AnnualReport2014 2015

ANNUAL REPORT
CONTACTS
Tanzania Revenue Authority
Postcode: 28 Edward Sokoine Drive
2014 - 2015
11105 Mchafukoge
Ilala CBD ANNUAL REPORT
P.O.Box 11491 Dar es Salaam, Tanzania
Telephone:+255 22 211 9591-4,+255 22 2127080
E-mail: [email protected]
2014 - 2015
website: www.tra.go.tz
Call Centre
[email protected]
Toll free:
0800 780078
0800 750075
For any misconduct by TRA 0fficials call:

+255 689 122515 SMS: +255 689 122516
To unearth Tax evaders call:
+255 22 2137638 or +255 784 210209
TANZANIA REVENUE AUTHORITY
ANNUAL REPORT
2014 - 2015
TRA HEADQUARTERS
DAR ES SALAAM
ii
i Annual Report 2014 - 2015
TABLE OF CONTENTS
TABLE OF CONTENTS............................................................................................. III
TRA VISION,MISSION AND CORE VALUES.......................................................... IV
SNAP SHORT OF OUR PERFORMANCE................................................................V
LETTER OF TRANSMITTAL.....................................................................................VI
CHAIRMAN’S STATEMENT....................................................................................... 1
COMMISSIONER GENERAL’S STATEMENT............................................................ 5
MANAGEMENT REPORT.......................................................................................... 7
STATEMENT OF DIRECTORS’ RESPONSIBILITY................................................. 39
AUTHORITY INFORMATION................................................................................... 40
DIRECTORS’ REPORT............................................................................................ 44
TANZANIA REVENUE AUTHORITY AUDITED REVENUE STATEMENTS............. 81
TANZANIA REVENUE AUTHORITY AUDITED FINANCIAL STATEMENTS........111
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Annual Report 2014 - 2015 ii
Vision
“To increase domestic revenue through enhancement of voluntary
tax compliance”
TRA Mission
“We make it easy to pay tax and make lives better”
TRA Core Values

Accountability: We create and sustain an organization that values
and promotes accountability.
Integrity: We believe in being fair and honest in all our

dealings with taxpayers and other stakeholders.
Professionalism: We are committed to applying the law consistently,

responsibly and with credibility using the skills and
knowledge as a prerequisite in administering our
requirements
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iii Annual Report 2014 - 2015
SNAPSHOT OF OUR PERFORMANCE
Actual annual collection for the year 2014/15 for Tanzania Mainland amounted to TZS
9,918.8 billion net of refunds against the annual target of TZS 11,261.7 billion representing a
performance of 88.1% and growth of 6.8% compared to actual collections of the same period
in 2013/14 which was TZS 9,289.0 billion. Revenue collections for Zanzibar during the year
2014/15 amounted to TZS 143.9 billion which is a performance of 86.7% against the target of
166.1 billion. The collection represents a growth of 5.3% compared to actual collections of the
year 2013/14 which was TZS 136.7 billion. A summary of performance for the past ten years is
depicted herein below:
(TZS in Billions)
MAINLAND 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/2015
Revenue
1,602.90 1,997.10 2,423.00 3,457.80 4,497.10 4,855.90 5,652.60 6,228.80 7,871.40 10,320.10 11,261.74
Target
Actual
1,695.20 2,040.60 2,666.90 3,546.50 4,207.40 4,637.50 5,367.20 6,494.90 7,802.30 9,289.00 9,918.82
Collection
Performance 105.80% 102.20% 110.00% 102.50% 93.50% 95.50% 94.90% 104.00% 99.10% 90.01% 88.08%
Average
Monthly 141.3 170.1 222.2 295.5 350.6 386.5 447.3 541.2 650.2 774.1 826.6
collections
Annual
Revenue 20.70% 20.37% 30.69% 32.98% 18.63% 10.22% 15.73% 21.01% 20.12% 19.05% 6.78%
Growth
GDP at
13,049.00 15,315.00 19,253.00 23,142.70 27,530.30 30,321.30 35,026.70 41,125.30 49,011.70 55,558.95 84,279.92
Market price
Revenue
12.99% 13.32% 13.85% 15.32% 15.28% 15.29% 15.40% 15.91% 15.00% 16.71% 11.76%
Yield
ZANZIBAR 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/2012 2012/13 2013/14 2014/15
Revenue
28.50 29.20 25.80 36.20 49.20 63.20 69.20 100.60 106.70 147.90 166.1
Target
Actual
20.50 22.40 30.40 39.90 53.90 60.00 76.30 91.60 103.90 136.70 144.0
Collection
Performance 72.60% 76.70% 118.00% 110.20% 109.50% 94.90% 110.30% 91.00% 97.30% 92.43% 86.71%
Average
Monthly 1.7 1.9 2.5 3.3 4.5 5.0 6.4 7.6 8.7 11.4 12.0
collections
Annual
Revenue 4.00% 9.26% 35.71% 31.25% 35.09% 11.31% 27.16% 20.05% 13.42% 31.56% 5.34%
Growth
FOR
ENTIRE 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/2012 2012/13 2013/14 2014/15
TRA
Income 50.6 71.1 84.8 93.4 134.8 142 142.5 152.1 217.7 255.0 242.5
Expenditure 49.7 66.5 85.9 95.6 125.6 136.4 145.8 155.5 192.9 229.3 254.8
Net Assets 18.9 45.5 39.7 39.5 48.7 55.1 51.8 48.5 242.7 269.0 258.4
Cost of
2.90% 3.22% 3.18% 2.67% 2.95% 2.90% 2.68% 2.36% 2.44% 2.43% 2.53%
Collection
No. of
3,412 3,352 3,324 3,413 3,388 3,430 3,627 3,831 4,006 4,047 4,237
Employee
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Annual Report 2014 - 2015 iv
Letter of Transmittal
Hon. Dr Philip I. Mpango (MP)

Minister of Finance and Planning
Hon. Dr Philip I. Mpango (MP),

Minister of Finance and Planning,
P.O. Box 9111,
Dar es Salaam.
In accordance with Section 26 (3) of the (TRA) Act Chapter 399 of the Laws of the
United Republic of Tanzania, I have the honour to submit to you the Authority’s
Annual Report for the year ended 30th June, 2015.
Mr Bernard S. Mchomvu
Board Chairman
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v Annual Report 2014 - 2015
Chairman’s Statement
Mr. Bernard S. Mchomvu

Board Chairman
1.0 Introduction
The 2014/15 Report marks the end of the second year of the implementation of the
Tanzania Revenue Authority’s (TRA) strategically designed five years fourth Corporate
Plan (CP4) which commenced in July 2013. As such, the third year of the Plan ended in
June 2016 and as of July 2016 we started the fourth year of the Plan.
In brief, the main focus of CP4 is to progressively increase the share of domestic tax
generated revenues with the view to comparatively reduce survival dependency on
international trade related taxes. To be more specific, the CP4 is pivoted on the three
Strategic Themes of Convenience, Compliance and Continual Improvement, elements
humbly driven by a number of clearly defined Strategic Objectives and Initiatives.
Therefore, this Report is intended to briefly provide the 2014/15 Financial year status of
execution of the defined initiatives, performance milestones against the set targets of the
Strategic Measures, including Key Performance Indicators.
A total of 42 initiatives were planned for implementation during 2014/15 and up to 30th
June, 2015 a total of 14 initiatives had been completed giving a performance level of
33%. The remaining 28 initiatives have been rolled over to 2015/16 and some of them
can best be defined as being multi-year projects or undertakings. Cumulatively, a total of
22 initiatives of CP4 had been completed by end of June, 2015 which represents 34% of
the overall CP4 initiatives. In total CP4 has 64 initiatives that run up to 2017/18.
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Annual Report 2014 - 2015
Chairman’s Statement (Continued)
2.0 Core Functions of Tanzania Revenue Authority

The Authority’s core functions are stipulated under Section 5 of the TRA Act cap 399
which include assessment, collections and accounting for Government Revenue;
administering effectively and efficiently all revenue laws of the Central Government;
advising the Government on all matters related to fiscal policy; promoting voluntary tax
compliance; improving the quality of services to taxpayers; counteracting fraud and any
other forms of tax evasions, including the generation of trade statistics and publications.
The Fourth Corporate Plan (2013/14-2017/18) focuses on enhancing taxpayer

Convenience while interacting with TRA, to enhance tax Compliance and continue
adopting innovative practices in tax administration through continual improvements of
services and processes to realise the objectives of the fourth Corporate Plan.
3.0 Macroeconomic Environment

The Tanzania economy continued to perform well in terms of economic growth and
performance of other macroeconomic variables. Consistent with a steady economic
growth of 7.3 per cent in 2014/15, Consumer Price Index inflation continued to decline
from 6.4 per cent in 2013/14 to 4.5 per cent recorded in 2014/15. In the outlook, the
Tanzanian economy is projected to grow in real terms at 7.5 per cent in 2015/16 from
a rate of 7.3 per cent of 2014/15, all supported by an increase in actual production
activities and positive improvements covering a range of other enabling macroeconomic
variables.
4.0 Implementation Challenges

The original CP4 was prepared and approved by the Board of Directors during the
2012/13 financial year. As already stated, the Plan had a total of 64 strategic initiatives
spreading over the entire period of its implementation (2013/14 - 2017/18). After the
initial two years of its execution, new developments and challenges emerged which
necessitated an improvement review.
For practical reasons, the original CP4 vision was based on a ratio of actual tax revenue
collection pegged to the GDP. Under CP4 the 2018 Plan end target was to achieve
a collection ratio rate of 19.9 % of the GDP. On the other hand, the Government of
Tanzania decided to rebase its GDP from 2001 to 2007, which compelled TRA to change
its Vision.
At the same time, the execution of some of the initiatives were behind schedule and
hence needed to be re-aligned given the available resources, both human and financial.
Consequentially, the resulting revised CP4 has now a total of 70 initiatives, all to be
implemented during the period of five years (2013/14 – 2017/18). The current CP4
2018 end target GDP ratio is pegged at 13.9%. In figure terms this is projected to yield
Tsh16,391.0 billion during the 2017/18 financial year.
5.0 Major Achievements

TRA continued to undertake fiscal policy measures aimed at improving domestic revenue
collection by expanding the tax base. Particularly, this was done through an identification
2
of new sources of revenue as well as through the reduction of unnecessary tax exemptions
in order to enable the Government to finance much of its budget requirements own
domestic taxes resources. The annual collection for the year 2014/15 was targeted
at TZS 11,261.7 billion net of refunds for Tanzania Mainland and TZS 166.1 billion for
Zanzibar. Out of the targeted amount, TZS 203.82 billion was associated with new tax
measures. The measures comprised also of income tax and excise duty reforms.
In terms of actual collection, TRA was able to collect 9,918.8 billion net of refunds. For
Zanzibar actual collection was TZS 143.9 billion. The fact is that we could not meet the
set target as per CP4. Despite there being some good reasons for not able to achieve
the target, still the Government must get the money it requires to deliver the expected
services to the public. As such as a country we had no choice but to double our efforts
for the year 2015/16 with the view to do better.
Some of the measures taken were on the Income Tax reforms which comprised of the
introduction of a 10% final Withholding tax on Directors’ Fees and an increase of the rate
of Presumptive Tax from 2% to 4%. On the other hand, excise duty reforms involved the
removal of excise duty on money transfer (0.15%); an imposition of excise duty (10%)
on Bank Charges or Service Fees in respect of Money Transfers; increase of excise duty
from 25% to 30% in respect of imported vehicles aged more than 10 years from the year
of manufacture (excluding passenger motor vehicles); increase of excise duty rate from
5% to 10% in respect of imported passenger motor vehicles under specified HS codes;
increase of excise duty on tobacco products by 25%; and extension of excise duty on
imported furniture which was fixed at 15%.
In the course of reducing exemptions, cement and steel round rods were removed from
the List of deemed capital goods under TIC. In the same drive to expand the tax base,
all tax exemptions on investments granted to Telecommunication Operators and other
investors in Tanzania were removed. There were also few refinements for operational
efficiency of the VAT system following the enactment of the New VAT Act in July 2014.
Further, streamlining of both the administration and operational processes has been
a top agenda in the course of boosting revenue collection. The Enhancement of the
Block Management System; working hard on having in place an effective and efficient
EFD enforcement mechanism; the use of mobile payment systems; the introduction of
TANCIS for customs operations and the tighter control of transit goods have also been
instrumental in enhancing revenue collection.
Much as TRA has put in more efforts to enforce the use of EFDs for the proper capturing
of volumes of sales and reduction of exemptions, still there is stiff opposition by some
business community groups that we continue to plead for the Government’s hand. We
are happy that in this front the Government is now united in action. As TRA we had our
own internal problems to put right and the process continues and we will not stop until
the whole house is in order. It is a war that must be won for the good of the Government
and the people.
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6.0 Conclusion
On behalf of the Board of Directors, I thank the Government for the support extended
to the Authority, including by way of financing, guidance and direction provided during
the year under review and beyond. I would also like to thank the TRA Management and
all the hard working staff for their dedication, commitment and consistent focus on the
agreed corporate objectives in their day to day activities.
Let me also take this opportunity to extend my sincere gratitude to all our stakeholders
especially the Taxpayers, Development Partners, Suppliers and the General Public who
have diligently exhibited great trust in us and in our services. Lastly, I would like to extend
my much gratitude to my colleagues in the TRA Board of Directors for their valuable
participation and contribution in the course of pursuing of our responsibilities as Board
members in the spirit of One War One Team. We have to keep moving forward as a
credible and respectable institution.
Mr. Bernard S. Mchomvu

BOARD CHAIRMAN
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Commisioner General’s Statement
Mr. Alphayo. J. Kidata,

Commissioner General
1.0 INTRODUCTION
Tanzania Revenue Authority (TRA) has completed the second year of implementation
of the Fourth Corporate Plan (CP4) which commenced in July 2014. The CP4 is mainly
focused on increasing share of domestic taxes collection to warrant reduction of
dependency on international trade taxes. CP4 is pivoted on the three Strategic Themes
of Convenience, Compliance and Continual Improvement which are driven by a number
of clearly defined Strategic Objectives and Initiatives.
2.0 CORE FUNCTIONS

The Authority’s core functions are stipulated in the Tanzania Revenue Authority Act;
Cap 399 which include assessment, collection and accounting for the Government
revenues; promoting voluntary compliance; and advising the Government on all matters
pertaining to fiscal policy.
3.0 REVENUE COLLECTION

During the financial year 2014/15 the overall revenue collections for Tanzania Mainland
amounted to Shs 9,918.8 billion net of refunds. This is equivalent to 88.1% performance
against the target of Shs 11,261.7 billion, which reflects a growth of 6.8% over the
previous year 2013/14. Revenue collections for Zanzibar were Shs 143.9 billion which is
a performance of 86.7% against the target of Shs 166.1 billion. The collection represents
a growth of 5.3% compared to actual collections of the previous year 2013/14 which was
Shs 136.7 billion.
5
Commisioner General’s Statement (Continued)
4.0 AUTOMATION
TRA continued to enhance electronic services to simplify filing of tax returns, registrations,
payments and clearance of goods. During this financial year TRA finalized rollout of
Tanzania Customs Integrated System (TANCIS) to all ports, airports and border stations
to facilitate speedy clearance of goods. Further, the Authority emphasised on usage
of Taxbank interface and mobile payments. The implementation of Taxbank facilitates
interface of TRA systems with commercial bank’s core banking system. Thus, enables
swifter realization of revenue collections and updating taxpayers’ accounts in real time.
5.0 ELECTRONIC FISCAL DEVICES (EFDs)

The main objective of introducing EFDs is to increase controls, curb possible loopholes
for revenue leakage in the retail and wholesale trade sectors and establish effective
strategies for smooth and sustained tax collection. As at 30th June 2015, a total of 32,187
taxpayers have acquired EFDs.
6.0 CHALLENGES
The main challenge that TRA has encountered is the ongoing reluctance to purchase
and use Electronic Fiscal Devices (EFDs) by taxpayers on one hand and the public not
demanding receipts for goods purchased on the other hand. This denies the Authority
the opportunity to asses and collect the correct taxes.
7.0 WAY FORWARD

