TANZANIA REVENUE AUTHORITY UPDATES
In views of improving efficiency and convenience in tax collection, TRA established E-Filling system effective September 2020. This system is introduced according to Section 34(1) of the Tax Administration Act (TAA, 2015) grants the Commissioner General (CG) the powers to establish and operate an electronic system for filing, furnishing and servicing documents.
We observed several advantages of E-Filling since its established to date despite of few challenges observed. Among many advantages of E-Filling from the customer /User perspective is serving time, being incharge of your tax account, reduce paperwork and Physically movement to TRA offices as well as increase voluntary compliance.
Below are some of the taxes that should be filled using E-Filling system
- Statement of Estimated Tax Payable by Instalments (SETPI) (S. 89 of ITA, 2004);
- Statement of Revised Tax Payable by Instalments (S. 89 of ITA, 2004);
- Final Return of Income (ROI) (S. 91 of ITA, 2004);
- Statements and payment of tax withheld (half-yearly returns) (S. 84 of ITA, 2004); and
- Skill and Development Levy monthly return (S. 16 of VETA Act).
Applicability of E-Filling to NGOs and Corporate Societies
Once the E-Filling system established, all entities automatically moved to E-Filling system at the status they are.
- For NGOs and Societies that were supposed to withhold and pay PAYE and SDL were now supposed to use E-Filling system. Of which one of the requirement is to ensure every and each staff have TIN number and NSSF Number.
- NGOs and Cooperative societies are now required to file Statement of estimated tax payable on E-Filling as per Income Tax Act S.89. The only different that will arise with these types of organizations is, they are supposed to file nil estimate of tax payable on installments.
- NGOs and Corporate Societies will be required to fille their annual account together with Annual return to TRA on or before end of sixth month after the end of their financial years.
From our experience, we noted that, most of NGOs and cooperative societies are not using E-filling to file and submit their staff deduction PAYE and SDL as well as statement of estimates and Final return to TRA. So, because of this, there is so much accumulated unfiled return of these taxes. Penalties for delay or non-filling of the above taxes is Tsh 225,000 for the entity and Tsh 75,000 for individual on each month of delay as per S.78 (1-3) of Tax Administration Act, 2019 which states that,
“78.-(1) A person who fails to file a tax return or pay tax on due date as required by a tax law is liable for a penalty for each month or part of a month during which the failure continues.
(2) The penalty is-
(a) two point five percent of the amount of tax assessable with respect to the tax return less tax paid by the start of the period towards that amount; and
(b) in the case of an individual, 5 currency points or in the case of a body corporate, 15 currency points, whichever is higher.
(3) The penalty applies separately for a failure to file a tax return that is an estimate or provisional amount and a failure to file a tax return incorporating the final amount.