Government, private sector unite to tackle tax woes

Dar es Salaam. The government and private sector have pledged to collaborate on seven key issues, including the formation of a presidential committee to address chronic tax disputes.

The decision was made during the 15th Tanzania National Business Council (TNBC) meeting chaired by President Samia Suluhu Hassan.

The President chaired the meeting, which brought together private sector representatives and senior government officials, including the President, Vice President, Prime Minister, ministers, and Permanent Secretaries.

The TNBC council addresses issues impacting the business environment and explores improvement solutions.

Recently, traders closed their shops in Dar es Salaam and in other major urban centres, demanding that the government should put all taxes within a single collection basket and that the fines imposed on them whenever they go contrary to business norms must also be reduced to the level of traffic offences.

The traders were also of the view that the issuance of receipts should not be considered another tax because, to them, they [receipts] are just like a new form of harassment.

They want the TRA to stop a tendency to seize their goods and its (TRA’s) tendency to refuse to accept traders’ financial statements that have been prepared by registered accounting professionals.

Foreign nationals who conduct trading activities in Tanzania must be told to leave the country, while value-added tax must also be only collected from manufacturers and at air and sea ports instead of the current system where the taxman collects it even from shops.

The collection of withholding tax, the traders argue, is another bone of contention.

The resolutions reached at the TNBC meeting yesterday come against the backdrop of complaints from diplomats who have written to the government, saying investors from their countries were being subjected to multiple audits by the TRA.

Envoys from the UK, the US, the Kingdom of the Netherlands, Ireland, France, Belgium, Canada, Korea, Sweden, and the Federal Republic of Germany wrote to the Foreign Affairs and East African Cooperation ministry recently, saying foreign companies have been receiving unevidenced notices from TRA demanding payments and account reconciliation backdated to 15 years.

In an apparent response to the grievances, the TNBC meeting revolved yesterday around the idea that the government should form a presidential committee that will, among other things, review and improve the entire tax system in the country.

The committee, to be formed by President Hassan, will also review various policies, laws, and issues of the availability of foreign currency in the economy.

Reading the resolutions, TNBC executive secretary Dr Godwill Wanga said the committee will also look at ways of boosting Tanzania’s exports.

The meeting, Dr Wanga said, will also resolve that Tanzania should come up with a new blueprint for regulatory reforms to improve the country’s business climate by specifically looking at 24 new areas.

“The members saw that the current blueprint has already been revised, and now the members want another one, which will be prepared this year, 2024,” he said.

Tanzania adopted the current blueprint in 2028, setting the stage for a raft of amendments to laws and regulations governing the conduct of businesses in the country.

Prepared after thorough consultations with various private sector associations and World Bank officials, the blueprint saw the government initiating amendments of various laws, including those governing value-added tax (VAT), indicative prices for imports, immigration,  Labour, Social Security and Environmental Management, to mention but a few.

The changes, classified as ‘Quick Wins’ and ‘Medium Term’ reforms, also saw several areas being affected, including ports, regulatory bodies, and fees paid to various government agencies by members of the business community.

And, in another resolution of the 15th TNBC meeting, members of the public and private sector agreed to improve the Public Private Partnership system so that it becomes effective and that it is closely linked to the local content.

They also agreed that the various government ministries and departments should interpret and implement the philosophy of Reconciliation, Resilience, Reform and Rebuild (4Rs) and use it as the benchmark in their service delivery.

According to Dr Wanga, the meeting agreed that there be a timeframe for completion of the formulation of the local content policy and that it [the policy] should align with the PPP strategy.

In her remarks, President Hassan emphasised the necessity of implementing the resolutions that have been reached.

She insisted that if there are issues with amending the laws, they should be addressed promptly, and that when a similar meeting is held next year, the members should review the implementation progress.

The government, she said, must closely cooperate with the private sector to solve challenges for the benefit of the country and the economy.

“There are many resolutions that have been passed on to various sectors in the government.

Without a doubt, everyone has noted the areas for implementation.

Go back to the private sector, discuss with them, and bring the suggestions to us for adoption,” she said.

The TNBC meeting serves as the official platform for the government and the private sector to discuss the country’s development, build the economy, and enhance its international reputation.

“The government is determined to remove these challenges; we will form a committee involving members from both the government and the private sector to review the issues in detail; they will then bring us the recommendations and advice they think are appropriate for our country to adopt that tax system,” she insisted.

On the Tanzania Digital Economy Strategy Framework 2024/34, which was officially launched yesterday, President Hassan emphasised that training must be conducted quickly, starting from the lower levels, to ensure understanding and implementation.