TRA will continue implementing the remaining CP4 initiatives which aim at creating
conducive environment for achieving its focus of increasing domestic taxes. One of the
major initiatives to be implemented during the financial year 2015/16 is introduction of a
robust Integrated Domestic Revenue Administration System (IDRAS) that will enhance
electronic services and simplify taxpayer compliance.
8.0 CONCLUSION
I would like to thank the Government and the TRA Board of Directors for the continued
support and guidance. I would also like to thank the staff for their dedication, commitment
and diligence in their day to day activities. I would also like to extend my sincere gratitude
to all of our stakeholders, especially the Taxpayers, Development Partners and suppliers
for their trust and support. Lastly, I would like to extend my gratitude to my colleagues in
the TRA Management for their valuable support and cooperation. We look forward to a
successful new financial year 2015/16.
“Together We Build Our Nation”
Alphayo J. Kidata.
COMMISSIONER GENERAL
6
MANAGEMENT REPORT
1.0 INTRODUCTION
During the financial year 2014/15, TRA completed second year of CP4 implementation.
The Plan is hinged on the three Strategic Themes of Convenience, Compliance and
Continual Improvement which are driven by a number of clearly defined Strategic
Objectives and Initiatives. The report contains overview of revenue performance,
implementation status of initiatives and areas of assistance by Development Partners
(DPs) to CP4 during the year 2014/15.
The annual collection targets target was TZS 11,261.7 billion net of refunds for Tanzania
Mainland and TZS 166.1 billion for Zanzibar. The target is equivalent to an average
monthly collection of TZS 938.5 billion for Tanzania Mainland and TZS 13.8 billion
for Zanzibar. This is an increase of 21.2% from net actual collections for 2013/14 of
TZS 9,289.0 billion for Tanzania Mainland; and an increase of 21.5% from the actual
collections of TZS 136.7 billion for 2013/14 for Zanzibar.
Actual annual collection for the year 2014/15 amounted to TZS 9,918.8 billion net
of refunds for Tanzania Mainland against the annual target of TZS 11,261.7 billion
representing a performance of 88.1% and growth of 6.8% compared to actual collections
of the same period in 2013/14 which was TZS 9,289.0 billion. Revenue collections for
Zanzibar during the year 2014/15 amounted to TZS 143.9 billion which is a performance
of 86.7% against the target of TZS 166.1 billion. The collection represents a growth of
5.3% compared to actual collections of the year 2013/14 which was TZS 136.7 billion.
2.0 PERFORMANCE
2.1 TRA Functions
The Act, Cap 399 (Revised 2006) gives the Authority the mandate to perform the
following functions:-
a) Assess, collect and account for Government Revenue;
b) Administer effectively and efficiently all the revenue laws of the Central
Government;
c) Advise the Government on all matters related to fiscal policy;
d) Promote voluntary tax compliance;
e) Improve the quality of services to the taxpayers;
f) Counteract fraud and other forms of tax evasion; and
g) Produce trade statistics and publications.
h) Other functions determined by the Minister responsible for Finance.
2.2 Overall Revenue Collection

2.2.1 Collections in Mainland Tanzania
During the year under review, the overall revenue collection performance for Tanzania
Mainland amounted to TZS 9,918.8 billion equivalent to 88.1% against the target of
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MANAGEMENT REPORT (CONTINUED)
TZS 11,261.7 billion, which reflects a growth of 6.8% over the previous year 2013/14.
The underperformance in revenue collection is attributed to various factors including;
a) Amendments of corporation tax led to a performance of 61.8% of the target of
TZS1,503 billion for LTD and 83.2% of the target of TZS 327 billion for DRD
b) Taxpayers resistance to pay individual income tax due to increase in presumptive
tax rates by almost 100% led to performance of 77.1% (Target TZS 153
billion)
c) Non-payment of withholding tax (IRMD) by some companies led to a performance
of 50% (Target TZS 25 billion) DRD
d) Underperformance on Fuel Levy that performed at 86.4% of the target of TZS 721
billion and Excise duty performed at 95.8% of the target of TZS 949.7 billion
Revenue performance during the year under review is summarised and illustrated in
Figure 1 below.
Figure 1: Monthly Revenue Collection Performance July 2014 – June 2015 - Tanzania Mainland
(Billions TZS)
Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15
TARGET 757.7 775.2 1,158.7 828.1 817.2 1,237.1 831.4 796.6 1,224.4 812.8 805.8 1,216.7
ACTUAL 723.1 737.9 929.6 809.8 738.8 994.8 720.1 736.6 976.6 715.8 795.2 1,040.5
Source: Finance Department
2.2.2 TRA Collections in Zanzibar

During financial year 2014/15 revenue collections for Zanzibar amounted to TZS 143.9 billion
which is a performance of 86.7% against the target of TZS 166.1 billion. The collection represents
a growth of 5.3% compared to actual collections of the previous year 2013/14 which was TZS
136.7 billion as summarized and illustrated in Figure 2 below.
8
Figure 2: Monthly Revenue Collection Performance for the Period July 2014 – June 2015 for Zanzibar.
(Billions TZS)
2.3 Departmental Performance in Tanzania Mainland

In the financial year 2014/15, revenue growth by departments was 10.53% for Customs and
Excise, -2.7% for Large Taxpayers and 23.7% for Domestic Revenue. Revenue contribution by
department to the total tax revenue collected was 40.3% for Large Taxpayers, 41.1% for Customs
and Excise and 18.6% for Domestic Revenue Table 1 and Figure 3 show the summary of the
performance and visual presentation for each department respectively.
Table 1: Revenue Collection Performance for the Period July 2014 – June 2015 Tanzania Mainland
(Billion TZS)
July 2013– June 2014 July 2014 - June 2015

DEPARTMENT PERF PERF GROWTH
TARGET ACTUAL TARGET ACTUAL
Domestic Revenue 1,781.7 1,490.9 83.7% 1,994.9 1,845.1 92.5% 23.7%
Large Taxpayer 4,382.0 4,110.8 93.8% 4,891.0 3,998.4 81.7% -2.7%
Customs & Excise 4,156.3 3,687.3 88.7% 4,375.8 4,075.4 93.1% 10.5%
Total 10,320.0 9,289.0 90.0% 11,261.7 9,918.9 88.1% 6.8%
9
Figure 3: Departmental Net Revenue Share Contribution for the Year 2014/15
Source: TRA Audited Accounts
2.3.1 Customs and Excise Department

The Department collected a total of TZS 4,075.4 billion during the year under review
against the target of TZS. 4,375.8 billion which represents a performance level of 93.1%.
During the year under review the following tax items performed above 90% namely Export
duty and levy (135%), Excise duty imports (125%) and VAT imports (96%).
During the period under review Customs and Excise Department faced a decline in
revenue growth from 23.3% recorded in June 2014 to 10.5% recorded in June 2015 due
to decline on value of imported dutiable and taxable goods.
The graphical presentation of the total revenue collection by the department on monthly
basis for the year 2014/15 is shown in Figure 4 below.
Figure 4: CED Monthly Revenue Collection Performance 2014/15
TZS in millions
500,000
400,000
300,000
200,000 Target
100,000 Actual
Target 361,024 361,200 367,690 363,744 364,815 368,840 363,041 364,475 369,382 362,652 360,721 368,265
Actual 306,817 348,072 337,225 368,712 319,710 347,186 334,239 298,728 337,956 315,283 383,408 385,961
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2.3.2 Domestic Revenue Department

During the year 2014/15 the Department collected revenue net of refund TZS 1,845.1
billion against the target of TZS 1,994.9 billion which is a performance of 92.5%. The
department had a target to collect gross VAT on local consumption of TZS 431.4 billion
with actual collections being TZS 448.4 billion, representing 103.9% performance rate.
The tax revenue collected from stamp duty, departure charges, and motor vehicles taxes
were TZS 240.6 billion against the target of TZS 264.8 billion hence a performance rate
of 90.9%.
Additionally, the direct taxes contributed TZS 1,195.3 billion against the target of
TZS 1,322.7 billion which is equivalent to 90.4%. The targets of Direct Taxes were
attained in the following sectors: Transport 140.2%, W/Tax (G&S) 105%, W/Tax Bank
Interest 457.5%, Bed night Levy 282.7%, and Skills & Development Levy 115.6%. The
Department’s performance for the year on monthly basis is shown in Figure 5 below.
Figure 5: DRD Monthly Revenue Collection Performance 2014/15

TZS in millions
Target 132,908 144,833 183,883 154,125 147,497 229,586 149,229 139,741 220,956 139,212 141,782 211,205
Actual 151,568 128,101 169,539 145,147 136,179 199,203 140,912 137,827 177,796 134,084 131,850 185,078
2.3.3 Large Taxpayers Department

The Large Taxpayers’ Department currently is serving 450 taxpayers countrywide on
domestic taxes related services. In financial year 2014/15, the Department collected
net revenue amounting to TZS 3,998.4 billion against the target of TZS 4,891.0 billion
which represents a performance rate of 81.7%. The revenue performances item-wise
11
during the period under review were as follows: Corporate Tax 61.8%, Employment
Taxes 92.2%, W/Tax on Goods &services 84.3%, and Excise Duty Local 84.3%. Other
item performances include VAT 98.3%, Withholding Taxes 88.7%, Stamp Duty 94.4%
and Departure charges 74.5%. The Department’s performance for the year on monthly
basis is shown in Figure 6 below.
Figure 6: LTD Monthly Revenue Collection Performance 2014/15
TZS in millions
Target 263,825 269,249 607,143 310,259 304,957 638,717 319,164 292,420 634,130 310,982 303,365 637,222
Actual 264,695 261,767 422,852 295,978 282,874 448,425 244,994 300,036 460,831 266,441 279,992 469,467
2.4 Revenue Collections in Zanzibar

TRA Zanzibar is mandated to collect Income Taxes and Customs Taxes. Other domestic
taxes in Zanzibar are collected by the Zanzibar Revenue Board (ZRB). This report relates
to information on taxes collected by TRA Zanzibar. During the year ended 30th June
2015 revenue collection by TRA Zanzibar amounted to TZS 143.9 billion compared
to TZS 136.7 billion in 2013/14 which represents a growth rate of 5.3%. In terms of
meeting targets, TRA Zanzibar performed 86.7% of the targeted amount TZS 166.1
billion. Figure 7 shows monthly revenue collection against the targets TRA Zanzibar for
the year 2014/15.
12
Figure 7: Monthly Revenue Collection TRA Zanzibar 2014/15

TZS in Millions
Source: TRA Revenue Collection Reports
Revenue collection by the TRA Zanzibar from Customs was TZS 88.0 billion against
TZS 87.6 billion realized in the year 2013/14. This is an increase of 0.5%. The revenue
collected from Customs during the same year represents 61.1% of the total TRA collections
in Zanzibar. The revenue collection from Domestic Taxes for the year under review was
TZS 56.0 billion against target of TZS 55.5 billion thus making a performance rate of
100.8%. The revenue growth for Domestic revenue in the year under review was 14.1%
compared to revenue collection of the previous year which was TZS 49.1 billion.
2.5 Results on Key Performance Indicators and Strategic Measures

Key Performance Indicators measure the nature and scope of efficiency and effectiveness
of TRA operations. The target for TIN registered taxpayers up to 30th June 2015 was
2,447,730, whereas the actual taxpayers registered for TIN was 1,990,032 which is a
performance of 81%. The target for VAT registration by 30th June 2015 was 28,550;
while the actual number of VAT registered was 25,908 by 30th June 2015 which is a
performance rate of 91%. Another indicator was to process 85% of the total refund
claims whereas the actual performance rate achieved was 71% as at 30th June 2015.
KPIs for Customs operations indicate that TRA has attended to 86%, 82% and 64% of
Customs clearance within 24 hours; against annual targets of 94%, 70%, and 90% for
land border stations, Dar es Salaam Port and JNIA respectively. On the other hand,
Cargo clearance times from arrival to removal at DSM port have improved from 13 days
recorded in December 2014 to 11 days recorded in June 2015. The target of effectiveness,
in terms of revenue collection performance; DRD was 92%, LTD was 82.2% and Custom
91.8%. For the Strategic Performance Measures 2 Strategic
Measures surpassed or attained the planned targets. Strategic Measures that surpassed
or attained target include corruption perception index which is 47% out of the targeted
46% and average time taken to accomplish Customs clearance – lodgement to issuance
of release order at DSM port which is 0.2 day out of the targeted 1. Table 2 & 3 below
provides Key Performance Indicators and Strategic Measures status as at 30th June
2015.
13
Table 2: KEY PERFORMANCE INDICATORS REPORT

Baseline Target Actual Target Actual
Department Area Particulars
2012/13 2013/14 2013/14 2014/15 2014/15
Customs and % Customs clearance made within 24 LAND BORDER 91 96 81 94 86
Excise hours(Lodgement to Issuance of Customs STATIONS
Release Order)
% Customs clearance made within 24 DSM PORT 41 95 36 70 82

hours(Lodgement to Issuance of Customs
Release Order)
% Customs clearance made within 24 AIRPORT - JNIA 80 90 78 90 64

hours(Lodgement to Issuance of Customs
Release Order)
% of Cargo Manifests submitted/registered AIRPORT - JNIA 0 100 0 100 2

before arrival of vessel/flight
% of Cargo Manifests submitted/registered DSM port 89 100 91 95 93

before arrival of vessel/flight
Average Time Taken to accomplish Customs LAND BORDER 1 0 2 1 0.9

Clearance - Lodgement to Issuance of STATIONS
Release Order
Average Time Taken to accomplish Customs AIRPORT - JNIA 1 0 1 1 1.4

Clearance - Lodgement to Issuance of
Release Order
Average Time Taken to accomplish Customs DSM Port 3 1 4 1 0.2

Clearance - Lodgement to Issuance of
Release Order
Average Time Taken to clear goods - Arrival LAND BORDER 1 1 2 1 2

to Removal STATIONS
Average Time Taken to clear goods - Arrival AIRPORT - JNIA 3 2 4 2 4

to Removal
Average Time Taken to clear goods - Arrival DSM Port 9 8 11 7 11

to Removal
Revenue Collection Performance (%) 100 100 88.7 100 92.8
Domestic Percentage of VAT refunds made within a 78 85 74 85 71

Revenue month
Registered Taxpayers VAT Registered 21,446 28,550 24,346 28,550 25,908
Registered Taxpayers TIN Registered 1,609,420 2,128,460 1,783,511 2,447,730 1,990,032
Revenue Collection Performance (%) 100 100 83.7 100 92.7
Total Revenue realised from audits/revenue 10 10 12 10 13

collected
Large Number of Taxpayer accounting for 80% of 50 52 52 54 53

Taxpayers Revenue
Registered Taxpayers 450 450 450 450 450
Revenue Collection Performance (%) 100 100 94 100 82
Internal Corruption Perception Index Stakeholders 50 48 47 46 47

Affairs Perception (%)
Taxpayer Percentage of Taxpayers awareness on tax Stakeholders 80 96 95 90 78

Services and education programs Perception (%)
Education
Percentage of written enquires attended Website enquiries
95 96 71 97 97
within seven days (%)
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Table 3: STRATEGIC MEASURES

Perspective Strategic Objective Measures Baseline Target Actual Target Actual
2012/13 2013/14 2013/14 2014/15 2014/15
Improve efficiency in % Cost of collection 2.8 3 2.4 2.2 2.5
collection by reducing
cost and arrears
Improve efficiency in % of Arrears to 5 5 1.1 4 3.6
collection by reducing domestic revenue
cost and arrears assessed
Financial
Increase domestic % Contribution 71 73 73 74 70
revenue contribution from large and
specialized
taxpayers
Increase domestic % Domestic 62 63 62 64 60%
revenue contribution revenue contribution
To be a prompt, % Self Service 40 45 45 60 50
technology enabled
proactive partner
To be a prompt, % Voluntary 45 50 55 96.5*
Customer technology enabled Compliance
proactive partner
To be a prompt, Stakeholder 60 65 68.5 70 **
technology enabled perception Index
proactive partner
Simplify registration, % Self-assessment 100 100 100 100 100
assessment and
payment to increase
self-service
Simplify registration, Average time 24 18 18 12 12
assessment and (hours) to pay tax
payment to increase (Large Taxpayers)
self-service
Simplify registration, Average time (days) 1 1 1 1 2
assessment and to register taxpayer
payment to increase
self-service
Promote prompt Average time (Days) 9 8 11 7 11
Internal
clearance to improve taken to clear goods
Processes
trade facilitation (DSM Port)
Drive effectiveness in % Objections cases
collection, accounting, settled 40 40 69.5 40 46
audit, investigation, and
objections
Drive effectiveness in % of on-time 95 95 100 95 95
collection, accounting, reporting revenue
audit, investigation, and collection(Large
objections Taxpayers)
Promote segment % Coverage per 50 60 - 65 50
focused education and Segment
service to drive voluntary
compliance
15
Perspective Strategic Objective Measures Baseline Target Actual Target Actual

2012/13 2013/14 2013/14 2014/15 2014/15
Improve Strategic % Employees 50 95 - 95 69
Human Resource trained as per
Capacity training needs
Develop a culture that % of employees 10 20 - 40 100
drives performance, scorecards aligned
innovation, collaboration to corporate
and leadership objective
Improve Strategic Employees 0 0 0 0 0
Human Resource Perception Index
Capacity
Improve Strategic Skills Index 5 15 - 25 18
Human Resource
Capacity
Learning & Develop Culture that % Implementation 95 100 22 100 34
Innovations Drives Performance, of Corporate Plan
Innovation, Collaboration Initiatives
and Leadership
Develop Culture that % Key positions with 0 0 - 20 15
Drives Performance, possible successors
Innovation, Collaboration
and Leadership
Increase ICT availability ICT Availability 84 98 95 98 94
and utilization (Outreach and
Uptime) Index
Increase ICT availability ICT Utilization Index 60 100 - 100 68
and utilization
Enhance good % Reduction in 2 5 5 15 12
governance capability integrity cases
Key: *LTD only ratio of expected returns to filed returns

