One of the biggest tasks facing Tanzania’s recently launched Tax Reforms Commission will be to resolve complaints about weaknesses and malpractices in tax administration that came to a head about four months ago, when domestic and foreign investors confronted the government demanding action.
The nine-member team has only just got down to business after being officially flagged off on October 4, long after President Samia Suluhu Hassan appointed it on July 31, and as a result it may find its work more difficult due to recent developments.
Several key government officials involved in talks with local traders over constant clashes with the taxman, and who the investors through diplomats in Tanzania had asked specifically to be present at the roundtable have since been replaced by newcomers who are still settling in.
The commission’s mandate covers a review of the country’s entire taxation regime and conducting fresh assessments of disparities in rates imposed by the Tanzania Revenue Authority (TRA) on taxpayers at all levels, fines for non-compliance, and matters of transparency in relation to TRA’s collection system.
The overall aim is to strike a balance between the interests of taxpayers and tax collectors in compliance with existing laws while maintaining the business and investor-friendly environment that the Samia administration has painstakingly strived to rebuild after a period of tight shackling under her predecessor John Magufuli.
Former State House chief secretary Ombeni Sefue will lead the task force, which also includes former central bank governor Prof Florens Luoga, former chief government auditor Prof Mussa Assad, and former TRA commissioner-general Rished Bade.
Other members, drawn from the private sector, are Leonard Mususa, Aboubakar Mohamed, Mwanaidi Sinare Maajar, David Tarimo and Maimuna Kibenga.
No deadline has been announced for the team to conclude its assignment and submit a report.
The commission’s formation is the result of rising discontent over questionable taxation practices that bubbled over mid-June, when traders at Kariakoo in Dar es Salaam and other major urban markets went on strike for several days, protesting harassment by TRA compliance inspectors caused by the perceived lack of transparency.
The go-slow happened at a particularly bad time for the ruling establishment, with elections around the corner, and prompted government to temporarily defuse tensions through a series of persuasive talks with traders’ representatives in the administrative capital Dodoma.
Around the same time, on June 26, ambassadors and high commissioners from 10 countries based in Tanzania wrote to the then Foreign Affairs minister January Makamba requesting a formal meeting with relevant high-level government officials to address similar investor grievances over TRA’s conduct.
The envoys’ letter cited, among other things, “unevidenced” tax notices demanding payments and account reconciliations dating back 15 years, extraordinary tax bills not supported by law, and TRA’s rejection of tax concession agreements with the Tanzania Investment Centre — another state agency — on the grounds that they had not been gazetted.
The envoys who signed the petition were from the United States, Canada, Britain, Ireland, Germany, France, Belgium, the Netherlands, Sweden and South Korea.
They quoted investors’ claims that TRA agents were threatening them directly with actions such as “freezing or seizure of their assets and bank accounts without notification nor timely legal recourse” if they protested or appealed.
Among officials whose attendance they said would be key were the TRA commissioner-general and the minister of industries and trade, posts then held by Alphayo Kidata and Ashatu Kijaji respectively.
Mr Makamba wrote back immediately, pledging to convene the roundtable to address the concerns raised. But shortly after, he, Mr Kidata and Dr Kijaji were removed from their positions, leading to speculation in some quarters that one of the underlying objectives may have been to officially scuttle the meeting before it was held.
The new seat officials, Mahmoud Thabit Kombo (Foreign minister), Yusuph Mwenda (TRA boss) and Selemani Jafo (Industries and Trade minister), are still not settled in their new roles.
The Sefue commission will also be working against the backdrop of new quarterly record figures announced by TRA last week, which indicate that the agency beat its tax collection target for July to September, with Tsh7.79 trillion ($2.88 billion).
In TRA’s statement published on October 1, Mr Mwenda said the new numbers had surpassed annual Q1 revenue collection targets for the first time ever and asserted that they were “partly due to improved tax compliance and effective tax administration.”
TRA has been given a total collection target of Tsh29.41 trillion ($11.31 billion) in the 2024/2025 budget as the country aims to cover 67.4 percent of its Tsh49.35 trillion ($18.98 billion) expenditure plan through domestic financing.
Large taxpayers, including multinational investors, account for between 60- 70 percent of total expected collections.
