February 29, 2000



ONE-THIRD of all value-added tax (VAT) refund claims received by the Tanzania Revenue Authority (TRA) from VAT –registered traders is "fictitious".


The VAT commissioner, Placidus Luoga, told Business Times that, out of 768 VAT claims filed with TRA, 254 – with a total value of Tsh 2.615 billion were fictitious and were therefore, not approved for payment.


"The VAT department is making thorough verifications to uncover such malpractice; and that’s why it takes us more time before effecting refunds," he said. Delay in settling VAT refund claims has been aggravated by false informers in support of their claims.


The department has approved and paid out paid out 457 claims valued at Tsh 12.389 billion. The claims which were approved and paid account for more than 60 per cent of all 768 VAT refund applications received by the department.


By mid-this month, the VAT department had 57 VAT refunds claims worth Tsh 2.8587 billion that were still being processed.


Traders have being complaining over delayed settlement of tax refund claims by TRA. A lot of the complaints centre on delayed refund of VAT for zero-rated supplies; refund of excess withholding tax paid on inputs and finished goods before introducing VAT, and refunds under the duty drawback scheme.


Although the VAT Act of 1997 provides for the payment of interest when VAT refunds are not effected within 30 days from the date of filing a claim, Luoga said TRA is of the opinion that it is unreasonable to pay interest at the commercial bank lending rate.


According to the VAT Act 1997, VAT repayments can be effected either on half yearly basis or on a monthly basis.


For half-yearly basis, this applies to VAT registered traders who have submitted six consecutive VAT returns, the first being a repayment return with credit balance.


Traders who are under monthly repayment terms are categorised as regular repayment traders.


A VAT rate of 20 per cent was introduced in Tanzania in July 1998, replacing the former sales tax in an effort to enhance tax in an effort to enhance tax revenue collections.


February 5, 2000


AT LAST, the long-standing controversy over toll charges between the State-owned Tanzania Telecommunications Company Limited (TTCL) and two local private cellular ‘phone companies has been resolved, and TTCL is now preparing to settle the claims.

For about a year now, there was a tug-of – war between TTCL on the one hand, and MIC –Tanzania Limited (Mobitel) and Tanzania Tri-Telecommunication company (Tritel) on the other side, on the question of telephone toll charges.

A toll charge is the levy that becomes due when a party calls another party by using a firms’ telephone line. If one uses a land line to call another party on a cell phone, TTCL (which owns the land lines in Tanzania) has to pay a toll charge to the cellular operator; and vice versa.

The chairman of TTCL’S board of directors, Professor Mathew Luhanga, recently told Business Times in Zanzibar that he has already instructed TTCL to settle the claims immediately.

Said Prof. Luhanga: "All exchanges are connected to TTCL which has more technical staff than any other operator in the telecommunication industry (and as such) can search for toll charges and come out with an exact figure that it owes the two firms."

Prof. Luhanga said he does not see any reason for the issue to go before the Tanzania Communication Commission (TCC), when it can be resolved "among themselves. The reality is that TTCL has to pay the two cellular phone operators; and what remains is the establishment of the exact amount," he pointed out.

Media reports have it that both Mobitel and Tritel had some money due to them, but that was being withheld by TTCL over the past one year.

Jim Bell, the Mobitel general manager, was sometime back quoted by Business Times as saying that TTCL was holding its money amounting to about USD 4 million. The sum was accumulating by the day. For its part, Tritel claims TTCL owes it more than USD 2 million.

The Communications Commission had already showed an inclination to settle the controversy, and had conducted a meeting between TTCL and Mobitel which fixed October 20 1999, as the reconciliation day when each party would put up its reconciled figures.

After reconciliation, the two firms were required to submit details thereof to the Commission. But according to TCC’s public relations manager, Mkumbwa Ally until late last December, TCC was yet to receive a response from the two.

The only development was the receipt by TCC of a copy of a letter from Mobitel addressed to TTCL querying the delay in finalizing compilation of the data for submission to TCC.

While Mobitel has been making follows-up on its money through TCC, Tritel is still waiting for TCC to issue a timetable for a meeting with TTCL to settle their part of toll charges issue.

In another development, TTCL will undergo privatization effective next month.

According to professor Luhanga, the Company is now preparing its infrastructure ready for privatization.






World tourism increases 3.2 per cent in 1999

World tourism increased 3.2 percent in 1999, a half point over the previous year, according to data given Tuesday by the World Tourism Organization (WTO).

At a press conference, WTO General Secretary Francesco Frangialli said, "it has been a record for several countries in the world" last year and highlighted the increase in this Pacific-Asian area.

According to Frangialli, the arrivals to tourists increased in the world to 657 million, meaning an increase of 3.2 percent over the previous year. The income of last year amounted to 455 billion dollars.

Frangialli said that "after two years of negative results the pacific and Asian regions became again the star of world tourism with an increase of 7.5 percent and reached a new record with almost 94 million international tourists."

In the same way there has been an increase in the Central American zone which registered an increased of 23 percent in 1999, the Middle East (17.5percent) and Africa (9percent); the western Mediterranean countries also have a good development by going towards Spain, France and North Africa, above all Morocco and Tunisia due to the Kosovo and Turkish situation.

According to the amount given by the WTO, Spain has the second place worldwide as far as tourism is concerned with 51.5 million visitors, just behind France in the first place with 71.4 million, and the same place in income with 25.179 billion dollars, behind the United States with 73 billion dollars.

China is in the fifth place with 25.179 billion visitors and seventh place in tourism income with 14 billion dollars.