New Technology to Boost Tanzania’s Tax Revenues

May 2, 2013 Taxation in Tanzania

Sales RecieptsDAR ES SALAAM – Tanzania’s tax authorities will make greater use of innovative technology in an effort to ensure that neither individual taxpayers nor businesses are dodging their tax obligations.

On May 1st the Tanzanian Revenue Authority (TRA) announced that it has launched its revamped website, with new online tools intended to ease the process of filing tax returns electronically, and the tax authority has stated that more businesses must now use Electronic Tax Register (ETR) devices in order to eliminate attempts of sales tax evasion.

ETR devices are used at the point of sale in businesses in Tanzania to count the number of sales made per day, to calculate the value of the sales and taxes owed, to provide customers and businesses with appropriate receipts, and to automatically transmit the full set of data to the TRA.

Previously only businesses earning more than TZS 40 million (approx. USD 25 000) per year were required to use the ETR devices, however, from May 15th all businesses earning in excess of TZS 14 million (approx. USD 8 700) will need to install and utilize the automated machines.

Any businesses caught bypassing the ETR system will be issued a fine of TZS 3 million (approx. USD 1 860) or twice the amount of the taxes evaded.

It is expected that the new requirements will increase collections of sales tax by almost TZS 200 billion (approx USD 125 million) per month from its current level of TZS 400 billion (approx. USD 250 million) per month.

The expansion of the ETR system goes hand in hand with a recently implemented initiative by the TRA, under which the government runs a nationwide lottery, with the winning numbers being selected from among the receipts which have been issued over the course of the month.

Photo by patrick h. lauke