Private schools to keep paying taxes - TRA

[BabuK]

Tanzania Revenue Authority (TRA)


Despite complaints by private school owners regarding the multiple taxes imposed on them, the Tanzania Revenue Authority (TRA) has directed them to continue to paying while their grievances are reviewed.

TRA’s statement follows complaints by the Tanzania Association of Managers and Owners of Non-Government Schools and Colleges (Tamongsco), of being taxed despite various tax exemptions issued by the government. According to section 64(8) of the income tax, upon obtaining a Charitable Status Ruling (CSR) from the Commissioner of domestic revenues all education providers are exempted.

Currently private schools are required to pay more than 10 taxes including property, land, corporation, Value Added Tax (VAT), local government, work permits and Occupational Safety and Health Administration (OSHA).

In a telephone interview with The Guardian, TRA Director for Research and Policy, Tonedeus Muganyizi said schools are required by the law to pay all taxes whether they do business or not.

He said the authority has received complaints from Tamongsco administration and is working on them, adding that in the meantime they are required by the law to continue paying the taxes.

“We are working on their complaints, we are also looking for experts to work on the matter but in the meantime they are supposed to pay all taxes including PAYE, and Skill Development Levy among others,” said Muganyizi.

Private school owners have also accused TRA of being reluctant to provide them with Taxpayer Identification Number (TIN) and CSR under the schools’ names and has instead has issued them under owners’ names so as to tax the schools separately.

Benjamin Nkonya the Tamongsco Secretary General told The Guardian that education stakeholders are exempted by law so as to reduce the burden of operational costs.

He said TRA has been refusing to provide the TIN and CSR to the schools as entities and instead issued the identifications under the owners’ names which is wrong.

He said in education law and policy, private schools have been exempted since they are not business oriented. “But these exemptions have become useless because TRA keeps taxing them.”

Nkonya said the education policy requires that every registered private school be service-oriented, not out to maximise profit.

Recently, Tamongsco said it is willing to reduce school fees by up to 30 percent if the government scraps all taxes imposed on them.

Tamongsco have also urged the government to scrap work permit fees imposed on teachers from the East Africa Community member states with teaching license from the ministry of Education and Vocational Training.

“There is no way that owners of private schools can manage to pay all of these levies without hiking the school fees,” said Nkonya.

He said school owners had agreed that if the government removed all taxes and levies, automatically school fees will go down.

“The government has scrapped the Skills and Development Levy (SDL) but we wish it could eliminate all levies. It is due to such taxes that the school fees are relatively high,” he said.

“Suppose school fee for private school is 1m/- and the government agreed to scarp all taxes, Tamongsco would advise the owners to reduce the fee by 30 percent which means fee will be 700,000/-,” he added.

Commenting on the matter of levies imposed on private schools, Permanent Secretary in the Ministry of Education and Vocational Training, Prof Sifuni Mchome was recently quoted as saying that the taxes are divided into different government departments.

In May this year, private school owners met with the parliamentary budget committee and the Commissioner of TRA in Dodoma to express their concerns.



SOURCE: THE GUARDIAN