QUESTIONS:
A) Explain
the reasons for TRA to introduce EFD (Electronic Fiscal Device) its impact and
mitigation to avoid conflict between business owner and government.
b)
Explain
the impact of Economic Sanction/Conditionality to the developing countries:-
C) Explain when and why was Tanzania
Industrialized?
A) Explain the reasons for TRA to introduce EFD (Electronic Fiscal Device) its impact and mitigation to avoid conflict between business owner and government.
INTRODUCTION
The
Electronic Fiscal Device (EFD) has been introduced to VAT registered traders
under the "The Value Added Tax (Electronic Fiscal Device) Regulation,
2010" - Subsidiary Legislation, Government Notice No. 192 published on May
28, 2010, and enshrined in the Finance Act 2010 with the main aim of enhancing
VAT compliance in Tanzania. TRA’s new EFD system became effective on July 1,
2010 (Finance Act, 2010). The system aims at allowing the taxman to get correct
sales information from business people; reduce tax collection costs and helping
business people to comply with the Value Added Tax (VAT) regulations among
others in Tanzania (http://www.amazon.com/Challenges-Electronic-Devices-adoption-Tanzania).
Tanzania
Revenue Authority started to implement the second phase of Electronic Fiscal
Devise (EFD) in 2013 with the aim of boosting revenue collections and simplify
tax administration. Tanzania Revenue Authority (TRA) introduced the use of
Electronic Fiscal Device for issuing receipts and invoices for every sale made.
The System was planned to be implemented in two main phases. The implementation
of phase one begun in July 2010, involving only VAT registered traders (Kagoro,
V, 2010).
The
Second Phase is intended to cover non VAT registered traders. Implementation of
the second phase of EFD shall include the following groups;
i.
Persons who are not VAT registered with a
turnover ranging from TSHS 14 million and above per year;
ii.
Traders trading in the Region’s prime areas,
identified on the basis of rent payable;
iii.
Traders dealing with selected business
sectors such as Spare Parts, Hardware, Mini Supermarkets, Petrol stations,
Mobile phone shops, Sub wholesale shops, Bar and Restaurants,
Pharmaceutical Stores; Electronic Shops
etc.
Tanzania
Revenue Authority proudly launches the second phase of Electronic Fiscal
Devices (EFDs) on May 15, 2013, in order to better cover Tax collection from
non-VAT registered traders. It is the first Revenue Authority to implement such
a technologically advanced solution with GPRS based Fiscal machines providing
two way communications between a very advanced Server Software called EFDMS and
Fiscal Cash Registers. This will streamline Tax information from over 200,000
traders (http://www.youtube.com/Electonic-fiscal-device/tz).
Definition of the key terms
Electronic Fiscal Device (EFD) means
a machine designed for use in business for efficient management controls in
areas of sales analysis and stock control system and which conforms to the requirements
specified by the laws, (TRA, 2013).
Types
of Electronic Fiscal Devices (EFDs)
1.
Electronic
Tax Register (ETR)
This is a kind of
device used by retail business that issue receipts manually
2. Electronic Fiscal Printer (EFP)
The device is used by
computerized retail outlets. It is connected to a computer network and stores
every sale transactions or details made in its fiscal memory.
3.
Electronic
Signature Device (ESD)
The device is designed
to authenticate by signing any personal computer (PC) produced financial
document such as tax invoice. The device uses a special computer program to
generate a unique number (Signature) which is appended to and printed to every
invoice issued by the user’s system.
The following is the reasons for TRA to introduce EFD (Electronic Fiscal
Device):-
Electronic
Fiscal Device simplifies collection of taxes and paying of taxes.
Electronic Fiscal device help TRA to collect easy taxes from traders through
EFD and also simplifies payment of taxes from the traders whereby payment being
done online recording. These machines have wireless connection between
customer's central servers which showing the exactly amount for traders to pay.
It reduce misreporting of data which is done by traders so as to escape paying
of taxes to the government hence Electronic fiscal Device become the solution
on collection for taxes by showing real amount to pay traders.
