New phase of tax system targets 200,000 traders

BabuK · 2013-04-12T15:22:29+00:00

There will be no backpedalling on the governments resolve to implement the second phase of migration to the use of electronic fiscal devices (EFDs) in tax assessment and collection, the Tanzania Revenue Authority (TRA) has said. The changes are expected to come into effect on May 15, drawing from the successes and challenges of the first phase of implementation, and will cover some 200,000 traders not currently registered under the VAT arrangement. Those covered under the phase would be those with businesses with an annual turnover of between 14m/- and 40m/-, and this would be a countrywide operation that would later come down to those engaged in businesses not as big. TRA assistant commissioner (Domestic Revenue) Generose Bateyunga and principal taxpayer education officer Hamisi Lupenja made remarks to that effect in discussions in Dar es Salaam yesterday with members of the Tanzania Editors Forum. The talks revolved around the precise role the media and other agencies such as TCCIA, TABOA, Sumatra and TFDA ought to play in informing, educating and sensitising members of the business community and the larger public on the need for full voluntary and honest compliance with tax payment. The TRA officials admitted that there is every reason to cast the tax net much wider, which would mean diversifying sources of revenue instead of targeting only traditional ones such as are found in the formal sector. They said they were aware of the tax revenue haemorrhage owing to a number of loopholes, adding however that these would be plugged gradually and strategically to ensure they do not backfire. Bateyunga and Lupenja dwelt at length on the benefits of using EFDs, including fairness and transparency in tax assessment, improvement of business records, minimising pilferage, maximising profits, and ultimately raising VAT revenue collections. They said the use of the devices deserved support because it was a modern way of keeping records after migration from the manual registers in that it cannot be tampered with and therefore guarantees business security for traders. The use of EFDs also simplifies tax refunds because the information contained in fiscal documents helps other agencies such as the Energy and Water Utilities Regulatory Authority (Ewura) capture accurate data relating to fuel and water consumption, Lupenja said. Accordingly, he made an impassioned appeal to the public to cultivate a culture of unqualified tax payment compliance as a way of increasing government revenue for enhanced social and economic development. He meanwhile cited the challenges TRA has been facing as including resistance by some traders to acquire and use the devices as well as to issue genuine fiscal receipts, adding: There is also the challenge of most consumers of goods and services not caring to demand receipts for every purchase made. In remarks that could come as a surprise to members of the public, the TRA officials said it was a legal obligation under the EFD system for traders to produce and issue a receipt for every sale made and equally mandatory for buyers to demand and take a receipt for every purchase conducted. They said failure by a trader to issue an EFD receipt attracted a fine of not less than 3m/-, while anyone fraudulently using such a receipt would be liable for a fine to the tune of twice the tax not paid or 4m/- including the tax not paid whichever will be greater. They added that tampering with EFDs and related software called for a fine not exceeding 1m/-, while consumer failing to demand an EFD receipt would also be liable to a fine not exceeding that amount. TRA officials plan to spend the next few months conducting sensitisation seminars and campaigns across the country on the importance of acquiring and using EFDs as well as issuing and demanding genuine EFD receipts. SOURCE: THE GUARDIAN

Thread starter BabuK
Start date Apr 12, 2013

BabuK

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New phase of tax system targets 200,000 traders

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