The last quarter for the calendar year 2020 has just started. Most taxpayers have December 31 as their prescribed year-end. And so, for them, it is time to wrap up as the year 2020 closes. In July 2020, the Tanzania Revenue Authority (TRA) published in its website nine “key issues for a taxpayer to consider”.
1.You shall not transfer your TIN
This first reminder says that, “the Taxpayer Identification Number (TIN) is a unique number for you and hence not transferable”. It is not uncommon to hear persons importing their goods or conduct their business using someone else’s TIN and credentials. This problem is also prevalent in the use of EFDs. Do not allow your TIN to be abused and do not abuse somebody else’s TIN.
2.You shall indicate your TIN in all communications
A “TIN is used for all taxpayers’ communications with TRA…” reads part of the second reminder. TIN is also used in communications or dealing with other institutions in respect of land issues, trade and industrial licenses, company registration and all contracts for the supply of goods and services. This flows from directive number one above. TIN is a unique identifier of a taxpayer.
3.You shall display the original TIN Certificate
It is not uncommon to see some taxpayers displaying photocopies of TIN certificates (as opposed to originals) in their business premises. Going by this third “commandment” displaying copies is wrong. In the said publication, TRA reminds taxpayers that “the original TIN Certificate should be displayed in a conspicuous place of the business premise”. The emphasis is on “original TIN Certificate” (i.e. the ‘paper’ that was issued to you by TRA). This, partly, serves as a control for the first commandment above.
4.You shall file a return of estimates
The must “submit your return of estimates at the beginning of the year of income within three (3) months”. And for those whose accounting period is a calendar year, their returns should reach TRA between January and 31 March. I would add that estimates need to be at least 80 percent accurate and you can amend anytime before the year of income ends.
5.You shall notify TRA of changes
Probably one of the areas that taxpayers can easily miss. The reminder says you should “notify TRA in writing in case of business grows, goes down, closes or whenever you open a branch so that can be issued with a Branch TIN”.
6.You shall pay income tax timely
The law allows you to pay income tax in four instalments during the year of income. For taxpayers with December year-end (calendar), the first instalment within January to March; second April to June, third with July to September and the fourth with October to December. The reminder adds that “you may pay in a lump sum without considering instalments” within January to March.
7. You shall ensure payment of tax on rented premises
If you have rented business premises, ensure you have a lease agreement and that stamp duty of 1 per cent of the consideration has been paid to legalize the agreement (stamped by TRA). You must also withhold 10 per cent on rental payments to your landlord and remit the same to TRA whenever you renew the contract. And you should also “ensure that you have a TIN of the landlord” for declaration purposes.
8.You shall keep proper business records
You must “keep proper records of your business, issue receipts whenever you sell and demand receipts whenever you buy”.
9.You shall use EFD
You must use Electronic Fiscal Device (EFD) if your sales (turnover) exceeds Sh46,500 per day. Traders whose daily sales (turnover) is below Sh46,500 should issue manual receipts bearing their name and TIN.
By Shabu Maurus, Tax Partner, Auditax International.