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Tanzania to review VAT, oil and gas laws

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Sunday, December 01, 2013 

Tanzania to review VAT, oil and gas laws

Oil drilling


DAR ES SALAAM, Tanzania - The government has started reviewing its Value Added Tax (VAT) law in order to help improve economy and livelihood of the people.This was said last week by the Tanzania Revenue Authority Commissioner General, Harry Kitillya at the CEOrt’s roundtable dinner in dare s Salaam.Mr. Kitillya was presenting his paper titled ‘Remarks on Selected Tax Policy and Administration Interventions’, stressing that the rewriting of the law aimed at realigning it with the best international practice.


Currently Tanzania does not have a specific tax regime for oil and gas, but uses existing tax laws to tax the industry operators amid a number of challenges.
“The reviewing will also incorporate areas that have not been included in the current VAT Act like oil and gas. We also want the government to enact the Tax Administration Act to harmonise all the administrative codes and procedures,” said the TRA Chief.
“We are committed to creating a workable partnership with the private sector in revenue administration and your inputs towards achieving this commitment together are most welcome and valued,” he said.
 He reiterated that the discovered reserves of gas are likely to place Tanzanian economy to higher levels of development.
MrKitillya said Tanzania needs gas for power generation and revenue to bridge the budget gap.


Currently the gas industry is dominated by foreign experienced companies with high level technology and long-standing management in the venture including taxation.
According to Kitillya, since Oil and gas is a relatively new venture, Tanzania is faced with a number of challenges including putting in place a modern regulatory taxation and revenue management framework for the industry to be sustainable.
“Currently the industry is dominated by foreign experienced companies with high level technology and long-standing experience in the industry including tax planning. Overcoming these challenges will have a significant bearing for Tanzanians to realize the benefits of their natural resources for their development,” he noted.
The Tanzania Revenue Authority Act, Cap 299 established the TRA as a central board to assess, collect and account for all Central Government revenue and administer and give effect to the laws relating to such revenue.
For his part, CEOrt Chairman Mr. Ali Mufuruki, urged businessmen to improve their cooperation with government authorities.

He said the private sector is the engine of the economy and is ready to work with the authority in contributing to economic growth.
Mr .Mufuruki applauded TRA for its decision to share with the business community various plans relating to Taxation Acts.
The CEO Roundtable is a policy dialogue forum that brings together CEOs of over 70 leading firms doing business in Tanzania.
The members of the Roundtable and the companies they lead account for more than 40 percent of the tax revenue collected by the government and employ over 70,000 people.

By Patrick Kisembo, Sunday, December 01st, 2013