MORE than 17,000 dubious business
firms are in trouble in Tanzania and have 30 days to refund to the government
billions of money illegally secured through forged tax returns. The ultimatum
was issued by President of the United Republic of Tanzania; Dr. John Pombe
Magufuli in his meeting with business community few days ago.
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| The President holding a folder with all dubious tax return firms |
"In checking through some
official records, I found that many traders have been evading taxes – with some
of them subsequently claiming refunds of Value Added Tax” (VAT) on which they
had never transact any business to secure the refunds,” said the President
holding a folder containing the names.
He named the tactics which business
operators of dubious probity have been using to illegally claim VAT refunds as
including lodging false documents on non-existent ‘exports,’ and claiming to
have used ‘ghost inputs’ in their production activities from ‘ghost suppliers.’
Dr. Magufuli further revealed
that there are unscrupulous firms which habitually indulge in 'over-invoicing'
for purposes of cheating the tax officials and other authorities. This, he
stated, is very much common in the mining and manufacturing sectors of the economy.
"The odd businessman comes to
invest in mining, and the cost of the mining machinery is deliberately
over-invoiced. For example, if a machine’s actual cost is TZS 5 million, dubious
investors will declare the cost at TZS 50 million, only to claim a bigger
VAT refund later," he stated – stressing that this is bad for the country.
It also reflects badly on shady investors, extant and new, foreign and local.
"I am aware that some traders
have built up industries to camouflage their otherwise illegal business
activities. Sometimes they use their ‘industrial’ premises as private
warehouses in which to store and trade goods on which the due taxes are evaded
as a matter of course,” Dr. Magufuli stated.
"On this, I want to say openly
that I have a list of 17,446 companies (which have evaded taxes and received
illegal payments over cheating in tax refunds) – and the names of the
businessmen (and women) who are involved in these evil shenanigans. I will hand
over the documents to Prime Minister and within 30 days, all those involved
must refund the taxpayers money or else they will face the music,” declared President
Magufuli.
The President is known for his anti
corruption drive and ambitious plan to revamp the economy of Tanzania that is
ranking as one of the Africa’s fastest growing economies. His vision is to see
that Tanzanians benefit from their resources.
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