TIC: TRA tactics scare away investors

26Apr 2019
Crispin Gerald
The Guardian
TIC: TRA tactics scare away investors

EXECUTIVE Director of the Tanzania Investment Centre (TIC) Geoffrey Mwambe yesterday accused the Tanzania Revenue Authority (TRA) of discouraging investments in the country through harsh tax collection methods.

EXECUTIVE Director of the Tanzania Investment Centre (TIC) Geoffrey Mwambe.

Speaking to reporters in Dar es Salaam, Mwambe who is also a member of the TRA Board of Directors said officials from the central government revenue collection agency have in recent years been closing businesses said not to be paying taxes in different parts of the country instead of engaging them to know the challenges they face.

The ‘money or padlock’ approach, Mwambe said, is discouraging local and foreign investors and scaring away potential entrepreneurs who wish to set up businesses in the country.

“The TRA approach of closing businesses exacerbates the burden of non-performing loans for commercials banks, leading to higher interest rates by financial institutions,” he declared.

The director said a number of government agencies have been doing a great job with a view to making Tanzania a destination of choice for investors but these efforts were being stifled by unfriendly tax collection methods.

“President John Magufuli recently appreciated our efforts in attracting investors but our work is being hindered by methods used by other government agencies such as TRA,” he emphasized.

The best way to address the challenge of taxes is to hold consultation with traders and investors to discuss ways to settle the problems, he said, elaborating that it is disappointing to note that traders and investors are being remanded for a long time without any case and later released without compensation. 

Closing of business should be a last option after all processes prove futile, he said, insisting that the mandate of closing the business remain with the Commissioner General of TRA and not any other officer.  

“We need to have a vision of facilitating and promoting investment in the country rather than be an obstacle to investors,” he argued.

“But also we need to encourage taking up investment opportunities in order to create employment   to youth that will help to raise per capita income,” he said.

The government is striving to encourage investment purposely to expand the volume of revenue collection in order to reduce the dependency ratio to funds from abroad, he stated. 

Mwambe emphasized that President Magufuli was saddened by the report he received from ambassadors and high commissioners who informed him about services provided by several government institutions as being unfriend to foreign investors.

He proposed that executives in government institutions work to enhance awareness to taxpayers instead of frustrating them by closing their businesses.  

From the past month to the present, TIC has managed to register 80 investment projects with a total value of US$383.2million, out of which 49 projects are industrial and the rest in the agricultural sector. 

Institutions responsible for facilitating the provision of land to investors need to speed up the process in order to encourage timely investments, he said.

 TIC has so far issued 892 residence permits together with 1,076 work permits to investors in recent months, he added.

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