No more freezing of accounts, TRA assures foreign investors

Dar es Salaam. The Tanzania Revenue Authority (TRA) yesterday assured foreign investors that those with outstanding tax debts will not have their accounts frozen, instead, discussions will be held to reach an agreement.

The taxman made the commitment during a forum hosted by the Tanzania Investment Centre (TIC) to address some of the tax concerns by foreign investors, including the issuance of urgent notices that lead to account freezes.

“We need investors as they are partners of TRA. We have come today to listen to them so they can conduct their activities and pay the required taxes. I assure them that we will build good relationships with them, and for those with debts, we will not freeze their accounts without a due process. We will have a dialogue and agree on proper repayment,” said TRA commissioner general Yusuph Mwenda.

According to him, those with tax exemptions that followed the proper procedures will be recognized.

He encourage others who are looking to invest that TRA will work with TIC to improve the business environment to increase the number of investors and taxpayers in the country.

TRA has also warned those who do not comply with tax laws to refrain from such behaviour for now, adding that the audit and investigation units have been strengthened.

“This meeting is not the end but the beginning of engagement with foreign investors just as we do with domestic ones. They have a significant role in increasing employment and the country’s revenue,” said Mr Mwenda.

He added that TRA will work hand in hand with foreign investors and with other ministries such as finance, investment to ensure predictable investment in the country, as well as continue listening to the investors in order to get feedback and make reforms if necessary, to support their businesses.

He mentioned that one of the concerns from investors is the recovery of tax liabilities but TRA promised to provide support by offering tax education to ensure investors comply where possible, and follow the due procedures to recover any unpaid taxes.

“The use of urgency notices will be our last resort. Before we take that step, we will explore other options, including dialogue and the possibility of payment by installment. If all else fails, we will then issue the urgency notice,” Mr Mwenda said.

For his part, TIC board chair Binilith Mahenge said the issue of investment and business is a global matter which, alongside creating a conducive environment, it requires to engage with investors to gather their feedback on the available challenges.

He said that a significant part of the meeting aimed to demonstrate that the government is ready to collaborate with foreign investors, showing that investors have confidence in the country, which is why they are coming and still wish to invest.

Dr Mahenge noted that currently, over 60 percent of investments in Tanzania come from foreign investors, emphasising that such meetings are highly beneficial and help to showcase the opportunities in attempt to expand investment scope.

“Many challenges faced by investors related to tax issues will be addressed today by experts from the TRA. Therefore, we continue to thank investors for choosing to invest in Tanzania,” he said before the meeting started.

Tanzania Private Sector Foundation (TPSF) executive director Raphael Maganga said the private sector previously faced various challenges regarding tax matters, but various meetings have helped to alleviate some of the challenges.

He stated that significant reforms are underway in the area of taxation with the establishment of a presidential commission for tax reforms.