Dar es Salaam. President John Magufuli, who on Wednesday evening succumbed to a rare heart
condition, will be remembered for strengthening tax evasion crackdown, measures that saw revenue collection on an upward trend.This was evidenced in December last year when the Tanzania Revenue Authority (TRA) broke its own records in revenue collections by collecting Sh2.088 trillion in taxes that month alone.
That was the highest amount it has ever collected since it started operations on July 1, 1996.
When President Magufuli, who died at the age of 61, came to office in November, 2015, monthly revenue collection averaged Sh850 billion.
For Dr Magufuli, who died at about 6pm at Mzena Hospital in Dar es Salaam, to take revenue collection up, he had no option, but taking tough measures such as sealing tax evasion loopholes, a move that left severe pains to unscrupulous traders and investors.
The decision was at the expense of the country’s interests and that is why it was greeted with cheers by the patriots who really understood that the President’s intention was to take Tanzanians to the promised land flowing with milk and honey.
Dr Magufuli, the first Tanzanian President to die while in office, was using mostly locally sourced revenue to finance development projects, notably infrastructure which are a catalyst for boosting economic activities and transforming the economy.
While some praised him for it, critics were opposing Dr Magufuli for investing in material things, while leaving people with empty pockets.
Dr Magufuli launched a crackdown on graft and tax evasion when he took office in 2015 and has sacked dozens of senior public officials.
However, some businesses, though, say they have been unfairly hit with high tax bills.
Dr Magufuli is on record as directing TRA to mend the way they were operating by embracing a fair, simple and friendly tax system to encourage tax compliance and boost revenue collection.
He termed the taxation system as complex and full of loopholes and tax breaks that mostly benefit the wealthy. He said that was not healthy for the development of the country.
And, it was on these grounds, President Magufuli last month warned TRA to stop frustrating traders and investors through unrealistic tax estimates, saying it was unhealthy for the development of trade and investments.
Addressing a public rally at Mnazimmoja grounds here in the city last month, he said as a result of over tax estimates, some traders were opting for closing down businesses, while others had to find other unacceptable ways round to pay tax.
President Magufuli had also been challenging the taxman to broaden the tax base with a view to increasing revenue collection instead of only milking a few.
Large and medium-scale firms are the main source of tax revenue for the government because Tanzania has a large informal economy that goes untaxed.
In 2019, Dr Magufuli expressed dismay over the unsatisfactory performance of TRA, noting that it was collecting taxes from only 2.7 million Tanzanians out of over 55 million.
He said with a trend, the taxman would continue to squeeze a few taxpayers, instead of broadening the tax base and setting favourable rates that can serve as an incentive for many people to pay taxes.
To get the right formula for him to realise his goal of increasing revenue, you will realise that President Magufuli changed commissioners general at TRA on several occasions compared to his predecessors.
During Dr Magufuli’s five years and 114 days as president, TRA has had a total of five commissioners general.
He came to power at a time when the taxman was Mr Rished Bade.
From the removal of Mr Bade, President Magufuli appointed Dr Philip Mpango to head the tax collecting body, before moving him to the Finance and Planning ministry as the minister.
From there, Mr Alphayo Kidata, who was previously permanent secretary in the Ministry of Land, Housing and Human Settlements Development, was appointed the new TRA commissioner general in December 2015.
In March 2017, Mr Kidata was moved to become permanent secretary in the President’s Office and the TRA commissioner general’s post was filled by Mr Charles Kichere.
In June 2019, Mr Kichere, who is currently the Controller and Auditor General (CAG), was to be replaced by the current commissioner general, Dr Edwin Mhede.
It was under the leadership of the current commissioner general that TRA wrote a new history in revenue collection by collecting Sh2.088 trillion per month,
The reasons for achievements, according to Dr Mhede, were the enforcement of existing laws and regulations and managing tax evasion loopholes.
Others are education to taxpayers, regulating the provision of Electronic Fiscal Device (EFD) receipts and improving services.
Also in a bid to attract tax compliance, a number of reforms including the implementation of the blueprint for improving Tanzania’s business climate were undertaken under Dr Magufuli’s regime.
During his time as President, some 173 fees and charges in different sectors were scrapped.
He also attempted at ensuring that petty traders were regulated through issuance of special identity cards to identify them.
No comments :
Post a Comment