**Not conducted during the year 2014/15
3.0 SIGNIFICANT ACHIEVEMENTS IN CP4 IMPLEMENTATION

The Fourth Corporate Plan is based on the three Strategic Themes of Convenience,
Compliance and Continual Improvement which lay a foundation upon which the
strategic direction of TRA is based.
During financial year 2014/15, 42 initiatives were planned for implementation. Out of the
planned initiatives, only 14 initiatives were completed by 30th June, 2015 hence making
a performance of 33%. Initiatives completed in year 2014/15 are:
(i). Designing of social media strategy to interact with stakeholders
(ii). Implementing one stop border post operations
(iii). Converting tax laws and manuals to be available electronically
(iv). Establishing taxpayer advocacy services(Tax ombudsman)
(v). Developing mechanism to improve consistency of responses to taxpayers and
first time right across all channels;
16
(vi). Developing Formulation of parameters for Legal services involvement in tax
operations;
(vii). Developing Streamlining audit and investigation processes to reduce
objections
(viii). Implementing and monitoring an integrated risk based compliance strategy for
domestic taxes;
(ix). Interfacing IT systems with banks and other government departments/agencies
for tax purposes;
(x). Enhancing forensic laboratories ( Dar es salaam and Mwanza);
(xi). Align training needs analysis to the performance management system
(xii). Identifying training needs & skills gap for operation and innovative staff and
provide training to fill the gaps;
(xiii). Developing policy and strategy for staff rotation/sharing across the Authority
(xiv). Designing and implementing an executive dashboard for monitoring and
evaluating strategy execution.
In this regard, a total of 22 initiatives out of the entire 64 initiatives of CP4 were completed
by 30th June 2015 which represents 34% performance of the overall CP4 initiatives. Table
4 below provides a summary of planned and completed initiatives status by Themes.
Table 4: Planned and Completed CP4 initiatives for 2014/ 2015
S/NO Theme Planned initiatives for 2014/15 Completed Initiatives

Planned Rolled Spanned July 2013 – July 2014–
Initiatives Over from Initiatives June 2014 June 2015
2013/14
1 Convenience 6 7 4 0 4
2 Compliance 2 5 1 5 6
3 Continual 7 6 4 3 4
Improvement
Sub-Total 15 18 9 8 14
Total 42 22
Source: Planning and Modernization Department
3.1 Convenience
The focus of this theme is to deliver cost-efficient, consistent and reliable services to
taxpayers. It entails streamlining of processes, optimization of automation opportunities
for self-service in order to contribute to shorter service turnaround times and prompt
service delivery. There were seventeen (17) initiatives planned for implementation
during 2014/15 under this theme. Four (4) initiatives were completed and the remaining
thirteen (13) which includes the spanned initiatives were rolled over to financial year
2015/16. Status of implementation of initiatives under this theme is as follows:-
3.1.1 Implement Internal Audit Strategy

The objective of this initiative is to set out Internal Audit’s approach for delivery of
assurance and consulting services to the Management and TRA Board through its Audit
17
Committee which will lead to value adding Internal Audit assignments. The Strategy is
currently on its second year of implementation and 18 out of 19 activities extracted from
this strategy which is 95% have been fully implemented while one activity (Developing
Staff Rotation Policy) is awaiting approval. The implementation of the Internal Audit
Strategy is expected to be completed in 2015/16.
In line with this, the TRA has requested HMRC to provide assistance in capacity building
with the objective of ensuring Internal Audit Department maintains a professional audit
function with required skills and competencies that can deliver adequately across the
Authority. It is expected that training will focus on Performance Auditing, IT Auditing
(Network and Database security), Forensic Auditing tools & digital evidence collection
and data mining, Use of automated Audit tools for data analysis (ACL) and Risk Based
Auditing.

3.1.2 Identify Skills gap and training needs for Audit, Debt, Investigation, Legal
and Taxpayer Service Officers
The objective of the initiative is to enable the TRA to conduct skills gap analysis by
accomplishing: assessment of existing employees’ skills against work challenges;
establishing required skills for each of the targeted job function; developing Skills Map;
and designing training programs to address the identified gaps in skills.
This initiative has been merged with the other ‘Skills Gap’ initiatives to optimize on
resource utilization. During the period under review a draft report was presented to
Management on 30th June, 2015 for comments. The final draft report will be presented
to the management during the first quarter of the financial year 2015/2016.
3.1.3 Implement One-Stop Border Post (OSBP) operations
The objective of this initiative is to facilitate Cross Border Trade through improvement
of Customs operations at the border posts for EAC member States and other
neighbouring Countries such as Zambia, Mozambique and Malawi. It is expected that
when the project is fully implemented it will enable passengers and goods to stop
only once at the exit points. The major activity in implementation of this initiative is
construction of buildings and the associated infrastructure.
The operations of OSBPs for all EAC member States in Horohoro (Tanzania/Kenya);
Namanga (Tanzania/Kenya); Kabanga (Tanzania/Burundi); Rusumo (Tanzania/
Rwanda); and Mutukula (Tanzania/Uganda) are expected to start in August 2015 as
the construction of most of the OSBPs is to be completed by July 2015. However,
Kabanga OSBP is still operating using the existing infrastructure.
Construction of OSBP for other neighbouring Countries such as Zambia, Mozambique

and Malawi are at different stages as follows:
a) Tanzania/Zambia border (Tunduma/Nakonde) - The Consultant is finalizing pre-

contract design phase whereas finalization of Bills of Quantities and Tender document
will be completed by end of July 2015. Preparation for demolition of compensated
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structures is to be undertaken by the Office of the Momba District Commissioner,
Songwe region by end of July 2015. Also TRA through TMEA are processing
procurement of ICT and furniture equipment and prefabricated office structures or
extension of the current Customs and Excise building for roll out of the envisaged
OSBP pilot operations at Tunduma/Nakonde. The pilot facility is expected to commence
by end of November 2015.
b) Tanzania/Malawi border (Kasumulu/Songwe) – The construction of OSBP for

Kasumulu/Songwe will be undertaken by TANROADS. By end of the period under
review implementation status of the project is at pre-contract design phase. TRA has
provided the World Bank with TOR for training of Clearing and Forwarding agents.
3.1.4 Review tax returns and filing procedure to simplify self-assessment
This initiative requires the review and simplification of the tax return forms and filing
procedures to enable smooth implementation of self-assessment for all taxpayers.
A working group of nine officers was established in August, 2014 to undertake this
task. The team comprises staff from LTD, DRD-HQ, Ilala, Kinondoni and Temeke tax
regions. The working group with assistance from the US Treasury Consultant reviewed
the existing tax return forms and filing procedures that were presented and approved
by the Management by January, 2015. The reviewed forms and procedures will form
part of inputs required for the development of e-filling module in the ITAX that will be
developed internally by the ICTD staff and is expected to be completed by first quarter
2015/16.
3.1.5 Enhance electronic services (e-filling, e-payments, mobile payment)
Currently application of e-services is limited to VAT return filing, online TIN/VAT

registration and some mobile payments. The initiative requires enhancing electronic
services whereby filing of tax returns, registrations and payments are to be done
electronically and for all types of taxes. During the period under review, ICTD
analysed the user requirement for preparation of System Requirement Specifications
(SRS) and System Design Document (SDD) for development of the e-filing of direct
taxes. In line with this, the Authority via its technical and business operations teams
continued with enhancement of e-payments by emphasising on Taxbank interface
and mobile payments. Currently mobile payments are mainly made for motor vehicle
taxes payments which include road licenses, transfer of ownership, stamp duties and
duplicate motor vehicle registration cards. In future, it will be extended to other types of
taxes including driver’s licenses. Taxbank is an interface designed by our developers
to link TRA revenue systems with commercial bank’s core banking system (CBS) to
enable transactions to be exchanged between systems for automatic validation of
taxpayer’s accounts both for customs and domestic revenue in TANCIS and ITAX
systems. Taxbank payments are made through bank deposits in special accounts
automated to enable straight through processing (STP) of revenue transactions. There
are 5 commercial banks which operates live Taxbank operations while 22 banks are at
various stages of implementation. The electronic payment methods currently used in
revenue collections are mobile, Swift (TISS) and Taxbank.
19
Figure 8 below shows e-filing of VAT returns and registration trend for the period from
July 2014 to May 2015 and Figure 9 shows payment of taxes made through TISS,
Taxbank, Mobile and other deposits by percentage during the period from July 2014
to June 2015.
Figure 8: E-Filing of VAT Returns & VAT Registration July 2014 –May 2015
Source: ITAX System
Figure 9: Payment of Tax made through TISS (Swift), Taxbank, Mobile and Other bank deposits
June 2014 – July 2015
In TZS billion
Source: Finance Department.
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3.1.6 Full implementation of Tanzania Customs Information System (TANCIS)

This initiative entails introduction of a robust Customs Management System to enhance
controls, facilitate trade and reduce clearance time at Ports, Airport and Border stations.
TANCIS is designed in a manner that facilitates its integration with the internal systems
of new Cargo and Risk Management Systems, Revenue Gateway, Electronic Cargo
Tracking System, Central Motor Vehicle Registration System, Taxpayer Identification
Number system and the anticipated New Integrated Domestic Revenue System
(IDRAS). The system will also be integrated with external systems of National Single
Window for Trade and the planned Port Community System (Tanzania Port Authority,
Internal Container Depots, Tanzania Bureau of Standards, Tanzania Food and Drugs
Authority and Clearing agents). Through integration and interface of TANCIS with other
operational systems, customs controls are bound to be improved.
During the period under review, implementation of TANCIS Phase II commenced with
the development of module for Oil Monitoring, Licensing, Enforcement, and Passenger
Clearances followed by deployment of the same in the respective Customs units
and stations. TRA Management made a decision to rollout TANCIS alongside the
implementation of the Single Customs Territory (SCT) particularly in the stations sharing
border with the EAC partner states and later extended to the other stations neighbouring
DR Congo, Zambia and Malawi. Rollout to the remaining regions of Kigoma and Rukwa
was completed in April 2015 while rollout to Zanzibar will be carried out during financial
year 2015/16. In line with this, Modules on Export Processing Zone, Manufacturing
Under Bond, Duty free shops, In-flight catering and Online Auction were developed,
tested and launched successfully during the period under review. As at 30th June 2015,
TANCIS is operational in all major stations Tanzania Mainland.
Furthermore, the pilot clearance of goods under SCT clearance procedures between
Tanzania and DR Congo commenced on 6th July 2015 whereby goods to be involved
in the pilot would be wheat flour, vegetable cooking oil, motor vehicles, petroleum
products and maize flour. Under the SCT arrangements the two countries have adopted
destination model of clearance of goods where assessment and collection of revenue
is to be done at the first point of entry and goods will enter the DR Congo through
Kasumbalesa border (Zambia/Congo). TRA would go for full-fledged SCT in the stations
sharing border with the EAC partner states (Kenya, Uganda, Rwanda and Burundi) in
the 2015/16 after successful and efficient piloting of the system.
3.1.7 Establish Taxpayer Advocacy Services (TAS)

The initiative requires TRA to establish a framework that could facilitate and be
a “go-between” for the public and the government to enhance taxpayer confidence
through establishment of tax ombudsman office that act as an independent advocacy
mechanism. The TAS will assist taxpayers to resolve problems with TRA and recommend
changes to deter recurrence and create conducive environment for fostering voluntary
tax compliance. This initiative commenced with support from Her Majesty Revenue
& Customs (HMRC) of the United Kingdom who provided consultants to carry out
evaluation of the practicability and benefits of establishing Taxpayer Advocacy Services
(TAS) in Tanzania.
21
During the period under review, a TAS Project Road Map was developed which entails;
TAS pilot project; Taxpayer Advocacy Regional Panels (members and compensation
packages), Proposed TAS organization structure; Legal framework for the pilot project
and project expectations. TAS Road Map and action plan for pilot sites were presented
to the Standing Committee of the Board on 26th June 2015. After incorporating comments
from the Standing Committee, the revised Road Map will be presented to the Board of
Directors for approval during first quarter 2015/16.
3.1.8 Implement filing of personal income returns by all employees (Central

Government, Local Government Authorities, Private companies, and NGOs)
The initiative requires employees to file personal income returns electronically to

supplement the current practice whereby only employers file consolidated PAYE returns.
The objective is to ensure all incomes in addition to employment income are captured
and taxed accordingly.
The implementation of this initiative commenced by forming a working team of nine

officers from LTD, DRD-HQ, Ilala, and Kinondoni and Temeke tax regions to review
legal provisions for filing tax returns by employees. The team reviewed Return forms
and proposed legal changes to allow e-filing. Due to the fact that the initiative involves
external stakeholders, tax law review/amendment and sensitization to stakeholders, it
has been rolled over to FY 2015/16.
3.1.9 Develop and implement Business Continuity Management System

Business Continuity is the capability of the organisation to continue delivery of products
or services at acceptable predefined levels following a disruptive incidence. Business
Continuity Management System (BCMS) is part of the overall management system that
establishes implements, operates, monitors, reviews, maintains and improves Business
Continuity.
During the period under review M/S Deloitte & Touche has been contracted by TRA
to provide consulting services for developing and implementing Business Continuity
Management in TRA following the contract signing on 6th May 2015. The BCM kick-
off meeting held on 5th June 2015 was aimed at providing a common understanding
between TRA and the Consultant on objectives and deliverables of the project. The
meeting comprised the TRA management, Regional Managers from few selected
tax regions of Ilala, Arusha, Mwanza, Mbeya, DSM Customs Service Centre, TRA
Zanzibar and the Consultant. Following the kick-off meeting, the Consultant presented
a draft inception report (work plan) to TRA Management on 16th July 2015. The project
will be implemented in a phased approach whereby phase 1 will be for Analysis
(Threat Assessment and Business Impact Analysis), phase 2&3 will be for Design and
Implementation (Identification of Business Recovery Response Options & Development
of Business Continuity Plan (BCP)) while phase 4&5 will be for BCP validation and
creating awareness (Management Review, BCP, Testing & Training workshop). BCM
project implementation is expected to commence in July 2015 and complete by June
2017.
22
3.1.10 Design and Develop Swahili website

This initiative is aimed at providing new communication channel for interacting
with taxpayers in Swahili language in order to improve Customer Perception and
understanding of the web content thereby increasing voluntary compliance. During the
period under review the Consultant M/S TATAKI has been engaged since June 2015 to
carry out this task. The website launching is expected in January 2016.
3.1.11 Design a Social Media Strategy to Interact with Stakeholders

This initiative is aimed at increasing channels for interacting with taxpayers through
social media that includes; Facebook, Twitter, LinkedIn, You Tube and Instagram in
order to improve customer perception and increase in compliance.
During the period under review the social media strategy was designed and approved
by the Management on 30th June, 2015. To start with the TSED has been directed to
activate Twitter, LinkedIn and YouTube for external stakeholders and a blog for internal
use during first quarter 2015/16.
3.1.12 Design a new operating model to drive convenience and efficiency (Head
Office and Regional Arrangements)
The initiative requires review of the current operating model based on best practices
and challenges. The new operating model will include: Well-defined head office and field
operations and lines of reporting; Re-organization of all internal capabilities including
people and key processes to support the new operating model; and conducting Change
management awareness to implement the new operating model.
During the year under review TRA prepared a summary of IMF recommendations
to integrate domestic tax operations that justifies the need for integration and was
submitted to the Board for consideration. A detailed document together with an action
plan on the way forward for implementation of the initiative as directed by the Board will
be re-presented to the Board for approval during financial year 2015/16.
3.1.13 Other Significant Achievements under the Convenience Theme
The TRA Call Centre is among the modes used by TRA to receive customer feedback
that complements other means such as contact cards, suggestion boxes, perception
cards and email. The Call Centre provides credible and prompt information to customers
on inquires and complaints in order to facilitate customers to fulfil their tax obligations
swiftly. The enquiries and complaints are gathered in the database for tracking and
monitoring service delivery gaps for prompt decision making.
During the period under review, the Call Centre received a total of 18,460 calls which is
an average of 1,538 calls per month. Major issues enquired during the period indicates
that issues related to Payment of Motor Vehicles annual License fees dominated the
calls (43%), change of motor cycle registration (13%), and Customs related issues
(12%). Frequency of calls enquiries on major issues attended during FY 2014/15 are
illustrated in Figure 10 below.
23
Figure 10: Frequency of Calls/Enquiries Attended on Major Issues for FY 2014/15
Source: Taxpayers Service department
3.2 Compliance
The Compliance theme entails the segmentation of taxpayers to facilitate better
allocation of administrative resources and risk-management. The Large, medium and
small taxpayers offer very different revenue opportunities and compliance challenges. A
comprehensive taxpayer compliance strategy, organization internal capacity particularly
on the use of ICT and international best practice will address specific compliance issues
for each segment. Under this theme, eight (8) initiatives were planned for 2014/15. Six
(6) initiatives were completed and remaining two (2) were rolled over to financial year
2015/16. Status of implementation of initiatives under this theme is as follows:
3.2.1 Streamline Audit and Investigation process to reduce objections

