The Tanzania Revenue Authority (TRA), in collaboration with the International Growth Centre (IGC) based in the United Kingdom, has introduced a system to monitor electronic fiscal devices (EFD) machines, which are considered the remedy for businesses avoiding the use of these machines.

Through this system, the performance of all EFD machines will be closely monitored. If there are any irregularities in issuing receipts, the business owner who owns the respective machine will be traced, and legal action will be taken against them.

For a long time, the government has expressed concern about businesses evading taxes by either not issuing receipts for goods or services provided, or by providing incomplete receipts.

This practice deprives the government of revenue from taxes, hindering tax collection efforts and economic growth.

During her address to the Eid El Fitr Council on April 10, 2024, President Samia Suluhu Hassan expressed her disappointment with businesses engaging in tax evasion, despite the government refraining from enforcing oppressive taxes to provide fair opportunities for tax compliance.

President Samia stated that when her government took office on March 19, 2021, it aimed to avoid oppressive taxes. However, some businesses are now engaging in fraudulent practices by withholding government revenue.

In line with this, on Wednesday, May 14, 2024, TRA’s Director of Research and Policy, Ephrahim Mdee, announced that the authority, in collaboration with the International Growth Centre (IGC), has developed a system to monitor receipt issuance on a daily basis.

“This dashboard allows us to track each machine individually. Therefore, we are aware of the number of receipts issued by each machine daily, and if there are discrepancies, we investigate the reasons. This gives us the ability to enforce tax laws against those who do not use the machines correctly,” said Mdee.

Responding to this initiative, the Chairman of the Tanzania Business Community, Khamis Livembe, stated that legitimate businesses have no reason to evade taxes because they understand the importance of taxes in economic development and national governance.

“Taxes are the foundation of a country’s development. If a business is legitimate, it should not evade taxes. Those who evade taxes are thieves, and appropriate action should be taken against them,” said Livembe.

The Executive Director of IGC, Professor Jonathan Leape, stated that this monitoring aims to assist TRA and Tanzania as a whole in increasing domestic revenue collection for national development.

In terms of government stance, the Commissioner for Foreign Finance of the Ministry of Finance, Rished Bade, affirmed that the government will continue to create favorable and easy business environments for tax payment and collection.

“This research enables TRA to improve its tax systems, establish tax laws that protect government revenue, and make it easy for citizens to comply with taxes without any opportunities for tax evasion,” said Bade.

The Secretary-General of the Planning Commission, Lawrence Mafuru, emphasized that the collaboration between TRA and IGC will bring significant benefits, especially at a time when the country is developing a new national vision that will require funding for its implementation.

This meeting brought together tax researchers from various East African countries, including representatives from the Research on Poverty Alleviation (Repoa) Institute.

The Executive Director of Repoa, Dr. Donald Mmari, explained that experts from these countries will share experiences on key areas of tax collection, broaden the taxpayer base, and enhance innovation in tax management.

“Without adequate tax collection, these countries cannot grow or solve their fundamental challenges. In many African countries, tax revenue collection is below 16%, with Tanzania having a collection rate of 11.8%,” said Dr. Mmari.