Tanzania’s first-half 2016/17 tax revenues up 12.7 pct

Tanzania’s tax revenues rose 12.7 percent in the first half of the fiscal year from the same period a year ago as collection improved, the Tanzania Revenue Authority (TRA) said on Wednesday.

Tanzanian President John Magufuli began a reform drive after he was elected in late 2015, promising to transform the East African economy and curb corruption and tax evasion.

A new tax drive aimed at weaning Tanzania off international aid has raised government revenues but drawn complaints from some businesses, who say it targets them unfairly.

“In the first six months of 2016/17 (July-December) TRA collected a total of 7.27 trillion shillings ($3.26 billion) compared to 6.44 trillion shillings collected in the same period in the 2015/16 financial year,” the authority said in a statement, putting the increase at 12.74 percent.

Tanzania aims to collect a total of 15.1 trillion shillings from tax revenue in 2016/17, equivalent to 13.8 percent of gross domestic product, up from an estimated 12.6 percent of GDP in 2015/16.

Tanzania's President John Pombe Magufuli
Tanzania’s President John Pombe Magufuli

Businesses in Tanzania complain of higher tax bills, which they say were instigated as part of the president’s drive to overhaul the economy.

Magufuli’s government raised taxes last year on mobile money transfers, banking, tourism services and cargo transit services.

Big companies are the main source of taxes, mainly because of huge informal economy.

A government tax tribunal in April accused Acacia Mining, formerly known as African Barrick Gold, of tax evasion and ordered the London-listed company to pay $41.25 million. Acacia denied the allegations and said it would appeal.

In November 2015, just weeks into office, Magufuli suspended six tax officials, including the head of the revenue authority, pending an investigation into claims of corruption.

The suspension of TRA chief Rished Bade and five others followed allegations of rampant tax evasion at the main port of Dar es Salaam.

According to a World Bank study, inefficiencies at the port cost Tanzania and neighbours served by the port up to $2.6 billion a year. ($1 = 2,230.0000 Tanzanian shillings)

Source: Reuters