This initiative aims at reorganizing the Tax Audit process and Tax Investigation process
in order to improve efficiency through elimination of overlapping activities. This initiative
is being implemented in two phases (Phase I audit process and Phase II investigation
process) with assistance from NTA and US Treasury.
Testing of the first three audit stages of the audit process started during the NTA visit
that was conducted in October, 2014. The working group tested the audit stages
which are: Case selection confirmation, case preparation and planning and conducting
audit. During the period under review NTA team in collaboration with LTD and DRD
conducted testing of four cases (2 cases from LTD and 2 cases from DRD). The testing
of the process was successfully completed by NTA as planned and the test results were
reported to the CDR and CLT.
The Streamlined Audit and Investigation Process to reduce objections is in place and will
24
be operationalized in the 1st quarter 2015/16. The outcome of this exercise will relieve
TID from conducting audit and deal with cases of criminal nature only which require
prosecution. Additionally the US Treasury Consultant conducted a mission on building
capacity to TID staff by ensuring that Investigators are equipped with the knowledge
and skills to successfully detect tax fraud and are able to determine potential criminal
prosecution as well as develop cases appropriately.
3.2.2 Implement and monitor an integrated risk based compliance strategy for
Domestic Taxes
The objective of the initiative is to develop a compliance strategy for Domestic Revenue.
The initiative requires development of a mechanism to measure, monitor and report on
performance and compliance level of the strategy. Monitoring will be based on sectors
and key processes (Registration, Filing of Returns, Audit, Collection & Accounting,
Objection & Appeals, Refunds), for each taxpayer segment (large, medium, small).
Implementation of the initiative commenced with support from US Treasury to develop a
compliance plan for identified sectors. During the period under review TRA Compliance
Risk Management Policy and Framework was developed with support of IMF Consultant
and final draft of Policy and Framework was presented and approved by the TRA
Management on 2nd April 2015. The main objective of this Policy and Framework is to
have efficient and effective process for development of a cross-functional compliance
strategy and annual action plans through: improved coordination between departments;
better use of compliance data and knowledge; focusing resources on key compliance
challenges; and emphasizing actions that change taxpayer behaviour. Following this
achievement, Compliance Risk Management Strategy working Group (CWG) and
Compliance Council which comprises selected Top Management were formed. In line
with this Compliance risk management action plan for 2015/16 has been developed
and is awaiting Compliance Council approval in July 2015.
3.2.3 Roll-out computer forensic laboratories to additional regions

This initiative aims at rolling out forensic laboratories to additional regions of Mbeya
and Arusha to provide them with the ability to use the labs to analyse taxpayer data for
the purpose of identifying tax leakages/evasion. TRA was advised by consultants from
the US Treasury to use the equipment planned for the proposed roll out in Arusha and
Mbeya regions to strengthen the existing Laboratory in Dar es Salaam so as to increase
the capacity of the Laboratory to handle cases centrally from all regions. The tender to
supply computer hardware and software for Forensic Laboratory was awarded to M/S
SANDATA Solutions (T) LTD on 19th June 2015. The supply of the equipment for the
laboratory is expected during the first half of Financial Year 2015/2016.
3.2.4 Develop mechanism to improve consistency of responses to taxpayers and

first time right across all channels
This initiative entails the following; to assess FAQ and to develop standard answers
for all communication channels; Deploy staffs with tax knowledge, communication and
interpersonal skills to handle taxpayer enquiries and to maintain enquiries database.
It is expected that staff productivity and customer perception will be improved upon
completion of this initiative. During the year under review the TSED prepared the first
25
draft of the Communication strategy which will be presented to Management meeting
during the 1st quarter of 2015/16 for deliberation.
3.2.5 Review Performance Management System Criteria for assigning weightage

The implementation of this initiative commenced in April, 2015 by developing a guideline
for assigning weightage and conducting performance appraisal. The guidelines reviewed
performance management System and proposed weightages to be assigned on each
perspective in the Balanced Score Card Performance Management Form cadre-wise.
The guidelines for Assigning Weightages and Conducting Performance Appraisal
were presented to the Management on 30th June, 2015 and were approved subject to
holding consultations with Heads of Departments. It is expected that after consultations
and approval of the document by the Board, the Authority will have a robust guide for
managing performance and conducting performance appraisal.
3.2.6 Integrate Collection and Accounting Processes to Increase Accuracy in on-

time Reporting
Collection and accounting processes are carried out by Finance and Revenue
Departments without a robust integrated system to streamline the processes, as a
result there had been delays in issuance of revenue collection performance reports.
This initiative therefore entails the integration of the two processes in order to increase
accuracy and on-time reporting of revenue collection performance.
The Phase I of the project (Revenue Gateway System) was implemented in collaboration
between TRA and Bank of Tanzania. The Montran Corporation consultant was engaged
in development of an interface system which improved the process of revenue collections
and achieved Straight Through Process (STP) between TISS-CBS and PACS at
BOT, ITAX and TANCIS at TRA, Commercial Banks and other stakeholders such as
Mobile phone operators to enable automation of taxpayer’s payment validation in TRA
systems.
In increasing automation efficiency, Phase II of Revenue Gateway System was initiated

by utilizing internal capacity. The following modules have been developed; fuel levy
transaction processing that includes oil payments and deposits by taxpayer and
reports
a) Implementation of Computerized Drivers’ License System (CDLS)

During the period from 1st July 2014 – 30th June 2015, a total of 402,717 drivers’
licenses were issued which generated drivers’ license fees amounting to TZS 19.04
billion. Cumulatively a total of 1,497,201 drivers’ licenses have been issued since the
introduction of the system in September 2010 which generated drivers’ license fees
amounting to TZS 69.26 billion.
b) Implementation of Electronic Fiscal Devices (EFD) Phase II

The main objective of introducing EFD is to increase controls, curb possible loopholes
strategies for smooth and sustained tax collection.
26
The implementation of EFD System to 127,380 Non-VAT traders identified for Phase
II continued during the period under review and whereby a total of 11,466 Non-VAT
traders have acquired EFD machines as at 30th June, 2015. TRA has a total of 25,908
VAT registered taxpayers out of which 20,721 taxpayers have acquired EFDs machine
as at 30th June, 2015 making a performance of 79.98%. A total of 32,187 taxpayers
(VAT and Non-VAT registered traders) have acquired EFDs machines as at 30th June,
2015. Table 5 and Figure 11 below shows VAT registered traders (cumulatively) and
VAT registered Traders with EFD machines (cumulatively) for the period from October
2013 - June 2015 on quarterly basis.
Additionally, the Government has established District, Regional and National

Enforcement Committees in order to enhance compliance in acquisition and usage
of EFDs. The committees also address challenges which were raised by taxpayers
following the introduction of EFDs. The District/Regional committees chaired by
District/Regional Commissioners comprise members from TRA and Taxpayers. The
National Committee is chaired by the Assistant Commissioner Fiscal Policy from the
Ministry of Finance and comprises members from TRA, Ministry of Finance, Ministry of
Industry and Trade, Ministry of Home Affairs, Prime Minister’s Office and Taxpayers.
Table 5: VAT registered (cumulative) & EFD Acquired (cumulative)

2013/14 – 2014/15 on Quarterly Basis
Oct-Dec Jan-Mar Apr-Jun Jul-Sept Oct-Dec Jan-Mar April-June
2013/14 2013/14 2013/14 2014/15 2014/15 2014/15 2014/15
VAT Registered
23,163 23,833 24,346 24,758 24,982 25,423 25,908
(Cumulative)
EFD Acquired
17,396 17,916 18,546 19,201 19,745 20,201 20,721
(Cumulative)
Source: Domestic Revenue Department
Figure 11: Cumulative VAT registered Traders with EFD machines against total VAT registered Traders on
quarterly basis
Source: Domestic Revenue Department
3.3 Continual improvement

Continual improvement initiatives focus on cultural change and enhancement of
operations to minimize administrative costs. A culture of innovation is developed
within the organization to incubate new ideas for improvement of operations, building
27
coalitions with external stakeholders, developing an internal performance culture that

is receptive to change and supported by capable leadership that adheres effectively to
good governance requirements and is clear on its mandate and accountabilities. Under
this theme, seventeen (17) initiatives were planned for 2014/15. Four (4) initiatives were
completed and the remaining thirteen (13) were rolled over to FY 2015/16. Status of
implementation of initiatives under this theme is as follows:-
3.3.1 Align Training Needs Analysis to the Performance Management System.

The initiative requires training plans to be developed taking into account the training
needs extracted from the performance management system as agreed by appraisee
and appraiser. Hence the training programme will include the extracted training needs
from performance management system and the organizational demand for capacity
building.
The department has refined business process which is embedded in ARUTI Human
Resources Information System (HRIS) under Performance Management module to
allow easy extraction of data generated during performance appraisal exercise. During
the period under review departmental training coordinators have been trained on the
application of the module and on how it is designed to capture individual Training Needs
which will be extracted by them before preparing Annual Departmental Training Plan
starting with 2014/2015 performance appraisal which will be implemented during first
quarter of 2015/16.
3.3.2 Develop and Implement Succession Planning Program

The objective of this initiative is to identify and develop a talent pool from internal staff
with the potential to fill key managerial positions in the organization. The initiative entails:
identification of staff with the potential to assume key responsibility in the organization;
provision of critical development programmes to those who can move into key roles;
building a successor pool database that can be used to make better staffing decisions
for key jobs.
This initiative has been aligned to the Corporate Human Resources Policy and Strategy
document that covers most of the aspects of developing and implementing succession
planning program. The policy and strategy document was approved by the Board in
May 2015. The development of Succession Planning and the implementation will be
done in collaboration with a consultant during the financial year 2015/16.
3.3.3 Improve ICT Governance and Management Structures and Processes

TRA needs to have clear lines of responsibilities and accountabilities on its ICT
management that would ensure among others that, all ICT related security, integrity
and risks are properly managed. The initiative entails engaging a consultant to assist
in undertaking of the following activities: establishing an effective ICT governance
framework to ensure alignment between ICT projects and business objectives,
establishing ICT structure and service delivery processes that harmonizes and centrally
co-ordinates the management of ICT to achieve economies of scale, and recognizing
the unique requirements of each business unit. The process to engage a Consultant
to carry out this initiative was initiated during the year under review whereby financial
proposals were received and opened on 1st July 2015. Combined evaluation of technical
28
and financial will be done in the first quarter 2015/16. It is expected that the TRA Tender
Board will approve and award contract to the successful bidder during 1st quarter
2015/16.
3.3.4 Implement Administrative Reforms of the TRA Informal Sector Study

This initiative is aimed at bringing the informal sector into tax net. This initiative entails
implementation of the administrative recommendations from the informal sector study
that was conducted by the TRA previously.
During the period under review the working group comprising members from DRD
Head Office, Dar es Salaam Tax Regions and Municipal Councils identified workable
areas. To start with unregistered garages in Kinondoni were identified as pilot project.
The owners of unregistered garage were allocated with permanent working places by
the Kinondoni Municipal council. The Kinondoni tax region has identified a total of 38
unregistered garages and a total of TZS 3,613,744 was established and collected as tax
by 30th June 2015. The exercise will span into other large regions during FY 2015/16.
Other identified workable areas include proposal for review of the current presumptive
tax rates which have been effected through Finance Act, 2015 by reducing minimum
presumptive tax rate from TZS 200,000 to TZS 150,000. Proposal to introduce GIS
System to facilitate monitoring of Taxpayers movement, utilization of Regional EFDs
Committees as well as District Tax Advisory Committees to address issues pertaining
to informal sector.
3.3.5 Improve ICT Service Delivery

Effective and efficient service delivery through the use of ICT is vital to TRA in order to
reduce cost of collection. The initiative aims at providing additional solutions and services
that will increase savings across the authority. The initiative will be achieved through;
Full implementation of Information Technology Infrastructure Library (ITIL) framework
for service management and defined ICT to Business service level agreements (SLAs).
The process of engaging a Consultant to carry out this initiative was initiated during the
period under review whereby financial proposals were received and opened on 1st July
2015. Combined evaluation of technical and financial will be done in the first quarter
2015/16. It is expected that the TRA Tender Board will approve and award contract to
the successful bidder during 1st quarter 2015/16.
3.3.6 Review and Strengthen the Information Security Management Programs

(Enterprise Security Architecture)
The objective of this initiative is to describe the activities that relate to the protection
of information and information infrastructure assets against the risks of loss, misuse,
disclosure or damage; and controls that an organization needs to implement.
The initiative entails; operationalizing ICT security policies; implementing security
governance and management framework based on ISO 27001 standard and conduct
training and capacity building.
TRA has requested HMRC to assist in provision of Technical Assistance in the

reviewing and strengthening the information security management programs (Security
29
Enterprise Architecture). TRA is expected to utilize the experience gained from HMRC in
accomplishment of acceptable security levels in Revenue Authorities worldwide. During
the period under review, the HMRC visited TRA and conducted a review of the AS-IS
Information Security Controls that are in place and recommendations were issued in
June 2015. As per recommendations TRA aims at introducing security elements in the
on-going Enterprise Application Architecture Initiative. Hence it was mutually agreed
that HMRC is to work on the inputs and come up with templates/documents that will
assist TRA to instil security elements in the Enterprise Architecture.
3.3.7 Enhance Practical Nature of ITA Training Programmes

This initiative is intended to enhance constant interaction between ITA trainers and
relevant practice, entrench the Competency Based Education Training (CBET)
approach as the primary delivery methodology and introduce internship requirements
for trainees.
During the period under review ITA adopted initiatives geared towards enhancing
practical nature of programs offered at the Institute. These include the introduction of
Instructors’ cadre in the Authority’s Career Pathway to create an incentive for competent
and experienced staff working in various departments to be transferred to ITA horizontally
as full time trainers. ITA management presented council paper to the Governing Council
during its 106th meeting held on 27th March, 2015. The Governing Council approved the
carrier pathway for Instructors carder that was later presented and approved by the
TRA Management on 30th June 2015. Additionally, ITA training programmes have been
reviewed and Pre-service Graduate Training Programme (PGTP) was introduced in
April 2015. A total of 150 new staff are currently undergoing the PGTP.
3.3.8 Maintaining TRA Quality Management System (QMS) – ISO 9001:2008

TRA is certified for Quality Management System (QMS) based on the ISO 9001:2008
International Standard. As a requirement of this Standard, TRA conducts Internal QMS
Surveillance Audit twice a year.
During the period under review TRA successfully attained the ISO 9001:2008 re-
certification following an external surveillance audit conducted in November 2014
by Bureau Veritas which was after independent confirmation that TRA meets the
requirements of ISO 9001:2008.The ISO certificate number IND15.6179U/Q which
is valid from 11th March, 2015 to 10th March, 2018 was issued to the Commissioner
General on 17th March, 2015. As per the requirements of the standard and in line with
the Annual QMS Internal Audit Program, TRA conducted the 15th Internal Quality Audit
from May – July, 2015 to all tax regions, Zanzibar, Pemba, HO&HQ offices.
3.3.9 Design and Implement an Integrated Enterprise Application Architecture

TRA is implementing a number of standalone systems such as TANCIS, ITAX, and
ARUTI etc.; which pose a challenge on information sharing. TRA is intending to introduce
Integrated Enterprise Application Architecture (EA) that will support information sharing
across the organization.
During the period under review, brief awareness training on Enterprise Architecture was
presented to the members of TRA ICT Steering committee and other invitees in January
30
2015 by the Danish Consultant as part of the project implementation. Working sessions
on information gathering, analysis and verification was done by the various working
groups of the EA project in Morogoro in March, 2015 as preparation for the next steps.
The Danish Consultant conducted workshop on Enterprise Architecture related

challenges, Business Strategy Synthesis, IT principles, Rationale and Implications to
the working groups of the project from 4th – 8th May, 2015. The workshop was followed
by working sessions on documenting operational TRA Business model and AS-IS
application, information and Technology Architectures from 22nd June – 3rd July 2015.
Working sessions on the TO-BE application, information and Technology Application
Architectures and identification of transition projects will be conducted in the first Quarter
of 2015/16.
3.3.10 Assess the Possibility of Rebranding TRA

TRA has been viewed as an Authoritative agency by stakeholders. The aim of this
initiative is to carry out an assessment for changing the perception of TRA to a service
oriented organization and make necessary changes to reflect the desired image and
culture.
During the period under review the Consultant from HMRC of the United Kingdom
through DFID visited TRA to review the current brand and concluded that there is
considerable scope for TRA to rebrand to reflect a more modern and outward-facing
image. The rebranding will require a range of activities with a view to creating a long-
term brand identity that clearly and consistently communicates the values and core
functions of TRA across all touch points. This includes:
a) production of guidelines to set out the basic principles behind the identity – colours,
typeface, imagery and language and tone
b) application of the identity across stationery, publicity and marketing, digital channels,
environmental graphics
In addition the initiative will need to consider how it engages with both its staff and its
customers. The review report will be presented to Management for decision and way
forward during first quarter 2015/16.
3.3.11 Improve Perception Survey to include Taxpayer Loyalty

Taxpayer Loyalty is measured by ratio of Expectations to Experience by taxpayers. The
initiative therefore intends to improve the instruments used in conducting perception
surveys so as to measure the level of Taxpayers’ loyalty. The survey will be carried by a
consultant whose procurement process is expected to be completed by August 2015.
3.3.12 Roll out of Gemba Kaizen Management System – Phase III

