TRA bills Red Cross for Sh1.5bn
Tax avoided on imported vehicles Says buyers pay the tax, not TRCS
Tanzania
Red Cross Society (TRCS) is faced with a challenge of paying over
Sh1.5bn to the Tanzania Revenue Authority (TRA) by December 31 or see
its tax exempt status scrapped, with obvious consequences for various
stakeholders.
TRCS, a leading humanitarian agency each year imports relief items and equipment meant for communities affected by disasters, risks and emergencies in scores of containers.
TRA has placed a demand to TRCS to pay that amount saying it accrues from vehicles it has been disposing off for the last 10 years.
The tax note stipulates that over 100 vehicles have been sold and each is supposed to fetch TRA between Sh15m and Sh22m in taxes.
TRCS has been selling used vehicles without conditioning the buyers to clear TRA tax dues before taking them. “Red Cross as an auxiliary to the government has failed to do the needful, causing the government to lose millions of shilling in unrealised income,” TRA maintains.
Reliable sources affirm that TRA has written to TRCS demanding it to clear the debt with fines and penalties by December 31or else its tax exempt status shall be at risk.
Some TRCS vehicles meant for the Blood Safety project have for months been languishing in TRA parking yards pending TRCS clearing of previous taxes owed to the tax authority.
Next year is an election year, with TRCS expecting consignments from Red Cross International and other partners to help volunteers and communities responding to election related violence, but TRA is placing the whole situation in a dilemma.
TRCS sources affirmed to The Guardian on Sunday that used vehicles in good order have been shared among senior staff, some freely and others at just takeaway costs, some sold to relatives and friends of society officials, an issue complicating following up tax payment issues.
At the end of September this year when this paper started pursuing the issue Peter Mlebusi, the TRCS deputy secretary general, admitted that TRCS sold used vehicles to some staff members, noting that it was them who were required to pay tax dues to TRA and not the society.
In his response, TRCS President Dr George Nangale admitted tension with TRA, saying that the matter had not formally reached him or be placed in the hands of the Board of directors for discussion and seeking a remedy.
“I am aware of the challenge of paying over Sh1.5bn to the tax body, although the matter has not been brought to the Board of directors.
I have heard from the management that they had several meetings with TRA and they agree to find those who have bought the vehicles to start paying tax and fines as required,” he said.
Red Cross has been selling used vehicles after a certain project is completed, with the procedure being normal and was being conducted every time.
“Sometimes buyers have not been paying taxes by negligence or ignorance. This negligence puts TRCS in a difficult situation,” he said.
It is the duty of the Red Cross management to remind the buyers that they are required to pay tax before starting using the vehicles they have bought, he said.
TRA also needs to make it part of public awareness that any person who buys a used car from a tax exempted organisation must change the title of ownership, he further observed.
“All procedures of changing documents of the vehicle must be done under supervision of the authority which is TRA, so they should explain why buyers continue to evade tax while they have already undergone all intended procedures,” the TRCS executive demanded.
The TRCS management has to explain why they are conducting such business without following proper procedure as the society is a public institution which adheres to the law of the land, he said.
When approached for comment again this week, Mlebusi refused more disclosure, saying that it was a confidential matter between the TRCS and TRA and not for public consumption.
Speaking with emotion via telephone, Mlebusi refused to mention the amount owed to TRA. “Who gave you such ridiculous information? Those who had bought the vehicles are the ones supposed to pay taxes.
The society was not asked to pay the bill but it is helping TRA to find those who had bought the vehicles to redeem payments,” he declared.
Internal sources said Red Cross like other tax exempted institutions including government agencies and departments has an agreement with TRA where before disposing vehicles by selling the successful buyers should clear with the tax body before the vehicle is given out, an accord that doesn’t seem to have been consistently followed.
Mlebusi couldn’t divulge more details, intoning that “If you think what you know is enough and you are comfortable with it you can publish the article whenever you want.
I cannot comment anything regarding the issue. As the president who is the spokesperson has already said, it is better to ask him again for everything you want to know.”
However, he had told The Guardian on Sunday in September that they had vivid documents regarding those who have bought the cars and other documents from the TRA regarding the matter.
When contacted by telephone, the TRA Director for Taxpayers Services and Education Richard Kayombo said it was impossible to talk on the matter because of the agreement between the authority and its client.
“We don’t provide information on our clients. Call them to get more details because they are the ones who know everything,” he stressed.
But later on Friday during Taxpayers’ Day, Kayombo told The Guardian on Sunday that the Red Cross matter as well as on other institutions were being investigated and that exposing more information on the matter would risk affecting the process.
It is not Red Cross alone which faces such matters in relation to exceptions, as many other institutions use the same loophole to evade taxes, he pointedly stated.
TRA board chairman Bernard Mchomvu said that tax exemption is a major challenge since it hinders ability to effectively collect taxes.
During the Taxpayers’ Day event this week, Mchomvu said that in the last financial year, exemptions allowed reached over Sh100 billion, vowing that efforts will be made to bring down that level of tax waivers.
