AN integrated domestic revenue administration system (IDRAS) will start being used by the Tanzania Revenue Authority (TRA) early next year to address tax mismatch issues and boost confidence among taxpayers

Yusuph Mwenda, the TRA commissioner general, made this affirmation during a meeting with chief executive officers of financial institutions chaired by Bank of Tanzania (BoT) governor Emmanuel Tutuba in Dar es Salaam yesterday

The IDRAS is designed to improve transparency and accuracy to minimize errors in tax administration, he said, seeking to assure taxpayers that TRA is addressing key challenges.

“We are ready to eliminate them to restore confidence and increase financial inclusion," he said, elaborating that the new system is crucial to ensure that taxpayers no longer face the tax mismatch inaccuracies they have been encountering.

The meeting was intended to find ways to streamline tax collection by strengthening the use of financial institutions for that purpose as a business opportunity, he said.

TRA envisages that reluctant taxpayers will face a final measure involving working with bank agents but other steps would be taken first as engaging bank agents will not be done without first issuing a demand note, a formal request for payment, followed by a reminder note, he explained. 

“We will meet with the taxpayers, listen to their concerns, and offer options for instalment payments,” he said, elaborating that only after these steps will we consider issuing a letter of intent to use banks as agents but even then such a measure will have to be approved by the commissioner general personally.

TRA expects to avoid reaching that stage as the process will be lengthy to engage both for the TRA and the taxpayer, he declared, assuring the CEOs other methods would be explored to resolve tax disputes.

TRA in collaboration with banks, would ensure the safety of customers’ funds throughout the process, emphasizing that TRA will work with taxpayers to build relationships and find mutually agreeable ways for them to settle their debts. 

“We will also encourage them to continue using banking services as this will help them qualify for larger loans to grow their businesses,” he remarked, while the BoT

governor said the discussions aimed to improve the business environment.

They were also targeted at empowering financial institutions to support commercial activities, thereby increasing tax revenue as banks are among the largest taxpayers and serve as agents for tax collection, being custodians of taxpayer funds.

Theobald Sabi, the National Bank of Commerce (NBC) managing director and Tanzania Banking Association (TBA) chairman, expressed satisfaction with the discussions involving TRA and BoT to address tax issues and outline future steps.

TBA will encourage clients to stick to depositing funds in banks and increase confidence in using formal financial systems for business transactions, he added.