The aim of introducing GKMS in TRA is to provide a climate in which creativity and value
addition flourish. Continuous Improvement (Kaizen) is one of the core strategies for
excellence in service delivery and is considered vital in today competitive environment.
Kaizen lead to identify the problems in the working environment, proposing solutions
and making positive changes.
During the period under review GKMS roll out phase III was implemented in the
remaining regions of Rukwa, Mara, Lindi, Manyara, Kigoma, Singida and TRA Pemba.
31
The implementation commenced in 15th December 2014 and came to an end on 26th
June 2015. To build continuous improvement and embracing Gemba Kaizen culture in
TRA, the roll out exercise involved establishment of GKMS committee/team in each
region/department to oversee Gemba Kaizen implementation within the departments/
Regions. A consolidated report on the GKMS implementation program for the entire
organization will be submitted to the management by 31st July, 2015.
4.0 DEVELOPMENT PARTNERS ASSISTANCE
4.1 TMP Basket Fund

TRA continued to receive financial and technical assistance from Development Partners
(DPs) in the support of the implementation of CP4. The DPs include DFID & HMRC,
DANIDA, US Treasury, NORAD & NTA, ICF, IMF East Afritac, World Bank Group and
JICA. The technical assistance support was mainly on specialized sectors audits, as well
as on strengthening overall tax administration and organizational development.
During financial year 2014/15, the Authority planned to utilize TMP Basket Fund supported
by Development Partners to procure various Goods and Consulting Services for a total
of twenty one (21) packages worth TZS 22,931,302,500.00;
(USD 13, 489,001.47) out of which five (5) packages worth TZS 17,252,230,700.00
(USD 10, 148,371.00) are for Goods while the remaining sixteen (16) packages worth
TZS 5,679,071,800.00 (USD 3,340,630.47) are for Consulting services.
Up to 30th June 2015 the DPs had disbursed funds to support budget implementation
through the basket fund as delineated in Table 7 below.
Table 7: TMP Disbursements as at 30th June 2015

Item Amount in USD* Amount in TZS
Basket Fund opening balance 2,375,992.20 4,080,053,805.84
DFID 8,221,004.72 14,117,109,305.18
DANIDA 1,940,343.25 3,331,957,428.90
Norwegian Fund 2,779,047.55 4,772,180,452.86
ICF 327,582.00 562,523,810.40
Total 15,643,969.72 26,863,824,803.18
Source: Bank of Tanzania (*Exchange rate: 1 USD = 1,717.20 as at 31st December, 2014)
During the period under review, USD 7,655,970.16 has been transferred from Basket
fund holding account to TRA Commissioner General Account. The detailed report of the
implementation of the same was produced on 15th August 2015.
4.2 Technical Assistance

TRA continued to receive technical support from various Development Partners including
Norwegian Tax Administration, US Treasury, DFID/HMRC, DANIDA, IMF East Afritac)
32
and Investment Climate for Africa (ICF). During the period under review the following
Technical Assistance were received.
4.2.1 Norwegian Government

The Norwegian Government through the Norwegian Embassy in Tanzania has been
providing technical support to the TRA. The support programme covers the years 2012-
2015 and the objective of the support programme is to attain a reduction in the tax gap
through improving tax compliance. The support programme was officially completed on
30th June, 2015 and negotiations for extension are on-going.
a) Norwegian Embassy
During the period under review the Embassy provided training support in the following
areas: Training on ADAPT II and Vertical integration chain and modelling techniques
and practical work; Training on Mining and Petroleum; and Benchmarking visit to
Indonesia to acquire practical experience on revenue administration on mining, oil &
gas.
b) Norwegian Tax Administration (NTA) support to TRA

NTA signed 3 years (2013 – 2015) agreement with TRA to provide technical assistance
in following areas: An integrated risk based compliance strategy for large taxpayers;
Transfer pricing; Clearing Backlog of nine companies (for the years 2007 - 2010) and
Improved Audit process.
During the period under review Norwegian Tax Administration has assisted TRA
in clearance of audit backlog – (Re-assessments for the 7 backlog cases have
established taxes of over USD 50 million and reduced the declared tax losses by
over USD 500 million) and has continued streamlining audit process & Objection
process; Implementing a risk-based compliance strategy for large taxpayers.
Norwegian Embassy has facilitated Training Workshop, provided Short courses on

Mining and Petroleum sub-sectors also facilitated benchmarking visits to TRA staff.
It has supported the development and implementation of risk library database for
field audit case selection process. Further supported in development of Transfer
pricing guidelines which are now operational that has improved audit process as
well as improved audit documentation procedure and audit tool kit (APTRA). Also
the Norwegian Government has provided Financial and technical support to develop
a model for monitoring and evaluation of Oil, Gas and mining. TRA is negotiating
with the Norwegian Embassy & NTA on possibility of extending the agreement and
entering the Basket Funding arrangement.
4.2.2 US Treasury
The United States Department of Treasury, the Revenue Policy and Administration
Advisory Program of the Office of Technical Assistance (OTA) provides technical
assistance and cooperation to Ministry of Finance and TRA to assist in the efforts
to increase revenue generation, broaden the tax base, and increase compliance
in the payment of taxes. The objective of this assistance is promotion of fairness
and transparency in taxation and tax systems. OTA provided assistance to TRA in
33
strengthening effectiveness of tax audits in the specialized sectors (financial services,
tourism, construction, and telecommunications); and expertise in the audit of transfer
pricing transactions of multinational enterprises. Support is also being given on devising
a Compliance Strategy for domestic tax operations and strengthening capacity in Tax
Investigation operations.
During the period under review, four deployments were carried out. A mission was
conducted to build capacity in Tax Investigation operations in January 2015. During
this mission, TRA was assisted Tax investigation department in closing non-criminal
potential inventory, developing the fraud referral program and training to TID staff on
managing criminal tax organization.
The second deployment was conducted in January-February, 2015 to provide technical

support on the development of the final draft of specialized audit guide for the Tourism
Industry sector; and other audit guides for construction, telecommunication and financial
institutions.
A third mission was conducted in March, 2015 to assist TRA to build capacity in the
International Tax Unit. The activities performed during the mission includes: on-job
assistance in reviewing cases that have been actively worked (five transfer pricing
cases and one with a bank structured loan); utilization of financial database tool for
case analysis; developing well prepared transfer pricing reports.
The mission to finalize the 2015 Work Plan and discussing TRA’s interest in OTA support
beyond this year was conducted between March and April, 2015. It has been agreed
that there are six areas where additional technical assistance can be productive and
where OTA has appropriate capabilities to provide them. These include;
a) Enhancing the effectiveness of audits of businesses in key industries
(financial services, including financial instruments, tourism, construction, and
telecommunications);
b) Building expertise in the audit of transfer pricing issues on multinational
enterprises;
c) Improving tax forms and related documents used by taxpayers to provide data to
TRA;
d) Developing sector wise Compliance Action Plans and measuring outcomes from
these strategies;
e) Building capacity in Tax Investigations Department;
f) Developing strategies within the Annual Compliance Action Plan and measuring
outcomes from these strategies; and
g) Reviewing plans and addressing issues that arise in the deployment of the new
electronic tax system.
TRA has signed a work plan with US Treasury to continue with assistance/support in
2015/16. Additionally, TRA and U.S. Department of Homeland Security U.S. Customs
and Border Protection signed Memorandum of Understanding to facilitate the
exchange of customs expertise on 10th March 2015.
34
4.2.3 IMF (FAD & East Afritac)
The IMF continued its support to TRA through Technical Assistance Program following
the previous FAD missions that had recommended to TRA the need of developing
a comprehensive compliance strategy anchored on effective taxpayer service and
education, enforcement and collection, and audit and investigation functions.
The TRA recognizes the need to strengthen its audit practice and received technical
assistance from IMF on Strengthening Audit practice with a focus on Computer assisted
audit. The mission was conducted from March, 2015 to review the current audit
procedures and practices and to make recommendations for improvement. The second
mission was conducted in April, 2015 on Developing a Compliance Risk Strategy and
Plan in Tax administration.
TRA Compliance Strategy Policy & Framework team was established by drawing
members from department of Large Taxpayer, Domestic Revenue, Tax investigation,
Taxpayer Services and Education, Research and Policy and Planning and Modernisation.
With the assistance from IMF technical advisor the team developed TRA Compliance
Risk Management Policy and Framework which was presented and approved by the
Management on 2nd April, 2015. The policy guides the authority in the management of
risks that directly impact the domestic taxes and among others, provide step by step
instructions to follow during the identification of risks and Compliance Risk Management
Government structure. In line with this, Compliance Risk management Plan for FY
2015/16 has been initiated and upon completion will be used as a basis for development
of compliance strategies for domestic taxes starting FY 2015/16. Additionally, IMF
East AFRITAC provided support for development of compliance strategy for extractive
industry in May 2015.
4.2.4 DANIDA
TRA continued to utilize the support provided by the Government of Denmark during
the period under review whereby the Danish Ministry of Foreign Affairs and Tanzania
signed an agreement to provide DKK 70m in May, 2015 to support TMP.
The Danish Ministry of Taxation (SKAT) is providing Technical assistance to TRA

in the establishment of the Enterprise Architecture as part of Enterprise Application
Architecture initiative. During period under review Enterprise Architecture pre-kick off
sessions to the departments and stakeholders was conducted on 21st - 23rd January
2015. Four working groups were established and given assignments to work on. The
established working groups are: Information and Application; Business; Technology;
and Project Management. Then followed by a video conference that was held on 19th
March, 2015 at Danish Embassy in Dar es Salaam whereby EA working groups were
briefly assigned tasks.
The Danish Consultant conducted workshop on Enterprise Architecture to the

working groups of the project from 4th – 8th May, 2015. The workshop was followed
by working sessions on documenting operational TRA Business model and AS-IS
application, information and Technology Architectures from 22nd June – 3rd July 2015.
35
Architectures and identification of transition projects will be conducted in the first Quarter
of 2015/16.
4.2.5 Department for International Development (DFID)/HMRC

a) DFID
The Government of United Kingdom through Department for International Development
(DfID) provides financial and technical assistance support in implementing CP4.
The financial support is provided through the basket fund arrangement is worth
£17 million spread in tranches for the 5 year period and £3 million for technical
support through Her Majesty’s Revenue and Customs (HMRC). HMRC’s technical
support is provided in the form of short-term deployments into TRA by HMRC
experts.
During the period under review, presentation on TANCIS QA to the TRA Senior
Management was made on 3rd March, 2015. The presentation highlighted the
findings of the QA conducted by Crown Agents and gave recommendations and
their implications to TRA. The key focus of the presentation was to give insight into
the QA aspects of TANCIS while building internal capacity around QA and the testing
process, methodologies and tools in order to enable TRA improve their ability to
manage and deliver the System.
The DFID is also assisting TRA through providing Technical Assistance (procurement
agent) for procurement of an Integrated Domestic Revenue Administration
System (IDRAS) following two failed attempts to identify a suitable supplier of the
system through the normal procurement process. This has significantly delayed
implementation of a number of CP4 initiatives which have a dependency on IDRAS
implementation. Procurement agent to assist the procurement process of IDRAS
was engaged in May 2015. The assignment to be carried out by the agent includes
working with TRA to understand the reasons for failure of the previous IDRAS
procurement and enhance future procurement capacity within the Authority. It is
expected that contract for supply and commissioning of IDRAS will be awarded by
end of March 2016.
b) HMRC
During the period under review, deployment from HMRC Technical Advisors
to support TRA on Physical and Digital Security was carried out in March, 2015.
During this deployment the following activities were conducted: Security vulnerability
assessment to the new TRA HQ building to identify the security level and provide
professional advice to ensure the new building is fitted with modern physical and
digital security; Evaluation and advising TRA on how to install a modern and digital
security in the remaining offices. The report on situational analysis and proposal for
enhancement of TRA physical and digital security was presented to the Management
on 24th February 2015. Additionally, HMRC commenced External Transparency and
Integrity review (Phase I) by meeting TRA top Management to discuss the existing
integrity management system of TRA. Also they met few external stakeholders from
Dar es Salaam tax regions. Phase I report was submitted by the Consultants in June
36
2015 and Phase II of the assignment commenced on 8th July 2015.
TRA is set to get support from HRMC in Automatic Exchange of Information (AEoI).
The objective of this initiative is to enable Tanzania to receive and share information
automatically (for example, information about bank accounts held by residents
overseas). This aspect of information exchange is in addition to any work on on-
demand exchanges such as through bilateral or multilateral treaties. Automated
exchanges have practical advantage of using relatively little resource input to gather
the data once the system is set up.
Furthermore, HMRC and DFID EOI team conducted video conference between key
TRA officials and officials from HMRC, DFID UK on 25th March, 2015. The purpose of
the meeting was to develop a wider shared understanding of Tanzania’s preparedness
for AEOI and to discuss support that HMRC might most usefully provide. The
meeting agreed that HMRC will play a role in assisting TRA to move towards regular
exchanges of information across borders. The support could usefully cover an IT
needs/gap analysis as well as practical support on the processes and structures
needed to build EOI desk. Additionally, HMRC provided consultancy in assessing
the possibility of rebranding TRA and the assessment report will be presented to the
Management during first quarter 2015/16.
4.2.6 Investment Climate Facility (ICF)

ICF is committed to improve investment climate in Tanzania by reducing the cost
of importing and exporting goods whilst improving customs transparency, control
and risk management. In this respect ICF has provided to TRA a counterpart
funding grant of US$2.7 million to support Modernization of Customs (Phase II) and
procurement process of TANCIS. During the period under review ICF supported
training and sensitization to TRA staff and stakeholders on TANCIS operation as
well as financing the Project Management Consultant and Procurement Consultant.
Also supported training on Project Management to TRA Management and staff.
4.2.7 Japan International Cooperation Agency (JICA)

As part of the government’s efforts to address the challenges faced in collecting
revenue from domestic taxes, a three year project, titled “Project for the
Enhancement of Taxation Training in Tanzania” was agreed with the government
of Japan through its agency for international cooperation (JICA). The goal of the
project is to enhance capacity of the staff working for tax administration through
improved training programs provided by ITA. The implementation of the project
commenced in 2012 and through this arrangement five courses were identified and
implemented as follows: (a) Taxation Basic Course (55 staff attended), Taxation
Advanced Course (21 staff attended), International Taxation (35 staff attended) and
Tax Audit in a Computerized Environment (35 staff attended).
37
5.0 CHALLENGES
The Government decision to change the base year for computation of GDP figures from
2001 to 2007 prices necessitates the review of CP4 and the vision for the Authority. The
vision has to be changed because it is a ratio of revenue to GDP and has been directly
affected by the rebased GDP figures as well as the revenue forecasts for the duration
of the CP4. The review was conducted from February to April 2015 which also entailed
thorough assessment of the initiatives implementation in terms of timing and relevance
in the current and future operating environment. The revised CP4 initiatives had to be
captured into iTRAMED for monitoring and evaluation.
Another challenge that TRA is facing in the course of implementation of Fourth Corporate
Plan is delayed procurement brought about not only by procurement regulations but also
due to re-tendering of some of initiatives. During the period under review re-tendered
initiatives included; Introduction of New Integrated Domestic Tax Administration system
(IDRAS); Design and Implementing an Integrated Enterprise Application Architecture and
Study on physical asset requirement, performance and utilization. Following the review,
it is expected that implementation of the CP4 initiatives will be completed as planned.
6.0 WAY FORWARD

During the year 2015/16, TRA is required to collect TZS 12,541.52 billion as well
as implement a total of forty five (45) initiatives out of which 30 are expected to be
completed by June 2016 while the remaining 15 are spanned and will be completed
in the subsequent years. The on-going reforms within the TRA CP4 will significantly
contribute in achieving the target and realising the revenue to GDP ratio estimated at
13.1% for 2015/16. Some of the main reforms include; the implementation of Enterprise
application architecture; Introduction of the Integrated Domestic Revenue Administration
System (IDRAS); Implementation and monitoring of an integrated risk based compliance
strategy for Domestic Taxes; Continue with training and capacity building of tax auditors
in specialised sectors (oil, gas, telecom & financial); implementation of a comprehensive
taxpayer service and education program for each segment.
7.0 CONCLUSION
We wish to thank all our stakeholders for their untiring support and we want to assure
them that we are committed to serve them even better in the coming financial year and
build a better Tanzania.
“Together We Build Our Nation”
Alphayo J. Kidata.
COMMISSIONER GENERAL
38
STATEMENT OF DIRECTORS’ RESPONSIBILITY
FOR THE YEAR ENDED 30TH JUNE 2015
The Authority is required by the Tanzania Revenue Authority Act, Chapter 399 of the Laws, to
prepare financial statements for each financial year that give a true and fair view of the Authority
at the end of the financial year. In complying with this requirement, TRA Board members wish
to state that these financial statements comply with International Public Sector Accounting
Standards (IPSAS) and Public Finance Act, 2001 (Revised 2004), and reflect amounts that
are based on the best estimates and informed judgment of the TRA Board members with an
appropriate consideration to materiality. The financial statements, in this regard, are presented
in a manner consistent with International Public Sector Accounting Standards (IPSAS) and
Public Finance Act, 2001 (Revised 2004).
The Board of TRA is responsible for establishing and maintaining a system of effective internal
control designed to provide reasonable assurance that transactions recorded in the accounts
are within the statutory authority and that they contain the receipt and use of all public financial
resources by the Authority. Although there are inherent limitations to the effectiveness of any
system of accounting controls, TRA Board members believe that the TRA’s system provides
reasonable, but not absolute, assurance that assets are safeguarded from unauthorized use or
disposition and that the accounting and the underlying records are sufficiently reliable to permit
the preparation of the financial statements that conform in all material respect with IPSAS and
Public Finance Act, 2001 (Revised 2004).
To the best of the Board members’ knowledge, the system of internal control has operated
adequately throughout the reporting period. Thus, TRA Board members accept the responsibility
for the integrity of the Financial Statements for the year ended 30th June 2015, the information
they contain, and their compliance with the required reporting framework.
Nothing has come to the attention of the Board members to indicate that the Government of the
United Republic of Tanzania shall wind up the operations of the Authority, thus not to remain a
going concern for at least twelve months from the date of this statement.
Mr Bernard S. Mchomvu 31st December, 2015

