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Outsource legal services for tax suits, TRA urged

19th April 2012
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PAC committee chairman John Cheyo

The Public Accounts Committee (PAC) has advised the Tanzania Revenue Authority (TRA) to outsource legal services to deal with civil cases in which more than 13.24bn/- in government revenue is at stake.

Tabling his report for the year ending 2009/2010, the committee chairman John Cheyo said TRA was facing several civil suits in courts which to date remain unresolved.

“If the TRA fails in these cases, then the government will lose this huge amount of money in revenues. We advise the authority to outsource legal services so as to tackle the cases more effectively,” said Cheyo.

The committee chairman said when going through the authority’s audit, a total of 181.3bn/- and USD 47.3m had not been paid to TRA from various people, due to the authority’s failure to exert more efforts in revenue collection.

He said the committee advised the authority to improve its revenue collection system to help reduce dependency of the budget on external resources.

He said there was need for the government to ensure that all revenue is collected. “We want legal measures to be taken against individuals, private institutions and companies which evade taxes,” said Cheyo.

The PAC chairman said fraud and other loopholes that allow for people to avoid paying tax has caused the government loss of 15.43bn/- and USD 2,6m.

“This is the amount which TRA wants to bring in this House to be canceled from the audited books. This is a huge amount of money. We want the government to take to task all those who were involved in the loss of such amount of money,” said Cheyo.

The chairman said internal revenue was important for the development of the country, but the Controller and Auditor General’s report indicated that TRA had not met the target according to the financial year ending June 2010.

“The authority failed to meet its target by about 8 percent which is equivalent to 391.41bn/-. It collected 4.64trn/- when the target was to collect 5.03trn/-,” said Cheyo.

The committee has advised the government to reduce tax exemptions as much as possible to widen collection of revenues in the informal sector.

It also called on the TRA to ensure that its revenue collection targets are more realistic.

“We want to see internal monitoring system within the authority strengthened to establish loopholes that allow people to avoid paying tax,” said Cheyo.

He also called on the government to investigate TRA to establish the reasons for its failure to meet targets.

“We want the government through the TRA to increase revenue collection from its minerals, gas, uranium, mobile companies, fisheries sector, agriculture and livestock,” said Cheyo.

SOURCE: THE GUARDIAN
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