Private sector ask Samia to review tax system

Dar es Salam. The Members of the Tanzania Private Sector Foundation have advised the government to conduct a comprehensive review of the taxation system and the fee structure in order to improve the business environment in the country.

The advice was one of the seven issues submitted to the government yesterday by TPSF chairperson Ms Angelina Ngalula at the 14th Tanzania National Business Council (TNBC) meeting held at the State House in Dar es Salaam. The meeting was presided over by TNBC chairperson President Samia Suluhu Hassan.

Ms Ngalula explained how the Tanzanian taxation system was ‘out of date’ having been reviewed for the last time more than a decade ago and how recent efforts to have it overhauled proved unsuccessful, leading to undesirable results for the economy.

“At the 12th TNBC meeting that you chaired, your excellence, we submitted the proposal for a review of the taxation system. You agreed and promptly ordered an immediate review. The implementation of your directive has been stuck and has been the source of complaints and conflicts,” Ms Ngalula noted.

Ms Ngalula asked President Samia to re-order the taxation system’s review and set a specific timeline for the exercise.

The comprehensive review, she added, should look into tax rates, tax management, and systems such as the EFD and others.

“We reiterate our plea for fast-tracking the overhaul of the taxation system, government revenue, and expenditure,” Ms Ngalula noted. As she officially opened the meeting,

President Hassan told ministers and permanent secretaries who attended the TNBC meeting to go and implement the issues raised by Ms Ngalula.

“I direct you to go and implement what we have heard here that has not yet been worked upon. I know a lot has been done, but we must speed up implementation of the unresolved issues,” President Hassan noted.

She observed that Tanzania has made a lot of progress in advancing the role of the private sector through the formal system of public-private dialogue at the TNBC.

Other issues

TPSF also urged the Tanzania Revenue Authority (TRA) to adhere to international practises in the purchase and inventory of merchandise that allow the consolidation of consignments by several traders using agents.

Consolidation starts in the purchase, shipping, and customs processes, but in Tanzania, the failure of harmonisation of TRA’s internal digital processes has made this practise difficult, she added.

“This is one of the causes of the recent protests by traders. We urge the TRA to improve the customs systems and enable them to synchronise them with internal revenue systems to make doing trade easier in the country,” Ms Ngalula said.

TPSF also called for deepening the use of technology and synchronising government digital systems to facilitate tax management. This will reduce the need to physically track tax payers, as frequent personal contacts between tax payers and tax collectors increase instances of corruption.

The use of structured discussions using official business associations such as TPSF should be the trusted way to foster dialogue between the government and the private sector, Ms Ngalula noted. “This should stop the growing trend of government-private sector dialogue using unstructured platforms that is sometimes devoid of civility,” she explained.

Meanwhile, President Hassan yesterday stressed the need for the private sector to support the government’s policies aimed at addressing the shortage of foreign currency through increased exports of agricultural products.

“TAHA is doing a great job. A small study that we conducted shows that food crops are now the cash cow. So we are promoting the export of non-traditional crops to bring in more foreign exchange,” she noted.