New TRA chief’s pledge to business community

Dar es Salaam. The newly appointed Tanzania Revenue Authority (TRA) Commissioner General, Mr Charles Kichere, says he plans to meet all business operators through their associations across the country as he seeks to bring the taxman closer to its clients in the wake of a challenging business environment.

On Tuesday, Mr Kichere met with members of the CEO Roundtable of Tanzania (CEOrt).

Speaking during the event, he said the goal of such meetings was discuss with them on ways of sustainably widening the tax base in a changed business environment that has seen several companies downsizing their workforce.

“I believe in discussions. I hope through discussions with business operators we will come up with a sustainable way of paying more taxes despite that there are some challenges among other businesspeople,” he said.

The meeting comes at a timewhen the government’s cost-cutting measures are reportedly strangling the growth of the private sector as it (the private sector) grapples with an illiquid market.

Reduced spending by the public sector – amid the desire for increased revenue collection to meet budget targets - has also seen some hotels turning themselves into hostels while banks are also battling with an increase in Non-Performing Loans. A number of large and medium sized manufacturing houses have recently downsized their workforce as they align their operations to new economic realities.

Yesterday, the International Monetary Fund (IMF) country representative Bhaswar Mukhopadhyay was quoted by Bloomberg that Tanzania’s focus on more efficient expenditure could be good in the long run but it has also slowed expansion in the country.

Mr Bhaswar Mukhopadhyay is quoted by Bloomberg as saying that while government reduced its recurrent expenditure “very sharply,” affecting large sections of the economy that are traditionally reliant on public spending, it also failed to roll out capital projects fast enough to counter the slowdown.

“This particular government has also actually made the hard decisions to curb wasteful spending, try and re-orient spending toward capital spending,” Mukhopadhyay said Monday in an interview in the commercial hub, Dar es Salaam. “In the budget it had allocated significant amounts of money toward capital spending, but at least in the first half of the year, that capital spending had not started flowing at the same speed as had been anticipated.”

According to Bloomberg, the result has been a “soft patch” in growth, he said. While the economy expanded by a slower-than-expected 7 percent in 2016, it still beat sub-Saharan Africa’s 1.4 percent expansion last year. “In the immediate period, there seems to be in the first half of this calendar year some slowing from the very high growth rates that Tanzania has achieved in recent years,” he said. “But by and large, the fundamentals of the economy remain strong and growth remains strong.”

And Mr Kichere said at the CEOrt meeting that he understands that some companies have been experiencing hard times but noted that with discussions, everything will be alright. “I have heard that some of businesses are not doing well but it is not an excuse of not paying taxes, duties and levies which they are supposed to pay,” he told journalist.

He said much as he wants to collect an increased amount of tax revenue, he will not be happy to do so at the expense of the growth of the private sector.

“I want to collect as much revenue as I can during my regime, but it should not hurt the business of taxpayers. That is why I am meeting the CEOs today so we can exchange ideas,” he said.

He promised to address the challenges in tax collection and bank on the new opportunities to raise government funds.

The CEOrt chairman Ali Mufuruki believes that Mr Kichere will consider the opinions of the CEOs when implementing his long-term vision of collecting tax.

CEOrt is a policy dialogue forum that brings together more than 100 CEOs of leading companies in the country which contribute almost 44 per cent of all revenue collections in a year.

Mr Mufuruki hopes that the new TRA boss will consider the fact that the business among companies is currently not doing fine due to what he termed cash crunch.

“When the TRA boss accomplishes his tasks we are wishing for him to consider that the economy has slowed down, and money in circulation is too little that even the purchasing capacity of the people has diminished,” he said.