Share this news
This Year's Most Read News Stories
British Zanzibar Investor stuck in African island ‘hell hole’ prison
Simon Wood, a British Investor in Zanzibar is being held in a “hell hole” prison after being charged with money laundering by police on the paradise island of Zanzibar after he was arrested with his wife Francesca Scalfari. President of Zanzibar, Hussein Mwinyi, to recieve criticism for the couple’s detainment.Continue Reading
Air Tanzania Banned From EU Airspace Due to Safety Concerns
Several airports have since locked Air Tanzania, dealing a severe blow to the Tanzanian national carrier that must now work overtime to regain its certification or go the wet lease way
The European Commission has announced the inclusion of Air Tanzania on the EU Air Safety List, effectively banning the airline from operating in European airspace.
The decision, made public on December 16, 2024, is based on safety concerns identified by the European Union Aviation Safety Agency (EASA), which also led to the denial of Air Tanzania’s application for a Third Country Operator (TCO) authorisation.
The Commission did not go into the specifics of the safety infringement but industry experts suggest it is possible that the airline could have flown its Airbus A220 well past its scheduled major checks, thus violating the airworthiness directives.
“The decision to include Air Tanzania in the EU Air Safety List underscores our unwavering commitment to ensuring the highest safety standards for passengers in Europe and worldwide,” said Apostolos Tzitzikostas, EU Commissioner for Sustainable Transport and Tourism.
“We strongly urge Air Tanzania to take swift and decisive action to address these safety issues. I have offered the Commission’s assistance to the Tanzanian authorities in enhancing Air Tanzania’s safety performance and achieving full compliance with international aviation standards.”
Air Tanzania has a mixed fleet of modern aircraft types including Boeing 787s, 737 Max jets, and Airbus A220s.
It has been flying the B787 Dreamliner to European destinations like Frankfurt in Germany and Athens in Greece and was looking to add London to its growing list with the A220.
But the ban not only scuppers the London dream but also has seen immediate ripple effect, with several airports – including regional like Kigali and continental – locking out Air Tanzania.
Tanzania operates KLM alongside the national carrier.
The European Commission said Air Tanzania may be permitted to exercise traffic rights by using wet-leased aircraft of an air carrier which is not subject to an operating ban, provided that the relevant safety standards are complied with.
A wet lease is where an airline pays to use an aircraft with a crew, fuel, and insurance all provided by the leasing company at a fee.
Two more to the list
The EU Air Safety List, maintained to ensure passenger safety, is updated periodically based on recommendations from the EU Air Safety Committee.
The latest revision, which followed a meeting of aviation safety experts in Brussels from November 19 to 21, 2024, now includes 129 airlines.
Of these, 100 are certified in 15 states where aviation oversight is deemed insufficient, and 29 are individual airlines with significant safety deficiencies.
Alongside Air Tanzania, other banned carriers include Air Zimbabwe (Zimbabwe), Avior Airlines (Venezuela), and Iran Aseman Airlines (Iran).
Commenting on the broader implications of the list, Tzitzikostas stated, “Our priority remains the safety of every traveler who relies on air transport. We urge all affected airlines to take these bans seriously and work collaboratively with international bodies to resolve the identified issues.”
In a positive development, Pakistan International Airlines (PIA) has been cleared to resume operations in the EU following a four-year suspension. The ban, which began in 2020, was lifted after substantial improvements in safety performance and oversight by PIA and the Pakistan Civil Aviation Authority (PCAA).
“Since the TCO Authorisation was suspended, PIA and PCAA have made remarkable progress in enhancing safety standards,” noted Tzitzikostas. “This demonstrates that safety issues can be resolved through determination and cooperation.”
Another Pakistani airline, Airblue Limited, has also received EASA’s TCO authorisation.
Decisions to include or exclude airlines from the EU Air Safety List are based on rigorous evaluations of international safety standards, particularly those established by the International Civil Aviation Organization (ICAO).
Sign up for free AllAfrica Newsletters
Get the latest in African news delivered straight to your inbox
The process involves thorough review and consultation among EU Member State aviation safety experts, with oversight from the European Commission and support from EASA.
“Where an airline currently on the list believes it complies with the required safety standards, it can request a reassessment,” explained Tzitzikostas. “Our goal is not to penalize but to ensure safety compliance globally.”
Airlines listed on the EU Air Safety List face significant challenges to their international operations, as the bans highlight shortcomings in safety oversight by their home regulatory authorities.
For Air Tanzania, this inclusion signals an urgent need for reform within Tanzania’s aviation sector to address these deficiencies and align with global standards.
The path forward will require immediate and sustained efforts to rectify safety concerns and regain access to one of the world’s most critical aviation markets.
Source: allafrica.com
‘Sovereignty alone won’t solve Zanzibar economic woes’
The ruling party in Zanzibar on Monday , March 13, responded to growing demands for full autonomy in the Islands, saying sovereignty doesn’t guarantee economic strength.Continue Reading