Save
time and cost. Electronic Fiscal Device saves time to
the management of TRA the whole process of collection of taxes because all
business people have to pay their taxes through online. Also it reduces the
cost of TRA management to use a lot of time to search for the traders who does
not pay taxes because each and everything is done through online. Also on the
side of traders help them to reduce cost of transport and time to pay for taxes
in TRA, but through that tax payment is done through online.
IMPACT OF ELECTRONIC FISCAL DEVICE (EFD)
The
following are the positive impact of Electronic Fiscal Device:-
Electronic
Fiscal Device simplifies collection of taxes and paying of taxes.
Electronic Fiscal device help TRA to collect easy taxes from traders through
EFD and also simplifies payment of taxes from the traders whereby payment being
done online recording. These machines have wireless connection between
customer's central servers which showing the exactly amount for traders to pay.
It reduce misreporting of data which is done by traders so as to escape paying
of taxes to the government hence Electronic fiscal Device become the solution
on collection for taxes by showing real amount to pay traders.
Save
time and cost. Electronic Fiscal Device saves time to
the management of TRA the whole process of collection of taxes because all
business people have to pay their taxes through online. Also it reduces the
cost of TRA management to use a lot of time to search for the traders who does
not pay taxes because each and everything is done through online. Also on the
side of traders help them to reduce cost of transport and time to pay for taxes
in TRA, but through that tax payment is done through online.
The
following are the negative impact of Electronic Fiscal Device (EFD):-
It
lead to conflict of conflicts, The process of the
government to introduce Electronic Fiscal Device and force traders to buy it,
creating the conflict between the government and traders whereby trader oppose
the use of Electronic Fiscal device by stopping opening their shops and small
business conducting. This is because;
government fails to provide enough education to traders who required buying the
machine of EFD and what amount of capital needs so as to have that machine as a
result traders opposed through demonstration. For example in September, 2013
Mbeya Traders opposed the use of EFD by stopping opening their shops and small
business, Morogoro in Second week of November and In Dar es salaam in 18-20-11-2013
one week after Morogoro demonstration (http://www.kigalikonnect.com).
It
discourage business conducts among small traders,
Due to its cost in buying EFD discouraging some small business people to
participate on trading because the amount of capital invested and amount of machine
(EFD) is quit difference. These machine sold 800,000/= per each one and if any
person opposing using of this machine he/ she will be charged to pay three
millions (3,000,000/=) or One year to three years on jail or both of them go
together (URT, 2010).
The
following are the mitigation to the problem related to Electronic Fiscal Device
between Business owner and government:-
Mass
education, the government through TRA should have a tendency
of providing enough education to the people in order to make them become aware
on what is going to be introduced and it’s important to the people including
traders. This will help much to avoid conflict that can arise between
government and business owners.
Increasing
people’s involvement on decision making, TRA should involve
people in whole process of Tax collection, new changes and arrangement of
Taxes, as well as the use of Electron Device on Business. The involvement of
people especially traders and other stake holders will help to reduce the
misunderstand between the business owners and the government as happens now
days.
Reduce
the cost of buying Electronic Fiscal Device, The government
should minimize the amount of buying EFD machine in order to all both traders
with low and high capital to afford it or distribute freely and through
indirect way. Now days Electronic fiscal Device has been sold 800,000/= as announced
by TRA 2013 which is too closetful among small business owner.
Conclusion
Electronic Fiscal Device is a
machine which helps TRA easily to collect Taxes than the previous time if they
will use a proper way or methods of convicting people on the importance of this
better instrument. What to do is that, government should provide EFD freely or
in small amount of money to both small and high business owners and those who
will be neglecting to use EFD should severely punished.
B)
Explain
the impact of Economic Sanction/Conditionality to the developing countries:-
INTRODUCTION
Conditionality
is most often associated with aid money, debt relief and bilateral aid.
International organization such as international Monetary Fund and World Bank
or individual country can use conditionality when lending money to another
country (www.investopedia.com). Economic sanction may include
various forms of trade barriers and restriction of financial transaction.