Chairman
of the TRA Board Date
39
AUTHORITY INFORMATION
30TH JUNE 2015
REGISTERED OFFICE AND
PRINCIPAL PLACE OF BUSINESS: Tanzania Revenue Authority (TRA),
Plot No. 126, Sokoine Drive,
P. O. Box 11491,
Dar es Salaam, Tanzania,
Telephone +255 22 2119591/4,
Fax +255 22 212 6908,
Email [email protected],
Website: www.tra.go.tz.
BANKERS: Amana Bank Ltd,

Golden Jubilee Building, Garden/Ohio Street,
P. O. Box. 9771,
Dar es Salaam, Tanzania.
Azania Bank Ltd,

Mawasiliano Towers, Sam Nujoma Road,
P. O. Box 9271,
BancABC,
Barclays House, Ohio Street,
P. O. Box 31,
Bank M (T) Ltd,

Barrack Obama Road,
P. o. Box 96,
Bank of Baroda,
Ohio/Sokoine Drive,
P.O Box 5356,
Bank of Tanzania,
10 Mirambo,
P.O Box 2939,
Barclays Bank Tanzania Limited,

Barclays House, Ohio Street,
P.O. Box 5137,
40
30TH JUNE 2015 (Continued)
BANKERS (Continued): Bank of Africa (T) Ltd,

Kivukoni /Ohio Street,
P. O. Box 3054,
Citibank Tanzania Limited,

Peugeot House, 36 Upanga,
P.O. Box 71625,
Commercial Bank of Africa Ltd,

Amani Place, Ohio Street,
P. O. Box 9640,
CRDB Bank PLC,

Azikiwe Street,
P.O. Box 268,
Diamond Trust Bank (T) Ltd,

Harbour View Towers, Samora Avenue,
P. O. Box 115,
Ecobank (T) Ltd,

Sokoine Drive,
P. O. Box 20500,
Exim Bank (T) Ltd,

Exim Tower, Ghana Avenue,
P. O. Box 1431,
FBME Bank Ltd,

Samora Avenue,
P. O. Box 20500,
First National Bank,

FNB House, Ohio Street,
P.O Box 72290,
41
BANKERS (Continued): Habib African Bank Ltd,

Zanaki/Indira Gandhi Street,
P. O. Box 70086,
I & M Bank,
Maktaba Street,
P.O Box 9771,
KCB Bank (T) Ltd,

Harambee Plaza,
Ali Hassan Mwinyi/Kaunda Drive,
P. O. Box 804,
Mkombozi Commercial Bank Plc,

St. Joseph Cathedral, Mansfield Street,
P. O. Box 38448,
National Microfinance Bank PLC,

NMB House, Jamhuri/Azikiwe Street,
P.O. Box 9213,
National Bank of Commerce,

Sokoine Drive,
P. O. Box 1863,
NIC Bank (T) Ltd,

Harbour View Towers, Samora Avenue,
P. O. Box 20268,
Peoples’ Bank of Zanzibar Ltd,

Darajani Street,
P. O. Box 1173,
Zanzibar, Tanzania.
Stanbic Bank (T) Ltd,

Ali Hassan Mwinyi/Kinondoni Road,
P. O. Box 72647,
Dar es Salaam,Tanzania.
42
BANKERS (Continued): Standard Chartered Bank Tanzania Limited,

International House,
P.O. Box 9011,
Tanzania Postal Bank,

Samora Avenue,
P.O. Box 9300,
Twiga Bancorp Limited,

Twiga House, Samora Avenue,
P.O. Box 10119,
United Bank for Africa (T) Ltd,

Nyerere Road,
P. O. Box 80514,
COMMISSIONER GENERAL: Alphayo J. Kidata,

P. O. Box 11491,
Dar es Salaam, Tanzania
AUDITORS: The Controller and Auditor General,

National Audit Office,
Samora Avenue/Ohio Street,
P. O. Box 9080,
Dar es Salaam, Tanzania,
Tel: 255 (022) 2115157/8,
Fax: 255 (022) 2117527,
E – Mail: [email protected],
Website: www.nao.go.tz.
43
DIRECTORS’ REPORT
1.0 INTRODUCTION
Pursuant to the Tanzania Financial Reporting Standard No.1 on Directors’ Report, the
TRA Board members present this report and the financial statements for the financial year
ended 30th June, 2015, which disclose the results of operations and the state of affairs of
the Authority.
2.0 TANZANIA REVENUE AUTHORITY PROFILE
The Tanzania Revenue Authority (TRA) was established by the TRA Act Chapter 399 of
the Laws which came into effect on 7th August 1995 and became operational from 1st July,
1996.
TRA is an agency of the Government of the United Republic of Tanzania responsible for
the administration of Central Government taxes.
The overall Management of TRA is vested in the TRA Board under the supervision of the
Minister for Finance. The Commissioner General is the Chief Executive Officer responsible
for the day to day operations of the Authority.
TRA Vision
To increase domestic revenue through enhancement of voluntary tax compliance
TRA Mission
We make it easy to pay tax and make lives better
TRA Core Values
TRA core values are handful of moral boundaries within which TRA operates. They define
TRA’s personality and ethical standards by which TRA would be measured. The values
are commitment to stakeholders and are incorporated into all actions taken by members
of the organization. In this respect, TRA upheld the following core values:
• Accountability: We create and sustain an organization that values and promotes

accountability
• Integrity: We believe in being fair and honest in all our dealings with taxpayers
and other stakeholders.
44
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30TH JUNE 2015 (Continued)
2.0 TANZANIA REVENUE AUTHORITY PROFILE (Continued)
• Professionalism: We are committed to applying the law consistently, responsibly
and with credibility using the skills and knowledge as a prerequisite in administering
our requirements.
TRA five years’ strategic themes
Under the TRA’s Fourth Corporate Plan (2013/14 - 2017/18), the Authority focuses on
the following strategic themes:
• Convenience
The focus of this theme is to deliver cost-efficient, consistent and reliable services
to taxpayers. This entails streamlining of processes, optimisation of automation
opportunities for self-service in order to contribute to shorter service turnaround
times and prompt service delivery
• Compliance
The theme focuses on formulation of a comprehensive taxpayer compliance
strategy that takes into account the compliance capacity of taxpayer segments,
the internal capacity of TRA particularly on the use of ICT and international best
practice.
• Continual Improvement
The theme focuses on building effective models for on-going organisational
change. The theme includes implementation of initiatives that focus on cultural
change and integration of operations to minimise administrative costs.
3.0 TRA FUNCTIONS

The TRA Act, Cap 399 (revised 2006) gives the Authority the mandate to perform the
following functions:
• Assess, collect and account for all Government Revenue;
• Administer effectively and efficiently all the revenue laws of the Central
Government;
• Advise the Government on all matters related to fiscal policy;
• Promote voluntary tax compliance;
• Improve the quality of services to the taxpayers;
• Counteract fraud and other forms of tax evasion;
• Produce trade statistics and publications; and
• Other functions determined by the Minister responsible for Finance.
4.0 COMPOSITION OF THE TRA BOARD

The Chairperson of the TRA Board is appointed by the President of the United Republic
of Tanzania, for a term of three years. The Board consists of ten members including the
Chairperson, out of which five members are ex-officio, while the Minister for Finance
appoints four other members to the Board on the basis of their professional knowledge,
experience and competence in relevant areas. The Director for Board Secretariat and
45
DIRECTORS’ REPORT
4.0 COMPOSITION OF THE TRA BOARD (Continued)
Legal Services sits on the Board as its Secretary.
The five members, who sit on the Board by virtue of their positions, as stipulated by
Section 10 of the TRA Act are:
• Permanent Secretary - Ministry of Finance (Union Government)
• Principal Secretary- Ministry of Finance (Zanzibar Government)
• Governor of the Bank of Tanzania
• Executive Secretary – Planning Commission.
• Commissioner General of TRA
Table 1 below shows a list of TRA Board members and the Secretary who served in the
Board during the year. The entire Board was composed of Tanzanian nationals.
Table 1: List of TRA Board members and Secretary

No Name Position Age Date of Qualification/ Remarks
Appointment Discipline
1 Mr. Bernard Mchomvu Chairman 69 August, 2011 Economist Re-appointed for
three years effective
from 1st June 2014
2 Mr. Shogholo C. Member 56 June, 2011 Economist Ex-Officio
Msangi
3. Mr. Khamis M. Omar Member 50 June, 2011 Finance Ex-Officio
4. Hon. Josephat S. Member 51 August, 2014 Accountant 1st Appointment

Kandege
(MP)
5. Dr. Suleiman R. Member 54 August, 2011 Finance His 2nd term ended
Mohamed on 31/08/2014
6. Prof. Benno J. Ndulu Member 65 June, 2011 Economist Ex-Officio
7. Dr. Nsubili M. Isaga Member 38 October, 2014 Finance 1st Appointment
8. Dr. Phillip I. Mpango Member 58 June, 2011 Economist Ex-Officio
9. Mr. Assaa A. Rashid Member 48 August, 2014 Lawyer 1st Appointment
10. Dr. John K. Mduma Member 45 August, 2014 Economist 1st Appointment
11 Mr. Rished M. Bade Member 48 May,2014 Finance Ex-Officio
12. Mr. L. B. S. Kandege Secretary 58 August, 2012 Lawyer Secretary
46
DIRECTORS’ REPORT
5.0 CORPORATE GOVERNANCE
The TRA Act provides for a Board which provides the overall guidance and direction of
the Authority. The Board is required by the Act that established TRA to meet at least once
every month to deliberate and provide guidance on policy and operations of the Authority.
During the financial year, the Board conducted twelve (12) ordinary meetings and seven
(7) extra ordinary meetings. The attendance of each Board member during the period
under review is as shown in Table 2.
During the year, the Board deliberated on the following matters:
(i) Staff matters.
(ii) Monthly reports on Revenue collection performance.
(iii) Revised Plan and Budget for 2014/15.
(iv) Revenue collection strategies for 2014/15.
(v) Tax investigation compliance strategies for 2014/15
(vi) Strengthening organization of Domestic taxes administration
(vii) Report on implementation of TRA’s Fourth Corporate Plan
(viii) Report on implementation status of TRA Enterprise Wide Risk Management
System
(ix) Matters arising from Standing committee and Audit committee meetings
(x) Report on tax investigation functions presented by US Treasury Consultant
(xi) Report on implementation of East African Community Single Customs Territory
(SCT)
(xii) Proposal to lease with an option to purchase one tower at PSPF complex on Plot
No. 120/121 Sokoine Drive to accommodate TRA Headquarters
(xiii) Revised TRA code of ethics
(xiv) Request for write – off approval and disposal of motor vehicle STK 5639/T673BST
for Sale to Mr. Harry Kitillya
(xv) Request for approval of the Financial statements and Revenue statements for
2013/14 for issue
(xvi) TRA baseline tax revenue projections for 2015/16
(xvii) Study to analyze performance of Excisable products in Tanzania 2010/11 –
2014/15
(xviii) Plan and Budget for 2015/16.
(xix) Proposals for a review of the Tax structure in 2015/16
47
48
DIRECTORS’ REPORT
Table 2: Attendance of the Board Members – 2014/15
MEETINGS
289th 290th 291st 292nd 293rd 294th 295th 296th 297th 298th 299th 300th 301st 302nd 303rd 304th 305th 306th 307th
No Name (Extraor (Extraor (Extraor (Extraor (Extraor (Extraor (Extraor
dinary dinary dinary dinary) dinary) dinary) dinary)
11/07/14 07/08/14 08/09/14 09/09/14 03/10/14 07/11/14 05/12/14 12/12/14 22/12/14 14/01/15 06/02/15 05/03/15 06/03/15 13/03/15 20/03/15 14/04/15 28/04/15 07/05/15 10/06/15
1 Mr. Bernard Mchomvu P P P P P P P P P P P P P A P P P P P
2 Mr. Shogholo C. Msangi ALT ALT P P ALT ALT ALT P P ALT P P P P A P P P A
3 Mr. Khamis M. Omar P P P P P P P A ALT ALT P P P A P P P P P

4 Dr. Suleiman R. Mohamed P P N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
5 Prof. Benno J. Ndulu P ALT ALT ALT ALT P P P ALT ALT A ALT P ALT ALT ALT ALT ALT ALT
6 Dr. Phillip I. Mpango ALT ALT ALT ALT ALT ALT ALT P P ALT A ALT A ALT P ALT ALT ALT ALT
7 Hon. Josephat S. Kandege N/A N/A N/A N/A N/A P P P P P P P P P P P P A P

8 Dr. Nsubili M. Isaga N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A P P P P P P P P
9 Mr. Assaa A. Rashid N/A N/A N/A N/A N/A P P P P P P P P P P P P P P
10 Dr. John K. Mduma N/A N/A N/A N/A N/A P P P P P P P P P P P P P P
11 Mr. Rished Bade P ALT P P P ALT P P ALT ALT ALT P P P P P P P P
12 Mr. Ludovic B. S. Kandege P P P P ALT P P ALT P P ALT ALT ALT ALT ALT ALT P ALT P
KEY
P = Present N/A = Not a member
ALT = Present through an alternate A = Absent with apology
DIRECTORS’ REPORT
5.0 CORPORATE GOVERNANCE (Continued)
COMMITTEES OF THE BOARD

The Board has two (2) committees namely the Audit Committee and the Standing
Committee.
Audit Committee
The Authority’s Audit Committee comprised of five (5) members and a secretary as shown
in Table 3 below. The roles and responsibilities of the Audit Committee are stated in the
TRA’s Audit Committee Charter and in the Financial Regulations. The Audit Committee
assists the Board in fulfilling its oversight responsibilities on risk management, financial
reporting process, the system of internal control, the audit process, and the Authority’s
process for monitoring compliance with laws and regulations.
Table 3: Members of the Audit Committee and Secretary
S/N Name Position

1 Hon. Josephat S. Kandege (MP) Chairperson
2 Dr. Philip I. Mpango Member
3 Mr. Assaa A. Rashid Member
4 Mr. Shogholo C. Msangi Member
5 Mr. Rished M. Bade Member
6 Mr. L. B. S. Kandege Secretary
During the Financial year 2014/15, the Audit Committee had four (4) ordinary meetings
and two (2) extraordinary meetings. The attendance of each member during the period
under review is as shown in Table 4. During the period under review, the Audit committee
deliberated on the following matters:-
(i). Election of Chairman to the committee
(ii). Progress report on the implementation of the Controller and Auditor General’s
(CAG) Management letter
(iii). Progress Report on the implementation of the Public Accounts Committee
(PAC) directives.
(iv). Request for approval of TRA Procurement plan for 2014/15
(v). Internal Audit manual
(vi). Audit Committee charter
(vii). Internal Audit Plan for 2015/16
(viii). Draft Financial Statements and Revenue Statements for the year ended 30th
June, 2014
49
DIRECTORS’ REPORT
Audit Committee (Continued)
(ix). Quarterly budget performance reports and interim financial statements for
2014/15
(x). Quarterly Internal Audit reports
Table 4: Attendance of the Audit Committee Members – 2014/15

MEETINGS
89th 90th 91st 92nd 93rd 94th
No. Name (Extraord (Extraor
inary) dinary)
31/07/14 30/09//14 30/10/14 29/01/15 13/04/15 14/05/15
1 **Prof. Benno J. Ndulu P ALT ALT N/A N/A N/A

Hon. Josephat S. Kandege N/A N/A N/A
2 P P
A
3 Mr. Assaa A. Rashid N/A N/A N/A P P P
4 Mr. Shogholo C. Msangi P P P ALT P ALT
5 Dr. Phillip I. Mpango
ALT A ALT ALT ALT ALT
6 Mr. Rished Bade P P P P P P
7 Mr. Ludovic B. S. Kandege ALT ALT P P ALT P
** Temporary member
KEY
P = Present
A = Absent with apology
ALT = Present through an alternate
N/A = Not a member
Standing Committee
The Authority’s Standing Committee comprised of six (6) members and a secretary as
shown in Table 5 below .The Standing Committee deals with organisational and human
capital issues including recruitment, ethics, integrity and staff disciplinary matters.
50
DIRECTORS’ REPORT
Standing Committee (Continued)
Table 5: Members of Standing Committee and Secretary
S/N Name Position
1* Dr. Suleiman R. Mohamed Chairperson
2** Dr. Nsubili M. Isaga Chairperson
3 Prof. Benno J. Ndulu Member
4 Mr. Khamis M. Omar Member
5 Mr. Shogholo C. Msangi Member
6 Dr John K. Mduma Member
7 Mr. Rished M. Bade Member
8 Mr. L.B.S Kandege Secretary
* His term ended on 31st August, 2014

