Banks to collect LGAs taxes

DAILY NEWS Reporter

TWO largest banks CRDB and NMB will be collecting taxes and duties for the regional administration and local government to boost revenue collection and plug off leakages.

The government outsourced revenue collection works to the two banks to ease tax payments and build more effective and efficient local government revenue administration.

The banks are set to easing tax payment using ICT infrastructures thus maximizing local government collections.

CRDB announced it has been approved for the work in a statement issued yesterday and said it would work with RALG for more convenient way of paying taxes for local government using electronic facilities.

It said tax and duty payments could be made through Simbanking and FahariHuduma wakalas and government centres that are located in more than 65 municipalities. The payments could also be made through CRDB microfinance branches or any of CRDB branch.

A fortnight ago NMB launched the Integration with the Local Government Authorities Revenue Collection Information System (LGRCIS) where over 180 councils and districts are set to benefit.

The decision to launch an e-revenue collection system aims at moving away from physical cash collection to the electronic revenue collection systems.

The integration is in response of the government directives to embark on the electronic payments as a way to increase transparency and revenue collection within the local government authorities.

In the last 17 years, the government has been empowering councils on revenue collections, but they have not been able to manage their revenues including their capacity in revenue collection.

NMB’s pilot project in the Arusha City Council revealed that in last year’s fourth quarter collections increased from 2,189 transactions valued 1.2bn/- to 7,485 transactions valued at 2.7bn/- in the first quarter of this year.

The move comes as Controller and Auditor General 2014/15 reports showed that management of revenue collection by local governments from own sources was still a big challenge -- leading to a loss of billions of shillings.

The CAG 2014/15 report on the financial statements of LGA showed that 76 local authorities failed to get 5.3bn/- collected by agents from own sources while 58 others failed to collect 15bn/- from existing revenue sources.

The report further indicated that 466m/- collected by 35 LGAs from various sources was not evidenced to be banked in local councils’ bank accounts.