Trade
sanctions are trade penalties imposed by a country or group of country on other
countries. The reasons for economic sanctions/ conditionality including;
management of fund from donors, for instance due to corruption in Uganda,
Donors stopped to sent their grant/ aids and loans to that country, and Last
reasons is to help developed countries exploiting developing countries in term
of resources such as minerals, as well as land for investors.
Definition of Key terms
Economic
conditionality is the restriction upon international trade and finance that one
country imposes on another for political reasons (www.investorword.com).
Economic
Sanctions are domestic penalties applied by one country or group of countries
on another country or group of countries (www.businessdictionary.com).
The
following are the
impacts of economic
sanctions/ conditionality to developing countries:-
Develop neo-colonialism,
economic sanctions or conditionality given out by IMF/ World Bank and developed
countries cause to the persist of neo-colonialism in developing countries for
instance on economic domination including on the Market domination, and controlling
of the available resources such as minerals like gold, copper, coals, and
gases. Although colonialism was eliminated in Africa but still neo-colonialism
exists due to the economic conditionality whereby African countries may require
being under the control of developed countries.
Increase economic dependency,
also economic sanctions cause to the increase of economic dependency especially
to the developing countries for example by depending aids from developed
countries or western countries such as economic aids, this can cause the
developing countries to remain with economic dependency.
Un employment become high, economic
sanctions or conditionality provided by IMF/ World Bank and developed countries
led to unemployment particularly to the developing countries for example through
these conditions people from developed countries can prefer to invest in the
developing countries where they use machine in production and sometimes may
prefer to employ expertise from their home countries for instance Chinese and
by doing so they cause high unemployment to developing countries.
Destruction of internal market,
conditions given by the developed countries can cause the destruction of
internal market for instance when these sanctions based on the free importation
of goods from outside to developing country can destruct the internal market
which relay much on local goods.
Exploitation of resources,
economic sanctions or conditionality kept by the developed countries to the
developing countries may lead to the exploitation of available resources for
example conditions which are given by International Monetary Fund (IMF) and
World Bank towards development programs in developing countries such as
Tanzania if are not followed effectively this may lead to the punishment in one
way or another including taking the available resources such as minerals and
other resources.
Increase of national debt,
economic sanctions can cause to the increase of national debit simply because
the loans from developed countries always come with various conditions including
high interest rate which can be difficult to fulfilled by the developing
countries due to low economic level and sometime can led to the increase of
nation debt.
Conclusion
The
only way to be far from world economic conditionality to developing countries
including Tanzania is to use our resources properly so as to increasing the
economic status of developing country. By doing that, these countries can be
independent in term of economic and these can reduce economic exploitation from
developed countries.
C)
Explain when and why was Tanzania Industrialized?
INTRODUCTION
The
industrialization of Tanzania started soon after independence 1960s. Tanzania’s
first comprehensive industrialization effort began with the first five years
plan in 1964. While continuing with an emphasis on the agricultural sector also
with adoption of the Arusha declaration policy in 1967, the government set a
new course in industrialization strategy consistent with Tanzania socialism and
self- reliance. The declaration stipulated two principles that must be adopted
in the future industrial plan such as (1) the future strategy should not be
significantly dependent on foreign investment and (2) private ownership of
industry must gradually be substituted by state ownership in the form of
parastatal corporations.
However
in 1974 the government laid down the third five years plan more drastic
measures for structural changes in the direction of self-reliance. Effort for
industrialization would be aimed at the processing of agricultural products and
import substitution of basic needs of human life for the majority of the
Tanzanians, (www.kellogg.nd.edu/.. /087.pdf).
The following below are
the reasons to why Tanzania industrialized:-
The
development of industries in Tanzania associated by deferent factors, and the
combination of those factors led Tanzania to be industrialized in some extent.
The following are the reason to why Tanzania industrialized:-
Availability of fuel
and power, Tanzania had developed in industries
because of availability of fuel and power which were used to run various
machines within the certain industries. Due to the availability of power supply
and fuel in Tanzania increased the number of industries including Mbeya Textile
Industry, Morogoro Textile Industries, Morogogo Tobacco processing industries, Tunduru
and Mtwara Cash nuts processing industries, Urafiki Textile Industries, Mafinga
Tea Industry, and Mbeya Agricultural tools industry.
