We must cultivate a culture of paying tax

20Feb 2016
The Guardian
We must cultivate a culture of paying tax

The Tanzania Revenue Avenue late last week issued a directive to all oil dealers to install Electronic Fiscal Devices (EFDs) at all fuel stations.

According to the directive, the devices should be fitted directly to the pumps so that when customers fill in fuel the gadgets automatically record details about the amount of fuel purchased and the price.

The directive is part of the new government zeal to ensure every entity that engages in business pays due tax. The oil dealers are required to implement the directive by March 1, failure of which the errant fuel stations would have to close down.

The majority of fuel stations in the country have been doing business without recording correct information about their revenue, which normally serves as the basis for calculating tax by the country’s revenue body. There is no doubt that this practice has been denying the government what it rightly deserves as tax from oil dealers.

Knowing that tax is a compulsory payment to the government, which it, in turn, uses to fund various economic and social programmes and projects, most people have always viewed the payment of tax as a burden and thereby devised strategies to evade it.

The only group of Tanzanians which has completely failed to evade tax are employees, both in private and state sectors. They have often been complaining of being viewed as a soft target when it comes to paying tax (Pay As You Earn) simply because their contributions are directly slashed from their pay by their employers before submitting them to the revenue body, ie, the government.

Tax compliance in many parts of Africa, including Tanzania, is a serious problem. This has compelled governments to come up with punitive laws for the offenders, including attaching their assets,

For instance, in 2013 the Rwandan government introduced an electronic system in tax collection with a view to increasing tax compliance. The Rwandan Revenue Authority ( RRA) had set March 31, 2014 as the deadline for the business community to have embraced the e-filing and e-billing system.

However, reports which emerged later showed that some businesspeople were reluctant to adopt new system, a trend that compelled RRA to come up with punitive measures to enforce tax compliance.

Last year we witnessed businesspeople staging boycotts against the use of EFDs. Of course, some of the complaints were valid while others were not, but at the end of the day an agreement was reached by the stakeholders - that the machines should be used.

While tax compliance in the country may not be that much bad the true picture that unfolded immediately after the fifth phase government came in raises many questions. It is appalling to find that some large- and middle-class businesspeople have all along been on the list of tax evaders.

Just like other governments in the world, Tanzania’s has a lot of responsibilities for its people. People need safe water, reliable electricity, quality health and education services, security, good infrastructures, etc.

All this can only be possible if people pay tax. However, unless we cultivate a culture of paying it, then a cat-and-mouse game will ensue between TRA officials and businesspeople, which is not healthy for the country’s social and economic well-being.

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