traders, smuggling through borders and reluctance among a few traders to use EFDs.

“We deserve to congratulate ourselves, but we should bear in mind that still we have a long way to go when it comes to revenue collection,” he noted.

Mr Mbibo directed businesses to ensure that they issue receipts, adding that customers should confirm that the receipts indicate what they actually bought and the sum paid.

“The hopes of this nation rests on the shoulders of the 3.01 million registered taxpayers and buyers of their products and services,” he said.

“If we are to build an innovative and connected economy, a quality living environment and inclusive society, we need to pay taxes.”

He said tax revenue collected supported the funding of key government projects, including the construction of roads, railways and bridges, hospitals and schools.

TRA is optimistic that with the strategies it has put in place, it has a chance to do even better this year.

Mr Mbibo said in the first quarter of the current fiscal year some Sh4.5 trillion was collected, well above the Sh3.7 trillion recorded during the same period last year.