Use of EFDs must mean better use of tax revenue By Editor

 

 

 

 

 

 

 

 

 

Editorial Cartoon

The Tanzania Revenue Authority began using electronic fiscal devices (EFDs) in tax assessment and collection three years ago, and it reports having made encouraging headway.

The progress is both in terms of boosting revenue collections and in helping businesses to organise better for enhanced productivity.

Initiatives made towards that end include regular draws introduced for taxpayers, where those eligible to participate can win prizes on the strength of their statutory contributions to government coffers.

On this, TRA deserves kudos for recognising the logic of marching with the times and promoting competition, a proven force behind social and economic development.

Most firms in Tanzania organise competitions of all sorts, chiefly aimed at luring customers to buy their products and services and ultimately earn more income.

Even government departments, autonomous agencies and non-governmental organisations have since seen the logic of engaging in competition as a way of swimming with the current.

We believe that, in the particular case of TRA, the raffle plan will encourage more people to pay tax – and this is why we say the agency has made the right decision at a most opportune time.

More commendations should also go to the TRA management for coming up with an EFD-aided strategy aimed helping other sectors to organise better so as to become more efficient.

TRA has vowed that no stone will be left unturned in its efforts to ensure that all those who ought to pay tax actually pay tax – and the correct amounts at that – and that no businesses will be spared.

We see TRA’s drive as prompted by the perpetual behaviour by many potential taxpayers reneging on that obligation, with some actually refusing to pay tax or refusing to issue receipts or keep proper records, while all this eats into government coffers and therefore sabotages the economy.

For instance, since the agency it intends to cast its net wide enough to cover even the likes of people engaged in commuter bus transportation, what will likely happen when that stage is reached?

The development could be a big relief to passengers in that it will improve services, currently worse than substandard particularly in urban areas like Dar es Salaam.
Secondly, the new system would help the bus owners streamline their businesses in that no revenue would be lost through ticket printing.

Bus owners often do not issue paper receipts or keep paper records simply because of the expenses they would incur if they acted to the contrary.

So, contrary to contrary belief, EFDs can prove a boon even for businesses and not only TRA because the use the devises would enable better management of finances and generally better deals for both service providers and customer – as the nation benefits in process thanks to rises in tax collections.

But then, some all-important questions: can anyone assure taxpayers and the larger public that the hefty amounts TRA collects really serve the nation? Additionally, when will we plug the loopholes facilitating tax evasion and the exclusion of thousands of money-minting businesses so that “perpetual victims” such as salaried workers can also heave well-deserved sighs of relief? 

SOURCE: THE GUARDIAN