Tanzania: Use of EFDs doubles revenue collection – TRA
11 August 2014
The Tanzania Revenue Authority (TRA) has reported more than double increase of revenue collections in just three years, an achievement the agency is associating with increased use of Electronic Fiscal Devices (EFDs).
TRA says the business community in the country is now increasingly more complacent with the use of EFDs which they had previously rejected.
“The growing willingness of businesses to use EFDs is a direct result of awareness campaigns along with enforcement efforts conducted throughout the country,” TRA Director for Tax Services and Education, Richard Kayombo explained. “As a result, between July 2010 and June 2013 we have seen our revenue collection increase by 59 per cent,” he revealed in an interview with this paper at the turn of the week.
The Director for Tax Services and Education said now that they are better informed, response to the use of machines by the business community’s is very positive.
“We have had a number of workshops with members of the business community on the importance of the machines and the response is increasingly positive,” he said. “Though we do not have the exact figures, as to the increase value but more and more businesses are using EFDs and revenue collections are also increasing,” Kayombo said noting that the system will continue to increase revenue collections as the number of traders using it continues to grow.
He said the authority is currently targeting to enlist at least 200,000 traders in the second phase of their awareness campaign which started late last year.
However, other than the efforts by the authority, Kayombo acknowledged that sustainable use of EFDs is also very much dependant on consumer’s ability to demand for receipts for every purchase done.
The use of EFDs previously received wide spread rejection by traders countrywide. In February this year, shops in Dar es Salaam’s Kariakoo, Mwanza, Morogoro, Mbeya and Kagera regions remained closed for at least two full days, that being one of many previous protests against the EFDs.
Speaking to journalists in Dar es Salaam during that protest period, Dar es Salaam Business Community (JWK) Chairman Johnson Minja had at the time said the traders are not against paying taxes but rather they are against the method being enforced on them.
“The EFDs are not friendly to traders,” he argued warning that “… the Value Added Tax (VAT) of 18 per cent is too high and can lead to businesses folding up.”
Also at that time, the Kagera Region Business Community Chairman Amini Kyaruzi told a news conference in Dar es Salaam that the community had been urging the traders not to protest without success.
“The government should ensure it creates a friendly environment with traders,” he said.
Commenting, a Mwanza based businessmen Ngowi Miwani said: “This is a very bad system and if the machines are to be used businesses will collapse and the economy of the country will fall.”
As the protest went on, complacent traders were increasingly threatened by others and the Mwanza Regional Commissioner Evarist Ndikilo was forced to order police protection for them.
“Those who do not want to use the devises should not intimidate those who are ready to use the EFDs,” he said.
Similar incidents were reported in Morogoro, Mbeya and elsewhere in the country despite legal requirement on the use of the EFDs.
In response, TRA conducted various awareness campaigns to increase the knowledge of business communities across the country on the use and benefits of EFDs, efforts which are now seen to bear good fruit.
SOURCE: THE GUARDIAN