** Appointed on 29th January, 2015
During the Financial year 2014/15 the Standing Committee had four (4) ordinary meetings
and five (5) extraordinary meetings. The attendance of each member during the period
under review is as shown in Table 6 below:
Table 6: Attendance of the Standing Committee Members – 2014/15
MEETINGS
112th 113th 114th 115th 116th 117th 118th 119th 120th
S/No. Name (Extraord (Extraord (Extraord (Extraord (Extraord
inary) inary) inary) inary) inary)
01/08/14 06/08/14 24/10/14 30/10/14 30/01/15 30/01/15 28/04/15 29/04/15 26/06/15
1 Dr. Suleiman R. Mohamed P P N/A N/A N/A N/A N/A N/A N/A
2 Prof. Benno J. Ndulu P ALT ALT P A A ALT ALT ALT
3 Mr. Khamis M. Omar P P P P P P ALT ALT P
4 Mr. Shogholo C. Msangi P ALT P P ALT P P P ALT
5 Dr. John K. Mduma N/A N/A N/A N/A N/A P P P P
6 Dr. Nsubili M. Isaga N/A N/A N/A N/A N/A N/A P P P
7 Mr. Rished Bade P ALT P P P ALT ALT ALT P
8 Mr. Ludovic B. S. Kandege ALT P P P P ALT P P P
KEY
P = Present A = Absent with apology
ALT = Present through an alternate N/A = Not a member
51
DIRECTORS’ REPORT
Standing Committee (Continued)
During the period under review, the Standing Committee deliberated on the following
matters:
i) Quarterly reports on ethics and staff integrity;
ii) Quartely reports of support departments;
iii) TRA code of ethics;
iv) Corporate Human Resources Policy and Strategy
v) Request for approval of TRA Procurement Regulations, 2015
vi) Proposal for restructuring of Human Resources and Administration department;
vii) Request for approval of TRA Asset Replacement and Maintenance Policy, 2015;
viii) Staff matters;
ix) Request for approval of commencement of Taxpayer Advocacy pilot project
x) Taxpayer Advocacy Service (TAS) Project Road Map 2014-2015
xi) End of contract performance review;
6.0 TRA MANAGEMENT
The day to day operations of the Authority are under the Commissioner General who
is assisted by the Deputy Commissioner General and thirteen Heads of Departments.
The head of Internal Audit Department in addition to reporting administratively to the
Commissioner General, she reports functionally to the Audit Committee. The Authority is
organized into Revenue and Support departments as follows:
Revenue Departments:
• Customs and Excise
• Domestic Revenue
• Large Taxpayers
• Tax Investigations
Support Departments:
• Board Secretariat and Legal Services
• Finance
• Human Resources and Administration
• Information and Communication Technology
• Internal Affairs
• Internal Audit
• Planning and Modernization
• Research and Policy
• Taxpayers’ Services and Education
52
DIRECTORS’ REPORT
7.0 EXTERNAL ENVIRONMENT
Following evaluation of external environment, TRA has identified the following macroeconomic
factors that affected tax revenue collections as well as other administrative reforms
implemented during the year.
7.1 General Overview of the economy

The Tanzania economy continued to perform well in terms of economic growth and
performance of other macroeconomic variables. Consistent with a steady economic growth
of 7.3 percent in 2014/15, Consumer Price Index inflation continued to decline from 6.4
percent in 2013/14 to 4.5 percent recorded in 2014/15.
The Government through the National Bureau of Statistics (NBS) released GDP figures
that have been revised and rebased from 2001 base year to 2007 base year, in line with
the results of major household based surveys (HBS). The current revision of GDP which
has used the UN International Standard Industrial Classification of all economic activities
(ISIC rev. 4) has incorporated in new products which include monetary instruments and
services that came with the advent of mobile phones; natural gas and arts; entertainment
and recreation. Due to such unreported data and information which were exposed through
the results of 2007 HBS and other surveys which are now being used in the base year, the
revised GDP is much higher than it was before. As such, nominal GDP for the new base
year (2007) is 27.8 percent higher compared to the old series. This implies that all indicators
reported as percentage of GDP such as tax revenue, imports and money supply have been
affected downwards though still portraying increasing trends.
7.2 Inflation
During the period under review the average annual headline inflation is 5.4 percent which
has shown a slight decrease by 0.9 percent from that recorded for the same period in
FY 2013/14.The slight decrease of Inflation is attributed to imported inflation caused by
appreciation of US$ against TZS, and the economic activities have been supported by
lower oil prices, a more neutral fiscal policy stance and improved monetary policy. The
annual headline inflation rates have shown a downward trend from August 2014 to January
2015, with the highest and lowest inflation rates at 6.7 percent and 4.0 percent recorded in
August 2014 and January 2015 respectively. The decreasing trend of inflation in the country
for the stated period indicates that, on average the speed of price increase for goods and
services decreased compared to that of 2014.
7.3 Exchange rate

The exchange rate in the Interbank Foreign Exchange Market (IFEM) has constantly
depreciated against US$. The exchange rate at beginning of FY 2014/15 was recorded at
TZS 1,664.2 per US$, while TZS 2,086.7 per US$ was recorded in June 2015. Depreciation
of the TZS against the currencies of our major trading partners resulted into price increase
of imported goods and services implying that the tax bases of the dutiable products had
increased.
53
DIRECTORS’ REPORT
8.0 PERFORMANCE FOR THE FINANCIAL YEAR 2014/15
8.1 Revenue Collection Results
Revenue collection during the year under review amounted to TZS 10,062.8 billion net of
refunds against a target of TZS 11,427.8 billion, reflecting a performance rate of 88%.
8.1.1 Revenue Collection Results - Tanzania Mainland

Revenue collection during the year under review amounted to TZS 9,918.8 billion net of
refunds against a target of TZS 11,261.7 billion reflecting a performance rate of 88% for
Tanzania Mainland. The actual collections versus Targets – Tanzania Mainland for the
year 2010/11-2014/2015 are shown in Table 7:
Table 7
Actual Collections versus Targets-Mainland Tanzania
2010/11-2014/15
(Million TZS)
Years
2010/11 2011/12 2012/13 2013/14
Details 2014/15
Target 5,652,590 6,228,833 7,871,428 10,320,155 11,261,741
Actual (Net) 5,367,235 6,494,933 7,802,302 9,288,999 9,918,817
Performance (%) 95 104 99 90 88
Source: TRA Accounts
8.1.2 Revenue Collection Results – TRA Zanzibar
During the year 2014/15, TRA collections in Zanzibar amounted to TZS 144.0 billion
against the target of TZS 166.1billion which is a performance rate of 87%. The actual
collections versus Targets – TRA Zanzibar for the year 2010/2011-2014/2015 are shown
in Table 8 below.
Table 8
Actual Collections versus Targets- TRA Zanzibar
2010/2011-2014/2015
(Million TZS)
Years
2010/11 2011/12 2012/13 2013/14 2014/15
Details
Target 69,241 100,580 106,730 147,900 166,056
Actual 76,357 91,652 103,879 136,688 143,993
Performance (%) 110 91 97 92 87
Source: TRA Accounts
54
DIRECTORS’ REPORT
8.0 PERFORMANCE FOR THE FINANCIAL YEAR 2014/15 (Continued)
8.2 Expenditure Performance
The actual expenditure for the period ended 30th June 2015 was TZS 243,784 million
against the budget of TZS 335,969 million, thus resulting to a positive variance of TZS
92,186 million, which is equivalent to 27.44 %. The summary of TRA actual expenditure
against the approved estimates for five consecutive years is shown in Table 9 below.
Detailed expenditure performance for 2014/15 is provided in the Statement for comparison
of TRA actual expenditures and approved budget for the year ended 30th June 2015.
Table 9
Summary of TRA actual expenditure against approved estimates for
five consecutive years
(TZS Millions.)
Financial Approved % of Actual % of Variance %
Year Estimates increase Expenditure Increase (Amount)
2010/11 162,232 (6.3) 157,555 15.5 4,677 2.9
2011/12 167,518 3.3 155,671 (1.2) 11,847 7.1
2012/13 235,714 40.7 205,445 31.97 30,269 12.8
2013/14 289,452 22.8 228,322 11.13 61,130 21.1
2014/15 335,969 16.07 243,784 6.77 92,186 27.43
8.3 Financial Results

During the year ended 30th June, 2015, TRA closed with a deficit of TZS 10,596.71
million (2014: a surplus of TZS 26,360.68 million) as shown in the statement of financial
performance. During the year, the operating expenditure of TRA increased by TZS
25,503.84 million. This was mainly attributed by general services, employees’ benefits
and travelling expenses on the other hand, total income during the period decreased
by TZS 12,566.54 million. The decrease resulted mainly from decrease in income from
Government.
8.4 Financial position

The financial position of the Authority is as set out in the statement of financial position.
During the year total assets of the Authority increased by TZS 826.03 million. This
was mainly attributed by decrease in Non-current Assets by TZS 11,142.03 million and
increase of current assets by TZS 11,968.07 million. On the other hand liabilities increased
by TZS 11,422.75 million. This was mainly attributed by increase in deferred income by
TZS 4,618.49 million and increase in Trade and other payables by TZS 6,804.25 million.
55
DIRECTORS’ REPORT
8.5 Cash Flows

The Authority’s cash flow is as set out in the cash flows statement. As at 30th June
2015, the Authority closed with cash and cash equivalents of TZS 72,567.35 million
(2014; TZS 72,689.73 million). The decrease is mainly attributed by decrease of cash
from operating activities by TZS 5,247.10 million, utilisation of funds for investing activities
TZS 12,277.70 million, increase of funds from financing activities TZS 15,843.13 million
and effect of exchange rate changes TZS 1,559.29 million.
8.6 Implementation of the initiatives under TRA’s Fourth Corporate Plan(CP4)

During the period under review, TRA was implementing the second year of the Fourth
Corporate Plan (2013/14 – 2017/18). The implementation of CP4 is mainly focused on
increasing share of domestic taxes collection to warrant reduction of dependency on
international trade taxes. CP4 is pivoted on three Strategic Themes of Convenience,
Compliance and Continual Improvement which are driven by a number of clearly defined
Strategic Objectives and Initiatives. During the two years of execution of CP4, new
developments and challenges have emerged which called for the need to review CP4 to
incorporate the changes in the plan. The revision exercise took place during the period
under review and revised version of CP4 was prepared with a view of bringing on board
contemporary issues that need to be part of the TRA strategy execution for the remaining
three years of the Plan. Moreover, the urge to review the plan emanated from the fact
that attainment of the Vision (to increase revenue to GDP ratio to 19.9% by 2018) of the
TRA has been challenged by the revision of the base year for computation of GDP figures
for Tanzania. The base has been changed from year 2001 to 2007. As a result of this
GDP rebasing, the TRA vision, which is basically a ratio of tax revenue to GDP, has been
affected significantly. This necessitated TRA to change its vision to “To increase domestic
revenue through enhancement of voluntary tax compliance”
Furthermore, execution of several initiatives were behind schedule hence needed to be

re-aligned realistically based on available resources both human and financial. In view of
that, a total of 30 initiatives changed their original planned completion dates for various
reasons, 6 initiatives changed ownership in line with the recent structural changes in
the organization, 3 initiatives have been merged into 1 and another 2 initiatives were
combined into 1 initiative as they had the same objective but were initially planned for
execution in phases. Another 2 initiatives were removed from the plan because they were
considered to be duplicates of other initiatives and 10 new initiatives have been identified
to be strategic and added to the revised CP4. The revised CP4 has a total of 69 initiatives
to be implemented for the period of five years (2013/14 – 2017/18).
During the financial year 2014/15 TRA continued receiving financial and technical
assistance from Development Partners (DPs) who play an important role in the execution
of CP4. The DPs supporting TRA include: DFID together with HMRC; DANIDA; Royal
Norwegian Embassy and Norwegian Tax Administration (NTA); US Treasury; IMF (HQ and
56
DIRECTORS’ REPORT
8.6 Implementation of the initiatives under TRA’s Fourth Corporate
Plan(CP4) (Continued)
East Afritac); World Bank Group; ICF and JICA. The assistance which includes financial
resources is channeled through the basket fund arrangement to which DFID and DANIDA
are currently the main contributors as well as the Norwegian Embassy. Other DPs provide
support mainly through Technical Assistances in areas such as audit of specialized sectors,
general tax administration and overall organizational management to ensure successful
implementation of CP4. In 2014/15, 42 Initiatives were planned for implementation out of
which 14 have been completed by 30th June 2015 hence making a performance of 33%.
Implementation status of the CP4 initiatives for 2014/15 by Theme is as shown in Table
10.
Table 10
Implementation status of CP4 initiatives for 2014/15 by Themes
Theme Number of Initiatives completed

Initiatives by June 2015
Planned
Convenience 17 4
Compliance 8 6
Continual Improvement 17 4
Total 42 14
Source: Planning and Modernization Department
Implementation status of corporate plan initiatives in year 2014/15 is as described

below:
8.6.1 Full implementation of Tanzania Customs Integrated System (TANCIS)

The initiative entails introduction of a robust Customs Management System to enhance
controls, facilitate trade and reduce clearance time at Ports, Airport and Border stations.
During the period under review, implementation of TANCIS Phase II commenced with
the development of module for Oil Monitoring, Licensing, Enforcement, and Passenger
Clearances followed by deployment of the same in the respective Customs units and
stations. Rollout to the remaining regions of Kigoma and Rukwa was completed in April
2015 while rollout to Zanzibar will be carried out during financial year 2015/16. In line with
this, Modules on Export Processing Zone, Manufacturing under Bond, Duty free shops,
In-flight catering and Online Auction were developed, tested and launched successfully.
As at 30th June 2015, TANCIS is operational in all major stations Tanzania Mainland.
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8.6.2 Implementation of Internal Audit Strategy

The objective of this initiative is to set out Internal Audit’s approach for delivery of
assurance and consulting services to the Management and Audit Committee of the TRA
Board which will lead to value addition on Internal Audit assignments. The Strategy is
currently on its second year of implementation and 18 out of 19 activities extracted from
this strategy which is 95% have been fully implemented while one activity (Developing
Staff Rotation Policy) is awaiting approval. The implementation of the Internal Audit
Strategy is expected to be completed in 2015/16.
8.6.3 Identification of skills gap and training needs for for Audit, Debt, Investigation,
Legal and Taxpayer Service Officers
The objective of the initiative is to enable the TRA to conduct skills gap analysis by
accomplishing: assessment of existing employees’ skills against work challenges;
establishing required skills for each of the targeted job function; developing Skills Map;
and designing training programs to address the identified gaps in skills. The assignment
was conducted during the period under review and a draft report was presented. Final
report will be issued in 2015/16.
8.6.4 Implementation of One Stop Border Posts (OSBP)

The objective of this initiative is to facilitate cross border trade through improvement of
Customs operations at the border posts for EAC member States and other neighbouring
Countries such as Zambia, Mozambique and Malawi. It is expected that when the project
is fully implemented it will enable passengers and goods to stop only once at the exit
points. The major activity in implementation of this initiative is construction of buildings
and the associated infrastructure.
The operations of OSBPs for all EAC member States in Horohoro (Tanzania/Kenya);
Namanga (Tanzania/Kenya); Kabanga (Tanzania/Burundi); Rusumo (Tanzania/Rwanda);
and Mutukula (Tanzania/Uganda) are expected to start in August 2015 as the construction
of most of the OSBPs is to be completed by July 2015. However, Kabanga OSBP is still
operating using the existing infrastructure. Construction of OSBP for other neighbouring
countries such as Zambia, Mozambique and Malawi are at different stages.
8.6.5 Review tax returns and filling procedures to simplify self -assessment
The initiative involves review and simplification of the tax return forms and filing
procedures to enable smooth implementation of self-assessment for all taxpayers.
During the period under review, TRA team in collaboration with a Consultant from US
Treasury reviewed the existing tax return forms and filing procedures. The revised forms/
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DIRECTORS’ REPORT
8.6.5 Review tax returns and filling procedures to simplify self -assessment
(Continued)
procedures were approved by TRA management in January, 2015. The revised forms
and procedures will form part of inputs required for development of e-filling module in the
existing computerised revenue system. The development is expected to be completed
in the first quarter 2015/16.
8.6.6 Enhance Electronic services (e-filing, e-payment, mobile payment)

Currently application of e-services is limited to VAT return filing, online TIN/VAT registration
and some mobile payments. The initiative requires enhancing electronic services whereby
filing of tax returns, registrations and payments are to be done electronically and for all
types of taxes. During the period under review user requirement, system specifications
and design document for e-filling of direct taxes were developed. It is anticipated that the
system will be in place in year 2015/16.
8.6.7 Establishment of Taxpayer Advocacy Services (TAS)

The objective of the initiative is to enhance good governance capability .The initiative
requires TRA to establish a framework that could facilitate and be a “go- between” for
the public and the government. It involves establishment of tax ombudsman office that
act as an independent advocacy mechanism. The TAS will assist taxpayers to resolve
problems with TRA and recommend changes to deter recurrence and create conducive
environment for fostering voluntary tax compliance. During the period under review, a TAS
Project Road Map was developed which entails; TAS pilot project; Taxpayer Advocacy
Regional Panels (members and compensation packages), Proposed TAS organization
structure; Legal framework for the pilot project and project expectations. TAS Road Map
and action plan for pilot sites were presented to the Standing Committee of the Board on
26th June 2015. It is expected to be operational in subsequent periods.
8.6.8 Development and implementation of Business Continuity Management

