Electronic tax assessment: Tanzania’s taxation takes a digital leap

In an era marked by rapid technological advancements, governments worldwide are embracing digital transformation to streamline their services and improve efficiency.

 Our Tanzania Revenue Authority (TRA) is no exception, as they adopt electronic tax assessment methods to modernise their operations and enhance taxpayer convenience.

Therefore, it is important to discuss transition to Electronic Tax Assessments. Until now, Tanzania’s Tax Revenue Authority (TRA) delivered tax assessments manually, following specific guidelines in the Tax Administration Act R.E 2019, Chapter 438. These guidelines required serving documents by hand or registered mail, including the Taxpayer Identification Number to the manager of the company as details updated during the registration of the TIN of the company.

The Act defines a “manager” as someone making significant management decisions. Recently, there’s been a shift towards using the e-filing system to deliver tax assessments, eliminating the need for printed assessments.

How can you confirm the receipt of an assessment? It’s crucial for taxpayers to understand the process.

A document registration number is produced and made available using the individual’s authentication code, and this is when an electronic document is deemed served, as per Section 34 of the Tax Administration Act R.E 2019, Chapter 438. Modifying an evaluation using the e-filing portal is considered served on that day in practice.

How to know if your assessment is amended: key steps

Step 1

To stay updated, it’s recommended that taxpayers regularly verify their contact information on the E-Filing Portal and check for any communications or assessments served by the Commissioner General.

Step 2

Registration: Taxpayers must register on the TRA online portal (e-filing portal) using their TIN, following the steps in the TRA user guide for e-filing of tax returns.

Step 3

Verification: It’s crucial for Taxpayers to verify their contact information, such as mobile phone numbers and email addresses, for notifications. Providing the mobile phone number of a key contact person is advisable. In many instances we have noted that a taxpayer uses the contact of their lawyers or tax consultants or employees during registration and forget to update the same when either employees leave the company or there is change of the tax consultant/lawyers.

Step 4

Notifications: Taxpayers receive SMS notifications when a new tax assessment is available for viewing and downloading on the E-filing portal.

Step 5

Access and Authentication: Taxpayers access their assessments through secure login credentials, ensuring that only authorized individuals can access sensitive tax information.

Challenges and concerns in serving electronic Tax Assessment

While electronic tax assessment offers efficiency, cost reduction, accessibility, and environmentally friendly benefits, it also poses challenges to the taxpayer and tax authorities:

• Digital Literacy: Not all taxpayers are tech-savvy and may struggle with online portals and documents.

• Server Downtime: Online portal accessibility can be hindered by server downtime or high traffic.

• Network Issues: Some taxpayers may not receive notifications of assessment amendments.

• Accessibility: People lacking internet access or digital devices may face exclusion from electronic systems.

These problems may cause taxpayers to overlook amended assessments, which might provide problems if they choose to object within the allotted 30-day period.

Though electronic assessments provide a possible path to better tax administration and compliance in the digital age of taxes, the tax authority should guarantee accessibility for everyone as we transition to electronic assessment, taking into account issues like digital literacy, server uptime, network dependability, and access.

Zainab is Assistant Tax Manager at PKF Advisory limited in Dar es Salaam