Geoffrey Mwambe, the Minister of State in the Prime Minister’s Office (Investments) told the Tanzania Private Sector Foundation (TPSF) in a city meeting on Thursday that outstanding tax appeals lodged by investors amounts to a whopping 360trn/-
“We had many tax cases in the tax tribunal. Their value was almost ten times our national budget,” he stated, expressing gratitude to the Minister for Finance and the TRA Commissioner General for resolving the tax disputes amicably and out of the tribunal.
Many of the concerned investors opening those appeals have already started to pay taxes that they believe are genuine, he elaborated, underlining that this was a good sign.
He said that the Tax Administration Act provides that if an investor intends to lodge complaints against tax assessment, the firm has to pay a 33 per cent down payment and thereupon lodge the suit in the Tax Revenue Appeals Tribunal.
All bank accounts previously attached (by TRA) due to non-compliance of tax payment have been opened, he declared.
Government engagement with investors for greater compliance in tax payment has enabled revenue collection to rise by 12 per cent lately to 18trn/- in the context of the current financial year without using force, meanwhile as effects of the Covid-19 pandemic still persist, he asserted.
“We are now doing very well in the aspect of revenue collection without using force. We need to raise more awareness to ensure that people pay taxes voluntarily,” he emphasised.
Insisting that the government is committed to support the development of the private sector to enhance its contribution to national development, the minister asserted that the president wants to see the private sector nourished.
“Her ambition is to see the emergence of new billionaires in the country. This can be made possible through proactive participation of the private sector in economic activities,” he elaborated.
President Samia Suluhu Hassan back in April directed the Tanzania Revenue Authority (TRA) to urgently resolve tax wrangles, intoning that the sixth phase government would not tolerate an oppressive tax regime. TRA has to ensure fairness in discharging its functions, she demanded.
She said TRA officials must adopt polite approaches to assessing payable taxes that propel higher collections of revenues without fomenting chaos with investors.
The minister similarly affirmed that the government has commenced payment of Value Added Tax (VAT) refund claims as part of its commitment to support the private sector.
“Through the government’s stimulus package, a massive injection of money into the economy is underway, where honouring tax refund claims is part of this commitment. We have paid a lot and we will continue to pay outstanding claims to ensure there is more money in circulation,” he stated.
Richard Kayombo, the TRA director for taxpayer services said in an interview last month that the taxman had already paid over 300bn/- to settle outstanding Value Added Tax (VAT) refund arrears.
Starting from July 2021, TRA had paid out 104bn/- with verification continuing on pending claims to ascertain the authenticity of the claims before payment, while new submissions are received every month, he added.