Govt tightens payments loophole

19Mar 2016
Our Reporter
The Guardian
Govt tightens payments loophole

The government has insisted that all of its entities should channel payments to their patrons through interbank settlement system for high value processes as well as timely and sensitive payments basis.

Dr Servacious Likwelile

The move is closely being related to a system in which most multilaterals deals with their clients when issuing payments is said to foster professionalism and transparency.

Finance and Planning Permanent Secretary Dr Servacious Likwelile has made a reminder to all ministries, regional treasury and secretariat offices in the mainland to ensure they embark into full use of the so called Tanzania Interbank Payments System (TISS).

Other entities, according to the PS, includes government departments that makes payments through Central Payments Office (CPO) at the treasury, all pension payments to retirees, anti- money laundering unit, parliament and judiciary funds.

According to the PS, the government motive is to ensure that all municipal councils in Dar es Salaam should adopt the use of TISS by end of April this year.

“All clients working with the city council, and its municipal councils of Kinondoni, Temeke and Ilala have to ensure they have proper records as required under the new system to enable payments through TISS,” Dr Likwelile said in a statement issued mid this week.

The system facilitates settlement of interbank fund transfers, cheques and electronic funds transfer clearing obligations, payment card switch balances and money market transactions. The system is owned and operated by the Bank of Tanzania.

The new system would require companies and individuals doing business with the said councils to submit their bank and business information to be entered into the integrated financial management system (IFMS).

The PS said this system would be gradually absorbed into other local government councils to ensure that work and payments are done in an efficient, professional and transparent manner.

A payment sent through TISS is processed on real time, and therefore the beneficiary is assured of receiving the funds on the same day, hence an easy and convenient way of sending high value and time sensitive payments.

TISS reduces risks associated with physical movement of cash between the sender and the beneficiary and is cost effective.

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