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CAG offers TRA advice on better tax collection

3rd March 2012
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Controller and Auditor General Ludovick Utouh (L) and other top government officials listen tentatively to a presentation during a consultative forum in Dar es Salaam yesterday. (Photo: Omar Fungo)

Despite the achievement by the Tanzania Revenue Authority (TRA) there is a need for it to modify its domestic tax collection system for more revenue, Controller and Auditor General (CAG) Ludovick Utouh has said.

The strategy would help reduce donor dependence, boost domestic tax collection and the government’s capacity to finance national development programmes, Utouh said at a consultative forum held in Dar es Salaam yesterday.

Over time according to him, TRA has been reporting an over-performance in tax collection which implies that the revenue budget did not exhaust all the potential sources.

“Revenue collection is very important in ensuring that the government will be able to finance its operations without depending on donor assistance. The question to ask is what should be done to collect more revenue for the government?” he queried.

Donor dependence was expected to increase marginally for revenue from grants and loans to 29 per cent of the 2011/12 total annual budget, according to Utouh.

“The analysis of how the budget is financed highlights the need to modify and improve domestic revenue sources on the part of TRA,” he noted.

He said there are many areas and issues which must be handled differently to bring a difference to the country’s economic growth.

The economy is estimated to attain real GDP growth of 7 percent in 2010 up from 6 percent in 2009.

CAG said the government must improve revenue potentials, expenditure patterns and address the issue of infrastructure system especially railways for the betterment of economic development.

He called upon development stakeholders and experts to come up with recommendations on what the government should do to provide better services to taxpayers and ensure economic growth.

In another development, the CAG said both internal and external public audits can help promote better management and effective use of taxpayer’s resources because they have direct and positive influence on the way institutions and people discharge their responsibilities.

“Public audit is not only confined in issuing and auditing opinions on financial statements prepared by public bodies, but also covers such issues as regularity, propriety and value for money…and this contributes to corporate governance arrangement of the government itself and the public bodies under it,” he said.

For her part, the dean of University of Dar es Salaam’s (UDSM) Business School Dr Marcellina Chijoriga, said the government needs to review strategies used in tax collections noting that the current system sidelined majorities from paying taxes despite the fact that they remained dependent on services provided by the same.

She said only a few citizens pay tax, while the majority is left untouched. She added that such disproportions create inequality of social services in the country and also retard economic growth.

“The government needs to go further by either reviewing its laws which hinder effective development,” she said.

The consultative forum was designed to discuss how efficiently government resources can be harnessed and utilised for the betterment of the country’s economy and people’s prosperity.

SOURCE: THE GUARDIAN
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