Tanzania Revenue Authority Presentation

TANZANIA REVENUE AUTHORITY

TAX ADMINISTRATION REFORMS IN
TANZANIA AND DIASPORA
CONTRIBUTION TO TANZANIA
DEVELOPMENT
Presentation
To Diaspora London 3 Conference, May 6-7, 2011

TRA TANZANIA REVENUE AUTHORITY

AGENDA
1. INTRODUCTION

2. TAX ADMINISTRATION REFORMS

3. CONTRIBUTION OF DIASPORA IN
DEVELOPING TANZANIA

4. CONCLUSION


1.0 INTRODUCTION
TRA was established under TRA Act cap 399
and became operational in July 1996 with the
following functions:
a) Assess, collect & account for Govt Revenue
b) Administer revenue laws
c) Advise Govt on fiscal policy
d) Promote voluntary tax compliance
e) Improve quality of service
f) Counteract Fraud – tax evasion
g) Produce trade statistics and publications

2.0 TAX ADMINISTRATION
REFORMS
TRA Vision:
“To be A Modern Tax Administration”

TRA Mission:
“To render effective and efficient tax
administration which promotes voluntary
tax compliance by providing higher quality
customer service with fairness and integrity
through competent and motivated staff”

2.0 Tax Administration Reforms….

TRA Modern Tax Administration Features;

a) Revenue collection targets are met consistently

b) Service delivery that meets customer expectation

c) Fair and consistent application of tax laws

d) Skilled and qualified staff with high levels of
integrity

Five(5) Strategic Goals in the 3rd Corporate Plan;

 Increase revenue collection in a cost
effective way
 Modernise TRA Operations
 Provide high quality and responsive customer
service
 Promote voluntary tax compliance
 Enhance Staff Performance Management System


TRA has three departments responsible for
revenue collection
a)Domestic Revenue Department - administers taxes
from medium and small taxpayers; accounts for 18% of
total TRA collections and 30% of domestic revenue
b)Large Taxpayers Department – administers taxes
from 400 large taxpayers; accounts for 40% of total
TRA collections and 70% of domestic revenue
c)Customs and Excise Department – administers
international trade taxes and accounts for 42% of
total TRA collections.


TRA collects and accounts for Central
Government Revenue from Domestic taxes
and International taxes

Domestic Taxes include: VAT; PAYE,
W/Taxes, Gaming Tax, Income Taxes, Skills &
Dev. Levy; Excise Duty, Motor Vehicle taxes
and Departure charges

International trade taxes include import duties,
excise duty on imports, VAT on imports and
fuel levy


2.1 Revenue Collection

Revenue Collections have increased in absolute
terms from an equivalent of US$ 1,575 million in
2004/05 to US$ 3,742 million in 2009/10

Revenue to GDP ratio has increased from 10.8%
in 2004/05 to 14.6% in 2009/10


2.2 Payment of Taxes through Banks – 97% of
total revenue collection is paid through
Tanzania Interbank Settlement Scheme (TISS)
2.3 Use of ICT systems for Tax Operations
Integrated Tax Administration System -ITAX
(includes TIN registration & e-filing)
ASYCUDA++ for Customs operation
Computerised Motor Vehicle Registration System-
today M/Vs are registered at the port of entry
Computerised Drivers License System


2.3 Cont… Use of ICT systems for Tax Operations
VAT Registration done on line
Import/Export Valuation Database System;
 to support Trade Facilitation

 for Uniformity in valuation

 Enhance Transparency

 Lodging and processing of Customs declarations
web-based
On Progress:
 On line Tax assessments



2.4 Taxpayer Service and Education
Stakeholders Forum- Dialogue between TRA &
its Stakeholders
Taxpayers’ Day- Recognize compliant taxpayers
Taxpayers’ Charter-Outlines Taxpayer’s Roles &
Responsibilities & Service Standards expected
from TRA
Taxpayer Centres



2.4 Taxpayer Service and Education
Taxpayers awareness-seminars, printed
materials & other media.
Annual taxpayer perception survey
TRA website- for information
2.5 Governance and Integrity
Internal Affairs Unit
Whistle Blowing; Code of Ethics
Declaration of Assets by staff



2.7 Central Data Processing Office (CDPO)
Processing of import declarations is done
centrally at DSM CSC since 2010

Provides uniform treatment especially on
valuation & classification across the country