Availability of
capital, Due to availability of financial capital in
Tanzania, the government in collaboration with outsider stakeholders they
decided to invest on industries because capital invested helped to buy raw
materials, fuel and power, and to buy various machines which were industries.
So, availability of capital influenced the development of industries in
Tanzania from 1960 until today.
Availability of labour,
Human resources both skilled and unskilled influenced the development of
industries in Tanzania since independence because both worked in industries and
busting to produce enough goods so as to increase the sustainability of our
industries. Also industries like cash nuts industries, tobacco industries, and
cement industries in Tanzania need high labour to develop that’s why both
skilled and unskilled required hence the contribution of man power within those
industries existed from independence until today influenced the development and
the survival.
Availability of raw
materials such as sugar cane, tobacco, sisal, Cash nuts, Tea, and cotton
led to the industrialization in Tanzania, this means that due to the
availability of raw materials the Tanzania government saw its better to introduce
industries which could produce goods such as sugar, clothes and sheet papers to
its people rather than depending from the abroad nations.
Availability of Market,
Availability of market for goods producing and processing in our industries
influenced the development of industries in Tanzania. Markets such as internal
and external market influenced industries to produce more product and services
to the people so as to satisfy they daily demands where in other hand
industries gained capital for running various machine and buying raw materials.
Contribution of Mwalimu J. K.
Nyerere, the first president of Tanzania contributed on
prosperity of industry in Tanzania. He used to organize people to work hard in
different sectors such as in agriculture, fishing and mining where those
products found were used in industry. The encouragement on industry was done
simply because he wanted to increase the nation income of the country through
exportation of goods as well as those products which were prepared for future
use.
Conclusion
Generally,
Tanzania is in the process of industrialization because we are still continuing
on agriculture as a backbone of the nation than investing on industries. Untill
today the tendence of import is high compared with export. Tanzania through
agriculture we produce raw materials such as sugar cane, tobacco, sisal, Cash nuts,
Tea, and cotton but we export outside because we have destroyed our industries
under an umbrella of privatization whereby investors changed its function and
nowdays most of those industries created after independence have no function.
What is recommendation to the government is to increase the number of
industries rather than depending on agriculture as a back born of our nation.
These industries construction should goes hand in hand with new industrialized
policies which will help to bust Tanzania to be one of the leading
industrialized countries in the world.
REFERENCES
Kagoro,
V, (2010), Electronic fiscal services and tax administration
systems among business
Taxpayers in Arusha municipality, mainland Tanzania, Dar es Salaam
press.
URT, (2010), Subsidiary Registration 2010, Printed
By Government, Dsm
Retrieved from: www.kellogg.nd.edu/.. /087.pdf
Retrieved from: Mwalimu J. K. Nyerere, 1995
Tanzania
Revenue Authority (TRA), Retrieved: http://www.tra.go.tz
Written By AUSI CHIWAMBO (2014)-Teofilo Kisanji University
It's very flattering that the state of Tanzania is up to technological reforms, such as using electronic signature. Hopefully it won't be just a cheap imitation of the West, but a long term effective solution.
ReplyDeleteIt Is about a week now, The System have stopped without public awarenes thus causing misunderstand among stakeholders. TRA should issue a public notice whenever their Servers are down so that EFD users may not incur costs of sending machines to suppliers and pay for repair services which is not even provided as the problem is in the TRA Server.
ReplyDeleteThanks for sharing your valuable information.For more information about hardware part suppliers visit our get in touch page. A resource which lets you to find the best supplier within a few minutes.For more details visit to www.virtualelectronicsclub.com/contact_us.php
ReplyDeleteEFD are beneficial for both tax payer and the Authority, as it gives a tax payer a satisfaction and voluntary tax compliance and also it speeds up the revnue collection at lower cost,
ReplyDeletesuch a useful knowledge, and by the way now days there are many suppliers of EFD and guess what the prices are lower that the anounced ones, check on this link for your purchase www.compulynx.com
NICE ARTICLE
ReplyDelete