Tanzania Revenue Authority (TRA) is to embark on execution of its Fourth fiveyear Corporate Plan spanning between 2013/14 and 2017/18 fiscal years, with the aim of doubling tax collections from 9.5tril/- to 18.8tril/-.
Tanzania Revenue Authority (TRA) Commissioner General Harry Kitilya
The government’s tax collection agency envisages increasing tax collections in the five-year period by 98 per cent while gradually boosting the revenue yield from 17 to 20 per cent. Implementation of TRA third Corporate Plan, which started July 2008 through June 2013, contributed to the increase in revenue collections from 4tril/- in 2008/09 to 8tril/- in the 2012/13 fiscal year, an increase of 78.6 per cent.
TRA Commissioner General Harry Kitilya describes the agency’s performance as exemplary, noting that the Management managed to strike a balance between increasing revenue collections and undertaking reforms.
“The good performance proves TRA resilience that performed relatively well – at 90, 91 and 94 per cent – during the global financial crisis between July 2008 and June 2011,” says Mr Kitilya, adding that during the period under review, revenue yield increased from 15.3 to 16.6 per cent amid declining collection costs from 3.8 to 2.1 per cent.
The Fourth Corporate Plan, which the Commissioner General says has been built over the achievements gained from the preceding plan, desires to address the prevailing challenges for continual improvement. The new plan is based on three strategic themes – convenience, compliance and continual improvement – which will guide the agency towards achieving its vision to increase revenue to GDP ratio to 19.9 per cent by 2018.
The plan also focuses on boosting contributions of domestic revenues from the current 62 to 70 per cent as contributions from international trade taxes keep on declining due to regional groupings – East African Community (EAC) and SADC. Overall revenue collections will have to increase significantly to reduce donor dependency as most of the development partners reduce their support to developing countries’ budgets due to the financial crises that they experience.
Mr Kitilya underscores the need for the government to become self-reliant through increased mobilisation of domestic revenues. The total strategic expenditure for execution of the fourth corporate plan initiatives is estimated at 102bn/- whereas total expenditure – payrolls, capital and other administrative costs – for the five-year period is 1,321bn/-.
Cost of collection – the ratio of total expenditure to revenue collection – will decrease from 2.7 to 1.6 per cent during the period. TRA’s first corporate plan focused on institutional and capacity building while the second and third plans focused on integration of domestic operations and operational automation for enhanced efficiency, respectively.
During the third corporate plan, the tax collection agency managed to increase average monthly revenues from 338bn/- in 2008/09 to 669bn/- in the 2012/13 financial year. TRA Zanzibar also performed well during the third corporate plan, raising monthly tax collections from 4.5bn/- to 8.9bn/- during the period under review. The implementation of the third corporate plan saw TRA continuing with modernisation of its operations by embarking on automation of key tax administration processes.
The move enabled the authority to transform from manual to automated business operations, leading to great efficiency. No wonder TRA won the first prize in the 2010 African Association for Public Administration and Management (AAPAM) Award in innovation in management and service delivery.
The global and macroeconomic environment – the Millennium Development Goals (MDGs), National policy documents like Vision 2025, National Strategy for Growth and Reduction of Poverty Phase Two for Mainland and Zanzibar (MKUKUTAII and MKUZAII) and the Five Year Government Development Plan—guide TRA vision.
Determined to achieve the government target of increasing domestic revenues and revenue yield to the standard of Sub-Saharan Africa, TRA will in the next five years increase revenue yield to 19.9 per cent through improved efficiency in tax administration and widening the tax net to capture revenues from specialised sectors – mining, oil and gas, telecommunications, tourism, construction, real estate, finance and informal sector as well.
The fourth corporate plan forecasts agriculture to pick up to a five per cent growth while manufacturing’s target is 14.5 per cen. Other sectors with their expected growth rates in brackets are service (8.8 per cent); transport (7.8 per cent); communications (18.7 per cent); finance (12.6 per cent) and real estate (6.2 per cent).
The macro-economic outlook assumes that real GDP will grow at an average rate of 8.3 per cent while inflation and GDP growth rates are put at 5.3 and 14.4 per cent, respectively, throughout the plan period. Contribution of international trade taxes is projected to fall gradually from 38.1 to 33.1 per cent during the plan period, the trend that will put pressure on domestic tax revenues through identification of new sources and registration of more taxpayers to compensate for the estimated revenue losses.
The National ICT Broadband Backbone will go a long way to support TRA ICT investment and provide prompt electronic services to taxpayers. The operationalisation of the National Identity Cards will improve the identification of taxpayers through a unique number, enabling data matching with other institutions for taxation purposes. Service improvements will be based on the requirements of the various taxpayer segments.
In line with these initiatives, TRA will do a rebranding exercise to improve its image as projected by taxpayers. Staff empowerment will be given priority to enable employees make informed, consistent and fair decisions to improve service delivery. TRA has identified eight core processes – taxpayer registration, tax assessment, tax payment and accounting, debt management, audit and investigation, objections and appeals, taxpayer service and education, research and innovation management – that guide its overall operations.
Source Tanzania Daily News