Early this week, MPs discussed and passed a motion that the government prepare alterations to the TRA Act whereby all tax defaulters would be revealed to the public.
TRCS, a leading humanitarian agency each year imports relief items and equipment meant for communities affected by disasters, risks and emergencies in scores of containers.
TRA has placed a demand to TRCS to pay that amount saying it accrues from vehicles it has been disposing off for the last 10 years.
The tax note stipulates that over 100 vehicles have been sold and each is supposed to fetch TRA between Sh15m and Sh22m in taxes.
TRCS has been selling used vehicles without conditioning the buyers to clear TRA tax dues before taking them. “Red Cross as an auxiliary to the government has failed to do the needful, causing the government to lose millions of shilling in unrealised income,” TRA maintains.
Reliable sources affirm that TRA has written to TRCS demanding it to clear the debt with fines and penalties by December 31or else its tax exempt status shall be at risk.
Some TRCS vehicles meant for the Blood Safety project have for months been languishing in TRA parking yards pending TRCS clearing of previous taxes owed to the tax authority.
Next year is an election year, with TRCS expecting consignments from Red Cross International and other partners to help volunteers and communities responding to election related violence, but TRA is placing the whole situation in a dilemma.
TRCS sources affirmed to The Guardian on Sunday that used vehicles in good order have been shared among senior staff, some freely and others at just takeaway costs, some sold to relatives and friends of society officials, an issue complicating following up tax payment issues.
At the end of September this year when this paper started pursuing the issue Peter Mlebusi, the TRCS deputy secretary general, admitted that TRCS sold used vehicles to some staff members, noting that it was them who were required to pay tax dues to TRA and not the society.
In his response, TRCS President Dr George Nangale admitted tension with TRA, saying that the matter had not formally reached him or be placed in the hands of the Board of directors for discussion and seeking a remedy.
“I am aware of the challenge of paying over Sh1.5bn to the tax body, although the matter has not been brought to the Board of directors.
I have heard from the management that they had several meetings with TRA and they agree to find those who have bought the vehicles to start paying tax and fines as required,” he said.
Red Cross has been selling used vehicles after a certain project is completed, with the procedure being normal and was being conducted every time.
“Sometimes buyers have not been paying taxes by negligence or ignorance. This negligence puts TRCS in a difficult situation,” he said.
It is the duty of the Red Cross management to remind the buyers that they are required to pay tax before starting using the vehicles they have bought, he said.
TRA also needs to make it part of public awareness that any person who buys a used car from a tax exempted organisation must change the title of ownership, he further observed.
“All procedures of changing documents of the vehicle must be done under supervision of the authority which is TRA, so they should explain why buyers continue to evade tax while they have already undergone all intended procedures,” the TRCS executive demanded.
The TRCS management has to explain why they are conducting such business without following proper procedure as the society is a public institution which adheres to the law of the land, he said.
When approached for comment again this week, Mlebusi refused more disclosure, saying that it was a confidential matter between the TRCS and TRA and not for public consumption.
Speaking with emotion via telephone, Mlebusi refused to mention the amount owed to TRA. “Who gave you such ridiculous information? Those who had bought the vehicles are the ones supposed to pay taxes.
The society was not asked to pay the bill but it is helping TRA to find those who had bought the vehicles to redeem payments,” he declared.
Internal sources said Red Cross like other tax exempted institutions including government agencies and departments has an agreement with TRA where before disposing vehicles by selling the successful buyers should clear with the tax body before the vehicle is given out, an accord that doesn’t seem to have been consistently followed.
Mlebusi couldn’t divulge more details, intoning that “If you think what you know is enough and you are comfortable with it you can publish the article whenever you want.
I cannot comment anything regarding the issue. As the president who is the spokesperson has already said, it is better to ask him again for everything you want to know.”
However, he had told The Guardian on Sunday in September that they had vivid documents regarding those who have bought the cars and other documents from the TRA regarding the matter.
When contacted by telephone, the TRA Director for Taxpayers Services and Education Richard Kayombo said it was impossible to talk on the matter because of the agreement between the authority and its client.
“We don’t provide information on our clients. Call them to get more details because they are the ones who know everything,” he stressed.
But later on Friday during Taxpayers’ Day, Kayombo told The Guardian on Sunday that the Red Cross matter as well as on other institutions were being investigated and that exposing more information on the matter would risk affecting the process.
It is not Red Cross alone which faces such matters in relation to exceptions, as many other institutions use the same loophole to evade taxes, he pointedly stated.
TRA board chairman Bernard Mchomvu said that tax exemption is a major challenge since it hinders ability to effectively collect taxes.
During the Taxpayers’ Day event this week, Mchomvu said that in the last financial year, exemptions allowed reached over Sh100 billion, vowing that efforts will be made to bring down that level of tax waivers.
Early this week, MPs discussed and passed a motion that the government prepare alterations to the TRA Act whereby all tax defaulters would be revealed to the public.
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