Tanzania’s revenue collection for the financial year 2021/22 has remained broadly within the target, the Central Bank revealed in its Monthly Economic Review (MER).
The MER for July said that in June 2022, domestic revenue collection amounted to TZS 2,522.5 billion, or 106.5 percent of the monthly target and 17.8 percent higher than collections in the corresponding month in 2021.
“Out of the amount, central government collection was TZS 2,466.9 billion, and local government revenue from own sources was TZS 55.6 billion. Tax revenue amounted to TZS 2,073.5 billion, or 109.1 percent of the monthly target and 17.9 percent higher than the collection in the corresponding month of 2021,” the Economic Review said.
It further noted that overperformance was observed in income taxes (121 percent), domestic VAT (119 percent) and taxes on imports (104 percent) which is associated with improved compliance and payment of tax arrears, implementation of VAT e-filing system and increase of importations of intermediary and consumer goods.
The Review pointed out that during the month, external loans and grants worth TZS 227.5 billion and TZS 97.2 billion were received, respectively.
“Expenditure amounted to TZS 2,436.5 billion, of which TZS 1,323.5 billion and TZS 1,113.0 billion were for recurrent and development expenditure, respectively,” it said.
Adding, “Locally financed development expenditure was TZS 839.3 billion, which is 75.4 percent of the total development expenditure.”
To ensure that the revenue collection remains within target, Tanzania Revenue Authority (TRA) said that they have come up with new strategies in this financial year 2022/23 so as to achieve the collection target as part of the government’s budget of Sh41.48 trillion.
TRA’s Taxpayer Services and Education Director, Mr Richard Kayombo said that one of their new strategies called house tenants to submit taxes compared to the previous mission that saw landlords do the dues.
“One of our new strategies will give tenants a directive to pay 10 per cent of house rent in both private and commercial houses as a way of expanding the scope of tax payment,” he said.
However, in previous years, the tax body’s law gave the house owners to submit the house rent tax, but it didn’t work well that’s why TRA had to review the law and come up with a new strategy that included tenants on payments.
He further insisted that any tenant who is in a private house or a business house must pay a responsible withholding tax of 10 per cent of the rent and submitting to Tanzania Revenue Authority.
Commenting on the new taxman’s strategies to improve the tax base, Institute of Accountancy Arusha (IAA) Former Rector Professor Johannes Monyo lauded the TRA’s strategies on improving the nation’s revenues but has also urged the tax body to increase domestic revenue mobilisation without constraining businesses.
Dr George Katyega, an economist from Tanga Region said that the Tanzania Revenue Authority should also raise more revenue from existing measures as long as more people are brought onto the taxpayer’s record.
“If TRA needs to improve tax collection, I urged them to improve tax education, taxpayer services and communication as well as service delivery with its stakeholders,” Dr Katyega said.
Ends