Tanzania: Tax collection laws set for review

TANZANIA Revenue Authority (TRA) is considering relaxing its revenue collection regulations to allow taxpayers to settle their dues even on Sundays.

Currently, if the last day of the month is Sunday then taxpayers are forced to settle their obligations two days before or risk penalties. The new move comes onboard after Bank M, the market standard setter, launched its Money.Mapato service that enables taxpayers to pay revenues seven days a week.

The TRA Acting Director of Accounting Operations, Mr Happiness Nkya, says time has come for the regulators to revisit its regulations as technological advancement enables banks to settle tax dues even on Sundays.

“I think it should not be a problem, so long as our dues are settled within the time limit,” Mr Nkya said “I take up the matter and an effect to that will be communicated.” He was speaking on behalf of the commissioner general during the launching of the Money.Mapato, a Bank M’s hassle free tax paying service.

It is the only bank in the country that collects and remits taxes in five minutes to TRA. The bank is also the only bank in the country that operates from Monday to Sunday and opens doors from 08:00am to 08:00pm.

Due to its customers’ friendly and flexible operation, the bank promise to remit taxes in five minutes. The Bank M Chairman Mr Nimrod Mkono said in 1970s up to 1990s it was prohibitive to work on Sunday but business working environment has changed a great deal to compel the bank to operate on Sunday.

“It is high time we review our regulations and those who pay taxes on Sunday shouldn’t be penalised by assessors,” Mr Mkono said.

The Chairman, who is also the Member of Parliament and renown lawyer, said the Money.Mapato initiative marks yet another milestone in the bank’s continuing efforts to “bring to you the best in banking at a time of your choice and at a place of your convenience.”

Horwath Tax Consultants Director Mr Christopher Msuya said Bank M has changed the way of doing business in the country, which helps the government to increase taxes. On his part the Bank M Chief Executive Officer Sanjeev Kumar said the burden from taxation is not just the quantity of tax paid but also discomfort of paying the government revenues.

“we promise to remits our clients taxes in five minutes, even a coffee break takes longer than our revenue settlement (with TRA),” Mr Kumar said.

The CEO said “we follow our clients directives, even if they tell us to pick tax forms at their respective officers we will do that and so the rest for them.” A World Bank report Doing Business 2011 ranked Tanzania Mainland at 120th position as it takes 172 hours per year on tax compliance.

The country slipped four slots from 116th in 2010 to settle at the current position. To easy the tax paying burden the TRA introduced a number of initiatives to cut down the yoke of collecting the government revenues.

Among them is appointing commercial banks to collect tax on their behalf. Banks have come up with a number of products to smoothen the burden of paying taxes, as nobody like paying taxes.

Among then are Citibank, Standard Chartered who, like Bank M, integrated their system with ASYCUDA tax management software of TRA. But it’s only Bank M that promises to settle one’s tax obligation in five minutes and in any day of the week regardless of whether it is a weekend or work day.

Mr Sanjeev said in order to make customs and excise tax payments easy: “We have integrated in our systems, the ASYCUDA tax management software, which is a computerized customs payment management system which covers most foreign trade procedures.”

The system handles manifests and customs declarations, accounting procedures, warehousing manifest and suspense procedures. TRA authorized Bank M to access their customs and excise tax payments data base.

Sumaria’s Group Managing Director Mr Jayesh Shah said Bank M has made their business life easier and take away their penalty worries as it take cares of all tax matters. “They are (Bank M) keeping their promises and that matters a lot to business people,” said Mr Shah, who manages the group that manufactures plastics, consumer and pharmaceutical products.