Real estates contribution not enough

DarProperty Tz · 2013-08-06T16:39:05+00:00

Dar es Salaam. Despite the fact the real estate sub-sector is booming in the country, its contribution to the national income in terms revenue is negligible. It is mainly due to the governments failure to devise workable tax collection mechanisms for effective tapping into the potential of the real estate sub-sector that could support numerous development initiatives. The sub-sector, legislators say it is not contributing enough to the government through payment of property tax, because there are no clear and sustainable mechanisms of ensuring good management of real estate and property owners are made responsible to pay their taxes. There are some concerns that the Tanzania Revenue Authority (TRA), which has been mandated to collect tax from the sub-sector, does not have the required skills and expertise, especially in property valuation or enforcement of property tax payment. This was raised recently in the Parliament as legislators criticized the laxity of the government in collecting the readily available proceeds from the sub-sector by consistently coming every year with the same sources of revenue like alcohol, cigarettes, telecommunications, soft drinks and car levies, among others. This shows that the government has failed to identify new sources of revenue although parliamentarians propose them every year. The TRA will not necessarily be in a superior position to administer local property rates, as it has no particular expertise in property valuation or enforcement of property tax payment, said Ms Vicky Kamata (Special Seats Geita) as she contributed to the 2013/14 government budget. Ms Kamata said that despite the fact that Tanzania had a lot of skyscrapers and palatial buildings, including residential, commercial, and industrial buildings as well as hotels, there were still some weaknesses in the way revenue was collected and administered. In addition to the collection and taxpayer compliance problems caused by lack of a uniform local revenue system, she said lack of a uniform local revenue system hindered the systematic collection of data on local government revenue. She noted that, although the TRA lacked some expertise in property valuation or enforcement of property tax payment, this should not preclude the TRA from acting as a collection agent for the local government authorities (LGA) upon a mutual agreement between the TRA and the LGA. Property tax has been identified by various studies as one of the local taxes in Tanzania that has not lived up to its revenue potential, which dcalls for improvement to make the tax collection system more effective. This includes improving the process of maintaining the cadaster (an official register containing information on the value, extent, and ownership of land for the purposes of taxation), valuation, assessment, administration, collection, and enforcement of the property tax. Currently, in Tanzania inequitable property taxation is also found in terms of taxing only the identified properties captured in the valuation roll and other local government registers, occasioning a room for some property owners whose properties are not identified and registered to avoid paying tax or evade it. With the resources we have in the country, Tanzania should have been one of the economic giants in Africa. But due to a poor tax collection system, it still lags behind in development. Sourced from, the Citizen, Tanzania. July `13 By Sturmius Mtweve. Check out the Real Estate listings in Tanzania, visit www.darproperty.co.tz

Thread starter DarProperty Tz
Start date Aug 6, 2013

DarProperty Tz

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Aug 6, 2013

Governor of Bettors-GB

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Real estates contribution not enough

DarProperty Tz

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Real estates contribution not enough