New tax collection system to curb theft

Dar es Salaam. President John Magufuli yesterday revealed a government plan to centralise the revenue collection system.

Speaking at State House after he welcomed his Rwandan counterpart Paul Kagame, Dr Magufuli said the system would enable the government to closely monitor its revenue and plug loopholes which dishonest civil servants and businesspeople had been using to siphon off public funds.

He noted that Rwanda had agreed to lend  a hand to Tanzania on improving its revenue collection system. Dr Magufuli said it is easy for businesspeople and fraudulent officials to steal under the current revenue collection model. “Rwanda is very competent in ICT [information and communications technology] and President Kagame has assured me that he is ready to give ICT experts to assist us in establishing a robust and tamper-proof revenue collection system,” he said.

Tanzania intends to build a system which will enable the minister for Finance to know revenue status of any institution or area at any moment.

“We want a system which will enable the Finance minister to be able to know, in real time, money collected  in, say Ngara or Pemba,” he said. “The current system has been fraught with dangers of abuse as its institutions or councils have been having their own versions of revenue collection arrangements.”

The government resolve comes at a time when the Tanzania Revenue Authority (TRA) has improved its performance.

In the past six months monthly collections have not dropped below Sh1 trillion.

Dr Magufuli announced the plan one day after TRA and the Prevention and Combating of Corruption Bureau jointly uncovered a tax evasion syndicate involving a businessman and at least four companies which had denied the government nearly Sh30 billion in taxes since 2012.

Investigations established that the businessmen, who has since then been arrested, created a fake tax system using electronic fiscal devices, which he made and sold to businesspeople who then used them to claim value-added tax refunds from TRA.

Meanwhile, President Magufuli also revealed that the government would buy two new Bombardier q400 aircraft, after getting detailed information from the RwandAir chief executive, before the end of  September this year.

“If things go as planned, we will have two brand new Bombardier q400 planes before the end of September this year,” he said.

He said negotiations on the deal to were at an advanced stage and were progressing well.

The government has set aside Sh4.8 trillion for infrastructure development during the 2016/17 fiscal year, of which Sh700 billion will go towards the purchase of new aircraft and improvement of airports. The minister for Works, Transport and Communications, Prof Makame Mbarawa, told the just-ended Parliament that Sh500 billion has been set aside for purchasing new aircraft for Air Tanzania Company Limited.

 Three months ago, the government said it was planning to purchase four new aircraft to revive the national carrier. The deputy minister for Energy and Minerals, Dr Medard Kalemani, told Parliament that for a start two aircraft, each with capacity to carry 78 passengers, would be bought.

He added that the government was also looking forward to purchasing two new planes with capacity of carrying between 120 and 155 passengers each by end of 2018.

In another development, Dr Magufuli said the government has set aside Sh1 trillion ($460 billion) for construction a standard gauge railway line between Dar es Salaam and Kigali.

“I know that this money is not enough to complete the project but we have decided to set aside that amount so as to start the work. We know that if we start ourselves development partners will beef up the budget. For instance, China has already shown interest in the project,” said Dr Magufuli.

He also noted that the Tanzania Ports Authority would open an office in Kigali for cargo documents to be processed there without bothering importers and exporters from Rwanda to travel to Dar es Salaam.

“We have also removed roadblocks to reduce non-tariff barriers so as to facilitate smooth trade between our two countries,” he said.