Glancing Mama Samia’s Presidency Tenure

Time Flies! The adage truly holds when one recounts events that have transpired in our country over the period of last year, as the country had witnessed the untimely demise of its fifth phase president, Mr. John Pombe Magufuli who succumbed to heart complications in early March as well as ascension of Samia Suluhu Hassan (“Mama Samia”) as sixth phase president in the country.

Though it may seem like yesterday, a year has already lapsed since Mama Samia’s ascension to the presidency office with such anniversary poised to be celebrated on 19th March 2022.

In her early presidency days, Mama Samia had urged Tanzania Revenue Authority (TRA) / taxman in rethinking aggressive collection measures including but not limited to institution of recovery measures vide effecting agency notice on taxpayers’ bank account. The wisdom behind Mama Samia’s pleadings was to the tune that such aggressive measures were truly hampering the business fraternity in the country thus de-motivating potential investors’ appetite towards our country.

Over the period of a year, it is fair to say that we have witnessed a huge change in tone and collection measures adopted by TRA. The taxman has been spearheading meetings with taxpayers which aim to understand the challenges marring taxpayers and strategizing to address those challenges. Further, TRA has refrained from institution of recovery measures vide effecting agency notice as first initiative in garnering government revenue rather the taxman has now been emphasizing more on dialogues with taxpayers and relying on settlement agreements as means to afford taxpayers with opportunities to settle their outstanding tax liabilities.

Over the period of last year, we have also witnessed the increase in employees’ quota threshold in the context of employers qualifying for Skills and Development Levy (SDL) chargeability, payment and remittance from four (4) employees to ten (10) employees. The said amendment was cheered by lots of tax stakeholders in the country as it reduces employment related costs which in turn boost employment prospects in the country.

However, can’t such threshold be further increased say to thirty (30) employees thus availing more reliefs to lots of employers in the country cost wise hence bolstering employment prospects? or should the current SDL rate of four percent (4%) be further reduced say to two percent (2%) as a way of relieving employers from employment related costs thus bolstering employment prospects along the way?

Further, we had also witnessed a one percent (1%) reduction in Pay As You Earn (PAYE) which had aimed to bolster the welfare of the workers’ fraternity in the country thus prompting plaudits form tax stakeholders. Whether such reduction had actual impact on the employees’ purchasing power is a discussion for another day, though it is our humble hope that the Government would further reduce PAYE vide reducing the prevailing tax rates or expanding the tax bands amount which in turn will fatten the employees’ disposable income thus potential increase in garnered Government revenue from spending to be initiated by such workers on the back of rise in their disposable income.

Mama Samia has also been lauded on her critical intervention on tax laws / amendments / policies which have been decried by citizenry across the country. Such intervention is genuinely apparent in the context of mobile levy imposition, withholding tax (WHT) on agriculture products and petroleum products’ levy, to name a few. With citizenry lamenting the severity of such mobile levy, Mama Samia intervened vide asking the responsible minister to rethink the rates charged as mobile levy which then resulted in adoption of newer and friendly mobile levy rates.

After introduction of withholding tax (WHT) on agriculture products, livestock and fishery products seemed to have a negative impact on agriculture business prospects thus instigating pleadings and wailings by citizenry across the country, Mama Samia intervened on such malaise which then resulted in repealing of such provision hence availing reliefs to agriculture players in the country.

Though, we genuinely applaud and commend Mama Samia’s intervention whenever seems to be a quandary engulfing our tax laws, one can’t stop wondering on whether now is the time to rethink methodology adopted by the team responsible for promulgating such tax amendments specifically on involvement of relevant stakeholders prior promulgating such changes or conducting comprehensive cost – benefit analysis on such potential tax changes.

Mama Samia has also been a huge champion of tax base expansion as evidenced by her rallying cries to the taxman on the same and her initiatives in bolstering investment prospects in the country as evidenced by a raft of policy initiatives construed to that effect.

We truly applaud Mama Samia’s efforts in promoting tax base expansion specifically on her efforts to bolster investment attraction in the country vide construing relevant policies which ensure conduciveness of conducting business in the country. Additionally, isn’t now the time to re – think the best viable way to tax informal sector in our country? A huge portion of our population engages in informal sector hence erecting a viable way to tax such informal sector might go a long way in expanding tax base which in turn might ensure prevalence of tax reliefs to the business fraternity in the country.

In the upshot, there are lots of positives to be gleaned from Mama Samia’s one-year tenure in the office in the context of taxation. We truly applaud her efforts in advocating for prudential collection measures, investment attraction in the country, bolstering welfare of the employees’ fraternity in the country and transformation from paper-based tax regime to digital based tax regime. Though, we appreciate that there are lots of work still needed to be done to address the challenges marring taxpayers in the country, bolster tax base expansion prospects as well as promote investment attraction in the country, it is our humble hope that the next year of Mama Samia’s presidency will do a lot towards achieving that.

The views expressed herein are those of the author and not necessarily those of his employer. Benedict Kombaha is a Tax Enthusiast specializing in Direct Tax, Indirect Tax and Dispute Resolution at Tax Revenue Appeals Board and Tax Revenue Appeals Tribunal