The Tanzania Revenue Authority (TRA) has announced recently that it will install a system to monitor earnings from all telecommunications products and services including airtime on local calls. The (TRA) is working with the Tanzania Communication Regulatory Authority (TCRA) and the Bank of Tanzania (BoT) to implement the new system—the Telecommunications Revenue Assurance System (TRAS)—which will assist it to monitor the revenues generated by telecommunications companies including airtime sales earnings for local calls. It will also assist the TRA to collect revenue from the telecommunications sector efficiently and effectively.
Technology has assisted the TRA to improve revenue collection from the mobile phone service operators after the Telecommunication Traffic Monitoring System (TTMS) was installed. This monitors data and money transfers. However, the TTMS does not monitor airtime on local calls. The new monitoring system will complete another piece in the revenue collection puzzle. Having efficient and transparent systems in place will ensure that there is mutual trust on both sides—government and telecommunications operators—and that way, higher amounts of revenue will be realised from the estimated 39 million mobile phone subscribers in Tanzania.
The importance of technology to the revenue authorities in emerging countries cannot be over-emphasised. These sophisticated ICT systems have the ability to aggregate huge quantities of data giving a transparent bird’s eye view of all telecoms transactions and protect the revenue due to government.
The recent improvement in revenue collection in Tanzania may have been influenced by the Finance Act of 2016, which increased taxes like the excise duty on mobile money services, but monitoring is also extremely important so that government does not have to rely on the accuracy of reports in a self-declaratory system.
In a recent Parliamentary Committee on Infrastructure meeting, the comment was made that the telecoms companies are generating huge profits but their revenues records do not reflect what they earn.
The TRAS is expected to take 9 months to install counting from September 2016 when the implementation project was expected to start. Once the TRAS is up and running, the mobile operators will not be able to under-declare their revenues and the additional government revenues from taxes on the full mobile operator revenues could be ploughed back into the Tanzanian economy.
One of the main things affecting the Tanzanian economy is corruption which is a serious problem across all sectors of the economy. The most affected sectors are government procurement, land administration, taxation and customs. Petty corruption in dealings with traffic, customs and immigration officers deters investment so the sooner this can be brought under control the better.
Global challenges and developments are putting more pressure on key business sectors that are sensitive to economic cycles. The insights from Big Data—which ICT systems can provide— can help solve some of the biggest global business challenges. Many of these are also applicable to the sphere of government and policy-making.
President John Magafuli, elected in October 2015 has built up a reputation as an activist against corruption and excessive government spending since he was elected. This augurs well for the future. The President’s Office has apparently stated: “I want the government to collect all outstanding (tax) revenues and I will not hesitate to take action against anyone who becomes an obstacle in this tax collection drive.”
Tanzania’s telecommunications industry is by far the largest in East Africa in terms of turnover, with an annual revenue of approximately USD 1.2 billion for mobile phone companies. It is also characterised by the highest number of mobile subscribers (23.8 million) and service providers in the region.
The Tanzanian government can ill-afford losses of revenue, of whatever kind, especially from the telecoms industry, as these sorely needed revenues could be used for many socio-economic development projects. The revenues could be used to create jobs, alleviate poverty and improve the education system.
Revenue-assurance technology has been successfully deployed in many other emerging economies. They have enabled the governments of these countries to create new revenue streams of ± USD 1 billion in five years to finance their development priorities and lessen dependency on foreign aid. They ensure accurate real-time collection of traffic data and enable government to enforce its telecoms policies and maintain total control over the whole data collection and billing process.
The deployment of the telecommunications traffic monitoring system (TTMS) in Tanzania has proved its worth. It has been hailed as “not only a revolution, but also one of the greatest achievements to the country’s communications sector.” The new TRAS system should bring about added improvements. Overall, President Magafuli’s anti-corruption stance should be supported because it supports political stability, helps to shape political attitudes and participation in the country and encourages investment.
About the author
Suzette has a lively interest in the world around her – she has been a passionate writer for almost 30 years. She speaks several languages, has worked for several blue-chip companies, has BA Honours degrees in English and French as well as a mini MBA and a Certificate in French Language and Literature from the University of Aix-Marseilles, France.
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