The government wants every citizen who has attained the age of 18 to have the Taxpayer Identification Number (TIN) that will enable all economically active Tanzanians to file tax returns.
The Minister for Finance and Planning Dr Mwigulu Nchemba made the announcement on June 14, 2022, when tabling the 202/23 budget in the parliament in the capital Dodoma. The aim of the government here is clear, to enable all eligible Tanzanians to pay personal income tax.
This move is highly commendable and, actually, it has come too late. Some Tanzanians do not know that paying income tax is part of their responsibility as citizens. Dr Nchemba’s announcement is part of the fulfilment of the Tax Administration Act, [Cap 438 R.E 2019], which requires all taxpayers to have TIN numbers.
Why it has taken three years to facilitate enforcement of the Act is difficult to know. But at least the law is now being enforced. Salaried workers who pay the Pay As You Earn (PAYE) tax were issued with TIN numbers in January 2021.
As I said, this move is commendable. It is high time that every Tanzanian with an income started paying personal income tax. Every eligible Tanzanian! Tanzanians should not sit back and relax expecting someone else to pay for the running of their government and for development projects.
In seeking to ensure that all eligible Tanzanians start to pay income tax, the CCM-led government is now performing a key aspect of its function. It was a pity that Dr Nchemba didn’t say how much this exercise would bring into the national coffers. In the next budget revenue estimates should be clearly spelt out.
So far only salaried workers have been the only citizens obliged to pay personal income tax through PAYE. It was unfair, definitely, to let the tax-paying burden fall exclusively on salaried employees.
The government must prepare very well for this exercise. It is a very sensitive but administratively exhaustive endeavour. To begin with, the government must be serious about this decision and should move decisively to implement it. It should invest heavily in the facilities and manpower to ensure the filling of tax returns is not cumbersome.
It is good that the Finance Bill 2022 has allowed paying taxes using mobile phones. This is feasible because mobile money transactions are now the order of the day throughout the country.
I am aware that tax returns can also be filed electronically. This is easy for more organized business entities and corporations but for individual citizens, it’s not, especially in the beginning.
In the beginning, many will have to physically visit Tanzania Revenue Authority’s facilities to file their returns. The government should make producing tax returns necessary before citizens can access some services such as acquiring passports, opening court cases, buying SIM cards, etc. The burden of proof on incapacity to pay income tax should fall on the taxpayer himself or herself.
To start with everyone possessing a national ID should be given a grace period to submit a TIN that could be pinned to the ID number. The failure to produce TIN after the expiry of the grace period should disqualify citizens from possessing an ID.
But for this to happen a lot of education should be given to increase willingness to pay. This is now much easier because we live in the age of social media and influencers.
Negative reactions misplaced
There have been some negative reactions. The reactions focused on the eligibility of age 18, which is deemed too young. It is good that Dr Nchemba was quick to clarify that while everyone from the age of 18 should pay income tax it’s only those who are economically active who will be required to file tax returns.
Some ‘analysts’ in the FM Radios and in the social media have complained that Tanzanians already pay too much in indirect taxes and charges for products and services they purchase. But if this is a justification for not paying income tax should the PAYE be totally scrapped, then?
Others say the government’s move is like bringing back the development levy (popularly known as head tax) through the back door. The development levy was abolished in June 2003 mainly for political reasons. Obviously, there were some problems with its administration.
The collection measures were imprudent and included harassment of people by the semi-illiterate militia deployed to enforce the payment of the levy, specifically in rural areas. But challenges in its administration did not warrant scrapping it altogether.
Negative reactions are misplaced. Tanzanians must understand that paying will give them more democratic power in their hands. And it might eventually make people politically active and, eventually, reduce voter apathy, which is Tanzania’s biggest political malaise.
Paying taxes could also reduce Tanzanians’ inexplicable tolerance for mediocrity in social service provision. People who pay due taxes can now start to demand improved services and better infrastructure. They would also seek to get better political representation and will want to see their votes count.
The government on its part will be obliged to listen and this might increase accountability. As it stands the people have to beg the government for roads, hospitals, schools, etc. And once these are the people or their representatives thank the government and, usually, the President. But that will end once people start paying income tax.
Currently, the government doesn’t care much for people’s voices and listens more to development partners who fund about 40 per cent of the budget. But once every eligible Tanzanian pays tax, things will have to change.
Damas Kanyabwoya is a journalist and a political analyst based in Dar es Salaam. He’s available at email@example.com. His Twitter handle is @DKanyabwoya. These are the writer’s own opinions and it does not necessarily reflect the viewpoint of The Chanzo Initiative. Want to publish in this space? Contact our editors at firstname.lastname@example.org for further inquiries.