3.0 CONTRIBUTION OF
DIASPORA IN DEVELOPING
TANZANIA
“DIASPORA CAN SEND TO THE
FOLLOWING CATEGORY OF PERSONS
SPECIFIC DUTIABLE GOODS FOR THE
ALLEVIATION OF POVERTY AND
DEVELOPMENT OF TANZANIA. TAXES
WILL BE EXEMPTED”


3.1 Who Shall Receive the Goods

 Religious organizations
 Non-Religious Charitable community based
organizations
 Local non-profit driven organizations/institutions.
 International non- profit driven organizations.
 Disabled, Blind and Physically Handicapped
persons


3.2 Authority/Mandate to Exempt
Duties and Taxes
 Government Notice Number 197 of 2001. It
exempts Import duty.
 Government Notice Number 200 of 2001. It
exempts Excise duty
 The Second and Third Schedule to the VAT Act
1997 exempts and provides relief of VAT
respectively.
 EACCMA 2004


3.3 Goods Which Can Be Sent

In the case of Religious organizations

Goods solely for the purpose of advancing
religion.



In the case of registered Charitable Community
based and non-profit driven
organizations/institutions.

 Goods which will be used by the organization
in the execution of its functions

 Goods for relieving persons from effects of
natural calamities, hazards or disasters.


 Goods for development, maintenance or
renovation of projects relating to health,
education, training, water supply,
infrastructure or other projects aiming at
advancing the community.


3.4 Exceptions

 The exemption on goods above do not cover
VAT on motor vehicles and motor cycle.


3.5 Procedure for Processing Tax
Exemption on Imports
 An application for tax exemption is sent to the
Commissioner for Customs and Excise.
 All important documents including a letter
from the District Commissioner confirming the
existence of the project.
 Commissioner approves the exemption
through a letter sent to the organization.
 Organization engages a Customs Agent to
clear the goods.

3.6 Treasury Voucher and Cheque
System
Tax exemptions to these Organizations follow
the Treasury Voucher and Cheque System
(TVC)
Whereby the Government pays taxes on their
behalf. Taxes involved are:
 Import Duty

 Excise Duty

 VAT on Importation

 VAT on domestic supplies


3.7 Procedure Applicable on
Processing Exemptions
Local Supplies
 The applicant will approach the domestic
revenue tax region where such organization
operates and submits documents as listed in the
check list for approving exemption, together with
an Invoice. A Treasury Voucher will be prepared
and sent to the Treasury for a Treasury cheque
 Upon receiving treasury cheque, the applicant
will be requested to complete form VAT 223/224
 Upon approval of VAT form 223/224 the
applicant will proceed to his/her supplier to take
his/her VAT free good

3.8 Checklist for Approval of duty
exemption to Religious Organization
and NGOs
 An application letter to the Commissioner for
Customs and Excise and attaching thereto:
1. District Commissioner letter to confirm the existence
of the organisation
2. Certificate of registration of the organisation issued
by the Registrar of Societies (Ministry of Home
Affairs)
3. Bill of Lading or Airway Bill or Road Consignment
Note on the name of the organization
4. Invoice/Packing List or Donation Certificate
5. Government Notice if any

3.9 Exclusions
Non religious organisations (NGO) will not be
exempted from VAT on importation of or purchase
of the following items:
A. Consumables such as:
Foodstuff
Beverages,
Spare parts,
Toilet Papers,
Detergent and other washing liquid
Packing material
Flowers
B. Motor vehicles and motor cycles


3.10 Important Conditions

 Goods shall not be disposed off in any manner
without prior approval of Commissioner for
Customs & Excise

 It is a procedure that District commissioner’s
letter must be signed by the DC in person –
representation not allowed


3.11 Disabled and Handicapped
Persons
 Import duty is exempted by the fifth schedule
to the EACCMA 2004 Part A

 VAT is exempted under the second schedule
to the Act


3.11 Disabled and Handicapped
Persons
Goods Involved
 Materials, articles and equipment specially
designed for use by disabled or physically
handicapped persons.

 Those intended for the educational, scientific
or cultural advancement of the disabled for
the use of an organization which is approved
by the Government


4.0 CONCLUSION
TRA will continue to implement its core function of
collecting and accounting of Government revenue

TRA is committed to improve domestic resource
mobilisation to enable the Government fulfil its
social obligations

TRA is determined to make Tanzania self
sufficient in terms of budgetary requirements and
reduce Development Partners’ Dependency


Visit us during the
conference

and on

http://www.tra.go.tz

.

“Together We Can do more”

MTU KWAO, JENGA KWENU

Thank you for your kind
attention.
TRA TANZANIA REVENUE AUTHORITY 32

Tanzania Revenue Authority Presentation

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