'TANZANIA BEST EA TAX COLLECTOR, LEAST IN SOCIAL SERVICES DELIVERY'
At
44.3 per cent, Tanzania’s performance in tax collection in the East
African region has been rated best for this year, surpassing all its
neighbours and a number of other African countries.
Better still, this is above 40.9 per cent for the world average and well below 46.6 percent for Africa.
However analysts say this appealing performance is quite contrary to social services delivery by public institutions.
According to PWC, the issuer of the report, there are many other African countries which did not manage to reach the 44.3 percent mark.
According to the report, ‘Paying Taxes 2014,’ released yesterday Kenya, Uganda and Rwanda registered 38.1, 36.5 and 33.3 percent respectively.
Presenting the report in Dar es Salaam, Neville Howlett, who is PWC Tax Director External Relations, said the key differentiating aspect with other countries in the region is the high level of labour taxes charged.
“For example employers in Tanzania are subject not only to employer social security contribution but also to a “skills and development” levy on payroll costs which other countries do not have,” he said.
He said the report shows total tax rate also contributed by Revenue Gateway System launched in July 2013 which allows people and companies to pay taxes through banks and mobile phones something which enables multiple tax payments to be made.
Further, the report shows that Africa emerged the third continent by having an average of 36.2 percent of total tax rate, where Europe was first with a total tax rate of 41.0 percent, followed by North America 38.9 percent, Asia and Pacific 25.4 percent and Middle East 24.0 percent.
However the report shows that some African Countries which have a high rate of total tax like Eritrea 83.7 percent, Central African Republic 73.3 percent, Algeria 72.7 percent, Mauritania 72.3 percent, Guinea 68.3 percent, Chad 63.5 percent, Gambia 63.3 percent, Benin 63.3 percent, Tunisia 62.4 percent, Republic of Congo 55.2 percent.
Others with low total tax rate are South Africa 29.1 percent, Botswana 25.3 percent, Namibia 20.3 percent, Zambia 14.8 percent and Lesotho 13.6 percent.
The report states that Electronic filing of tax returns is currently limited to Value Added Tax (VAT) returns only, but anticipates that in due course the ability to file electronically will also be extended to other tax returns.
Where electronic filling and payment for a tax is available and is used by majority of companies, it will be interesting to see reforms in this area can successfully be implemented and used by the majority of businesses, he said.
Howlet concludes that the government however has to do some improvements in tax payment by centralising power of collecting tax and revenue to one body (TRA) and not multiple bodies, something which will ease the task of monitoring all taxes.
He said despite the country being shown good results in tax rate but more improvement is needed including that of giving power to the Tanzania Revenue Authority to collect all taxes and revenues.
Despite this achievement in tax collection by government, taxpayers have been lamenting that the social services delivered are not commensurate to the contributions they make.
Health facilities have been going without drugs or equipment, while schools have been operating without desks classrooms and many roads remain rough, so they say.
Water provision remains a problem in many areas, while only 14 percent of Tanzanians have access to electric power, they say.
Tanzanian taxpayers have also raised concerns on massive amount of public money being stashed out of the country, misuse of government revenue and outright theft and embezzlement of the same.
Better still, this is above 40.9 per cent for the world average and well below 46.6 percent for Africa.
However analysts say this appealing performance is quite contrary to social services delivery by public institutions.
According to PWC, the issuer of the report, there are many other African countries which did not manage to reach the 44.3 percent mark.
According to the report, ‘Paying Taxes 2014,’ released yesterday Kenya, Uganda and Rwanda registered 38.1, 36.5 and 33.3 percent respectively.
Presenting the report in Dar es Salaam, Neville Howlett, who is PWC Tax Director External Relations, said the key differentiating aspect with other countries in the region is the high level of labour taxes charged.
“For example employers in Tanzania are subject not only to employer social security contribution but also to a “skills and development” levy on payroll costs which other countries do not have,” he said.
He said the report shows total tax rate also contributed by Revenue Gateway System launched in July 2013 which allows people and companies to pay taxes through banks and mobile phones something which enables multiple tax payments to be made.
Further, the report shows that Africa emerged the third continent by having an average of 36.2 percent of total tax rate, where Europe was first with a total tax rate of 41.0 percent, followed by North America 38.9 percent, Asia and Pacific 25.4 percent and Middle East 24.0 percent.
However the report shows that some African Countries which have a high rate of total tax like Eritrea 83.7 percent, Central African Republic 73.3 percent, Algeria 72.7 percent, Mauritania 72.3 percent, Guinea 68.3 percent, Chad 63.5 percent, Gambia 63.3 percent, Benin 63.3 percent, Tunisia 62.4 percent, Republic of Congo 55.2 percent.
Others with low total tax rate are South Africa 29.1 percent, Botswana 25.3 percent, Namibia 20.3 percent, Zambia 14.8 percent and Lesotho 13.6 percent.
The report states that Electronic filing of tax returns is currently limited to Value Added Tax (VAT) returns only, but anticipates that in due course the ability to file electronically will also be extended to other tax returns.
Where electronic filling and payment for a tax is available and is used by majority of companies, it will be interesting to see reforms in this area can successfully be implemented and used by the majority of businesses, he said.
Howlet concludes that the government however has to do some improvements in tax payment by centralising power of collecting tax and revenue to one body (TRA) and not multiple bodies, something which will ease the task of monitoring all taxes.
He said despite the country being shown good results in tax rate but more improvement is needed including that of giving power to the Tanzania Revenue Authority to collect all taxes and revenues.
Despite this achievement in tax collection by government, taxpayers have been lamenting that the social services delivered are not commensurate to the contributions they make.
Health facilities have been going without drugs or equipment, while schools have been operating without desks classrooms and many roads remain rough, so they say.
Water provision remains a problem in many areas, while only 14 percent of Tanzanians have access to electric power, they say.
Tanzanian taxpayers have also raised concerns on massive amount of public money being stashed out of the country, misuse of government revenue and outright theft and embezzlement of the same.
SOURCE:
THE GUARDIAN
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