Tanzania: President Kikwete directs on EFD tax machine use/price is main issue


27 April 2014

DAR ES SALAAM, Tanzania – Traders in the country will have no room to escape the use of Electronic Fiscal Devices (EFDs). President Jakaya Kikwete has directed the tax authority to ensure the business people use the device.

Tanzania Revenue Authority (TRA) has been involved in fights with traders who have objected from using the device on various claims. Some decry the high cost of buying the device saying the returns earn after using it are low.
The Tax Authority had introduced the use of the EFDs for issuing receipts and invoices for every sale made aiming at collecting tax efficiently from the traders. It started implementing the second phase of EFDs in 2013 with the aim of boosting revenue collections and simplifies tax collection. According to the authority the second phase will include non VAT registered traders who have a turnover starting from Tsh14million ($8,358) onwards.
When visiting Karatu district recently, President Kikwete told the TRA management to hold discussions with traders and find solutions to the issues they have raised. Issues that traders raised and which later triggered protest in various regions in the country against the use of EFDs include high prices of purchasing the devices which range between Tsh600, 000 ($358.188) to over Tsh700, 000 ($417.885) are among the issues of concern.
But TRA told traders the amount will be compensated through tax deduction.
The other claim by traders is their understanding about what recorded (sales) is and what not recorded (expenses) is by the machines. President Kikwete in his statement said the government will not retreat on the use the EFDs.

He said: “I know there are a lot of issues raised concerning the machines. But my advice is that you discuss the problems and find solutions. If the problem is price, it should be resolved. We need this system for efficient collection of tax. We cannot retreat on this. Doing so is the same as going backwards since the whole world including all our neighbours have started implementing or are preparing to establish this system.

Source: Business Week