The Accountability in Tanzania Programme (AcT2) management team facilitated experts who tabled findings from an assessment of tax compliance for the CSOs sector; one of the key issues that greatly challenge the CSO sector. Many CSOs have been caught off-guard as most are not fully on top of tax laws and risk penalties and high interest payments for non-compliance. e.g. estimates of 5 CSOs that took part in the survey have estimates of outstanding tax and penalties totalling to TZS 436 million.
For CSOs to be compliant to the laws, they need to have thorough knowledge of tax laws and tax administration requirements. Most challenging areas include procedures and criteria for application of Charitable Status, scope for payment of skills development levy, corporate tax, treatment of payment to interns and volunteers, and withholding tax on services. The study recommended, CSOs to work closely with TRA to develop an easily accessible tax tool kit for CSOs and also engage with both TRA and Ministry of Finance in areas that require clarification particularly with regards to payment of cooperate tax and CSOs taking part in the regular tax forums organised by TRA.
‘Some Philanthropic Foundations provide funding to Charitable Organisations and therefore some Tanzanian NGOs are missing potential project funds because they have not yet received Charitable Status ruling and the lengthy procedure (it has taken up to 3 years for some organisations ) has discouraged many from making an application ’. Said Rehema Tukai, AcT2 Deputy Director.
During the closing remarks a panellist from AcT2, Amir Abdallah advised CSOs “This study calls for CSOs to use qualified professionals to advise them on tax issues in order for them to comply and avoid risks”.
Participants fielded questions to the tax experts panellists from TRA and one of the interviewed participants said “I am grateful for this session as I have learnt that there is a mechanism for appealing and channelling complaints through the Tax Consultation Bureau for our tax issues to be reviewed” said a participant from a CSO in Kigoma.
The panellists included officials from TRA- Maternus Mallya, Principal Tax Officer; Octavian Kichenje, Legal Counsel and Senior Tax Management Officer, Philipo Eliamoni , Adv. Stella Cosmas from Institute of Tax Administration and Amir Abdallah, Senior Manager from KPMG. The session was moderated by Rehema Tukai, Deputy Director from AcT2.