System (BCMS)
The initiative intends to enable TRA to continue with service delivery at acceptable
predefined levels following a disruptive incidence. Business Continuity Management
System (BCMS) is part of the overall management system that establishes implements,
operates, monitors, reviews, maintains and improves Business Continuity. During the
period under review, TRA engaged a Consultant for development of BCMS in TRA. The
project will be implemented in a phased approach whereby phase 1 will be for Analysis
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DIRECTORS’ REPORT
8.6.8 Development and implementation of Business Continuity Management
System (BCMS) (Continued)
(Threat Assessment and Business Impact Analysis), phase 2&3 will be for Design and
Implementation (Identification of Business Recovery Response Options & Development
of Business Continuity Plan (BCP)) while phase 4&5 will be for BCP validation and
creating awareness (Management Review, BCP, Testing & Training workshop). BCP
project implementation is expected to commence in July 2015 and complete in June
2017.
8.6.9 Designing a Social Media Strategy to interact with Stakeholders

The initiative is aimed at increasing channels for interacting with taxpayers through
social media that includes; Facebook, Twitter, LinkedIn, You Tube and Instagram in order
to improve customer perception and increase in compliance. During the period under
review the social media strategy was designed and approved. The social media named
Twitter, Linkedln and You Tube are expected to be activated in year 2015/16 for external
stakeholders and a blog for internal users.
8.6.10 Review Performance Management System Criteria for assigning

weightage
The implementation of this initiative commenced in April, 2015 by developing a guideline
for assigning weightage and conducting performance appraisal. The guidelines reviewed
performance management System and proposed weightages to be assigned on each
perspective in the Balanced Score Card Performance Management Form cadre-wise.
During the period under review, guidelines for assigning weightages and conducting
performance appraisal were prepared. This will enable the Authority to have a robust guide
for managing performance and conducting performance appraisal in year 2015/16.
8.6.11 Implementation and monitoring an integrated risk based compliance

strategy for Domestic Taxes
The objective of the initiative is to develop a compliance strategy for Domestic Revenue.
The initiative requires development of a mechanism to measure, monitor and report on
performance and compliance level of the strategy. Monitoring will be based on sectors
and key processes (Registration, Filing of Returns, Audit, Collection & Accounting,
Objection & Appeals, Refunds), for each taxpayer segment (large, medium, small).
During the period under review TRA Compliance Risk Management Policy and
Framework was eloped with support of IMF Consultant and final draft of the Policy and
Framework was approved. Following this achievement, Compliance Risk Management
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DIRECTORS’ REPORT
8.6.11 Implementation and monitoring an integrated risk based compliance
strategy for Domestic Taxes (Continued)
Strategy working Group (CWG) and Compliance Council which comprises selected Top
Management were formed. In line with this Compliance risk management action plan for
2015/16 has been developed.
8.6.12 Integrate collection and accounting processes to increase accuracy and

on-time reporting
Collection and accounting processes are carried out by Finance and Revenue
Departments without a robust integrated system to streamline the processes, as a
result there had been delays in issuance of revenue collection performance reports.
This initiative therefore entails the integration of the two processes in order to increase
accuracy and on-time reporting of revenue collection performance. The Phase I of the
project (Revenue Gateway System) was implemented in collaboration between TRA and
Bank of Tanzania. The Montran Corporation consultant was engaged in development of
an interface system which improved the process of revenue collections and achieved
Straight Through Process (STP) between TISS-CBS and PACS at BOT, ITAX and TANCIS
at TRA, Commercial Banks and other stakeholders such as Mobile phone operators to
enable automation of taxpayer’s payment validation in TRA systems.
In increasing automation efficiency, Phase II of Revenue Gateway System was initiated

by utilizing internal capacity. The following modules have been developed; fuel levy
transaction processing that includes oil payments and deposits by taxpayer and reports on
such deposits, payments made in instalments; non swift payments that include integration
with the commercial banks (Taxbank) and SMS acknowledgement to taxpayers.
Modules for reconciliation of payment transactions between RGS, ITAX, TANCIS,

Commercial Banks systems, refunds and withholding taxes are under development, they
will be released next financial year. In line with this, M/S Trustlink (Pty) Ltd was engaged
by the Authority to upgrade Alliance Lite to Alliance Access software that will increase
performance of SWIFT integration for tax collections. The implementation of the system
is expected to be finalized at the end of the next financial year.
The implementation of RGS was commended by the Ministry of Finance as it has enabled
swifter realization of revenue collection and updating of taxpayers’ accounts in real time.
Currently the system is managing 89% of total collection by volume.
8.6.13 Formulating parameters for Legal Services involvement in tax operations

The initiative aims at involving legal expertise on complex cases prior to issuance of
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DIRECTORS’ REPORT
8.6 Implementation of the initiatives under TRA’s Fourth Corporate Plan
(CP4) (Continued)
8.6.13 Formulating parameters for Legal Services involvement in tax
operations (Continued)
additional assessments to reduce the possibility of objections. During the period under
review the formulation of parameters for legal service in tax operations has been fully
completed and circulars have been issued taking effect from 1st July 2015.
8.6.14 Implementation of Electronic Fiscal Devices (EFD) Phase II

The main objective of introducing EFD is to increase controls, curb possible loopholes
strategies for smooth and sustained tax collection. The implementation of EFD system
was planned to be implemented in two phases, the First Phase covering all VAT
Registered traders and the Second phase is for non-VAT registered traders. During
the year under review, machines acquired were 2,175 and 11,466 for VAT registered
and non – VAT traders respectively. The performance is unsatisfactory mainly due to
resistance by most of the traders to acquire and use the EFDs. To address this, the
Government established District, Regional and National Enforcement Committees. The
Committees focus on addressing challenges which were raised by taxpayers following
the introduction of EFDs. The District/Regional committees chaired by District/Regional
Commissioners comprise members from TRA and Taxpayers. While the National
Committee is chaired by the Assistant Commissioner Fiscal Policy from the Ministry of
Finance and it comprises members from TRA, Ministry of Finance, Ministry of Industry
and Trade, Ministry of Home Affairs, Prime Minister’s Office and Taxpayers.
8.6.15 Align Training Needs Analysis to the Performance Management System

The initiative requires training plans to be developed taking into account the training
needs extracted from the performance management system as agreed by appraisee and
appraiser. Hence the training programme will include the extracted training needs from
performance management system and the organizational demand for capacity building.
During the period, business processes in Human Resources Information System (HRIS)
were refined and Departmental training coordinators were trained on the application of
the system. The system will be used effective from financial year 2015/16.
8.6.16 Streamline Audit and Investigation process to reduce objections

The initiative aims at reorganizing the Tax Audit process and Tax Investigation process
in order to improve efficiency through elimination of overlapping activities. This initiative
is being implemented in two phases (Phase I audit process and Phase II investigation
process) with assistance from NTA. During the period, audit processes were reviewed
and reduced from five (5) to four (4) stages.
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DIRECTORS’ REPORT
8.6.17 Implementation of Central Motor Vehicle Registration System (CMVRS)
The objective of establishing the CMVRS was to modernize and facilitate registration
of motor vehicles by replacing the old documents with new and secured ones, reducing
number of fraudulent registrations and maintain reliable data for motor vehicle information
in administering road safety. During the period under review 256,125 vehicles were
registered .This is equivalent to a decrease of 0.01% compared to 256,171 vehicles
registered in 2013/14. The total registered vehicles for 2014/15 yield revenue amounted
to TZS 116.4 billion.
8.6.18 New Registration of Motor Cycles and Tricycles

The Government through the year 2014/15 Budget speech of the Minister for Finance
announced the new registration system for Motor Cycles and Motor Tricycles with effect
from 1st October, 2014. Motor Cycles and Motor Tricycles have separate numbering
system from Motor vehicles. During the period under review, a total of 6,924 Motor
Tricycle and 128,367 Motor Cycles have acquired new registration number plates.
8.6.19 Developing and implementation of succession Planning program

The objective of this initiative is to identify and develop a talent pool from internal staff
with the potential to fill key managerial positions in the organization. The initiative entails:
identification of staff with the potential to assume key responsibility in the organization;
provision of critical development programmes to those who can move into key roles;
building a successor pool database that can be used to make better staffing decisions
for key jobs.
During the period under review, the initiative was aligned to the Corporate Human
Resources Policy and Strategy document that covers most of the aspects of developing
and implementing succession planning program. The policy and strategy document was
approved by the Board in May 2015. The development of Succession Planning and the
implementation will be done in collaboration with a consultant during the financial year
2015/16.
8.6.20 Review and strengthening information security management programs

(Enterprise Security Architecture)
The objective of this initiative is to describe the activities that relate to the protection
of information and information infrastructure assets against the risks of loss, misuse,
disclosure or damage; and controls that an organization needs to implement. The
initiative entails; operationalizing ICT security policies; implementing security governance
and management framework based on ISO 27001 standard and conduct training and
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DIRECTORS’ REPORT
8.6.20 Review and strengthening information security management
programs (Enterprise Security Architectur (Continued)
capacity building. During the period under review, the HMRC visited TRA and conducted
a review of the AS-IS Information Security Controls that are in place and issued various
recommendations. TRA in collaboration with HMRC will work on the recommendations
in year 2015/16
8.6.21 Maintaining TRA Quality Management System (QMS) – ISO 9001:2008

TRA is certified for Quality Management System (QMS) based on the ISO 9001:2008
International Standard. During the period under review, TRA successfully attained the
ISO 9001:2008 re-certification following an external surveillance audit conducted in
November 2014 by Bureau Veritas which was after independent confirmation that TRA
meets the requirements of ISO 9001:2008.The ISO certificate number IND15.6179U/Q
which is valid from 11th March, 2015 to 10th March, 2018 was issued to the Commissioner
General on 17th March, 2015. Additionally, as per the requirements of the standard and
in line with the Annual QMS Internal Audit Program, TRA conducted the Internal Quality
Audit to all tax regions, Zanzibar, Pemba, and HQ offices.
8.6.22 Enhancing Practical Nature of ITA training programmes

The initiative aims at enhancing constant interaction between ITA trainers and relevant
practice, entrench the Competency Based Education Training (CBET) approach as the
primary delivery methodology and introduce internship requirements for trainees. During
the period under review ITA adopted initiatives geared towards enhancing practical nature
of programs offered at the Institute. These include the introduction of Instructors’ cadre
in the Authority’s Career Pathway to create an incentive for competent and experienced
staff working in various departments to be transferred to ITA horizontally as full time
trainers.
Additionally, ITA training programmes have been reviewed and Pre-service Graduate
Training Programme (PGTP) was introduced in April 2015. A total of 150 new staff are
currently undergoing the PGTP.
8.6.23 Assessing Possibility of Rebranding TRA

TRA has been viewed as an Authoritative agency by stakeholders. The aim of this initiative
is to carry out an assessment for changing the perception of TRA to a service oriented
organization and make necessary changes to reflect the desired image and culture. During
the period under review the Consultant from HMRC of the United Kingdom through DFID
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DIRECTORS’ REPORT
8.6.23 Assessing Possibility of Rebranding TRA (Continued)
visited TRA to review the current brand and concluded that there is considerable scope
for TRA to rebrand to reflect a more modern and outward-facing image. The rebranding
will require a range of activities with a view to creating a long-term brand identity that
clearly and consistently communicates the values and core functions of TRA across all
touch points. In addition the initiative will need to consider how it engages with both its
staff and its customers. The review report will be presented to Management for decision
and way forward in year 2015/16.
8.6.24 Implementation of Administrative Reforms of the TRA Informal Sector

Study
The initiative aims at bringing the informal sector into tax net. It entails implementation of the
administrative recommendations from the informal sector study that was conducted by the
TRA previously. During the period under review, the working group comprising members
from TRA and Municipal Councils identified workable areas. To start with unregistered
garages in Kinondoni were identified as pilot project. The owners of unregistered garage
were allocated with permanent working places by the Kinondoni Municipal council. The
Kinondoni tax region has identified a total of 38 unregistered garages and a total of TZS
3,613,744 was established and collected as tax by 30th June 2015. The exercise will
span into other large regions during the financial year 2015/16. Other identified workable
areas include proposal for review of the current presumptive tax rates which have been
effected through Finance Act, 2015 by reducing minimum presumptive tax rate from TZS
200,000 to TZS 150,000. Proposal to introduce GIS System to facilitate monitoring of
Taxpayers movement, utilization of Regional EFDs Committees as well as District Tax
Advisory Committees to address issues pertaining to informal sector.
8.6.25 Designing and implementation of an Integrated Application Architecture

TRA is implementing a number of standalone systems which pose a challenge on
information sharing. TRA is intending to introduce Integrated Enterprise Application
Architecture (EA) that will support information sharing across the organization. During the
period under review, brief awareness training on Enterprise Architecture was presented
to the members of TRA ICT Steering committee and other invitees in January 2015
by the Danish Consultant as part of the project implementation. Working sessions on
information gathering, analysis and verification was done by the various working groups
of the EA project in Morogoro in March, 2015 .Further, The Danish Consultant conducted
workshop on Enterprise Architecture related challenges, Business Strategy Synthesis,
IT principles, Rationale and Implications to the working groups of the project in May,
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DIRECTORS’ REPORT
8.6.25 Designing and implementation of an Integrated Application
Architecture (Continued)
2015. The workshop was followed by working sessions on documenting operational

TRA Business model and AS-IS application, information and Technology Architectures.
Architectures and identification of transition projects will be conducted in the financial
year 2015/16.
8.6.26 Designing and implementation of Gemba Kaizen Management System

(GKMS)– Phase III
The aim of introducing GKMS in TRA is to provide a climate in which creativity and value
addition flourish. Continuous Improvement (Kaizen) is one of the core strategies for
excellence in service delivery and is considered vital in today competitive environment.
Kaizen lead to identify the problems in the working environment, proposing solutions and
making positive changes.
During the period under review GKMS roll out phase III was implemented in the remaining
regions of Rukwa, Mara, Lindi, Manyara, Kigoma, Singida and TRA Pemba. The
implementation commenced in December 2014 and came to an end in June 2015. To
build continuous improvement and embracing Gemba Kaizen culture in TRA, the roll out
exercise involved establishment of GKMS committee/team in each region/ department to
oversee Gemba Kaizen implementation within the departments/Regions.
9.0 KEY PERFORMANCE INDICATORS
TRA has key performance indicators to measure its performance in various areas of
tax administration. Those indicators include; number of registered taxpayers, number
of registered VAT taxpayers, performance of processing VAT refund claims, awareness
of taxpayers on tax education programmes, corruption perception, Revenue collection
performance for a given period, and average time taken to clear goods at entry points.
Definitions, purpose, sources of data and calculation method for each indicator are given
in Table 12 below;
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DIRECTORS’ REPORT
9.0 KEY PERFORMANCE INDICATORS (Continued)
Table 12
TRA’s Key Performance indicators
DEPARTMENT Area Definition Purpose Source of Data Calculation Method
DOMESTIC Registered Taxpayers Number of Registered Determine the number CDR (TIN system) Physical count
REVENUE Taxpayers of taxpayers in the tax
net
Revenue Collection Monthly revenue collection Monitor trends of Monthly flash reports Revenue collected/Revenue
performance performance revenue collection from DF target
against revenue target
Total revenue realised Revenue realised from Determine magnitude of CDR (Manual records) Revenue realised from audits
from audits/revenue audits revenue collected from during the period/Revenue
collected Audit to understand the collected during the period
extra effort required and
to increase the level of
compliance
% of VAT refunds made VAT refund claims made by Ensuring VAT refund CDR (Manual records) Number of days from date
within a month taxpayers to Taxpayers is made of lodgement to the date of
within the stipulated refund should be less or equal
timeframe to one month
LARGE Registered Taxpayers Number of Registered Determine the number CDR (TIN system) Physical count as per
TAXPAYERS Taxpayers of taxpayers in the tax registration data
net
Number of taxpayers Number of Top Taxpayers Determining the CLT (Manual records) Cumulative sum of revenue

accounting for 80% of accounting 80% of largest taxpayers for collected from large
revenue revenue collection in Large specialised services and contributors(Taxpayers in
Taxpayers Department enforcement actions descending tax payments
from the largest to achieve
80% of total collection
Revenue Collection Revenue collection Monitor trends of Monthly flash reports Revenue collected/Revenue
performance performance for a given revenue collection from DF target
period against revenue target
67
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DIRECTORS’ REPORT
9.0 KEY PERFORMANCE INDICATORS (Continued)
DEPARTMENT Area Definition Purpose Source of Data Calculation Method
CUSTOMS AND Revenue Collection Revenue collection Monitor trends of Monthly flash reports Revenue collected/Revenue
EXCISE performance performance for a given revenue collection from DF target
period against revenue target
Average Time Taken to Average time taken to clear Ensure clearance time CCE (TANCIS System) Cumulative time (days) from
clear goods - Arrival to goods from when they enter of goods is reduced arrival of goods to removal
Removal (days) to when they exit
Average Time Taken to Average time taken from Ensure clearance time CCE (TANCIS System) Cumulative time (days) from
accomplish Customs when declarations are of goods is reduced Lodgement to issuance of
Clearance - Lodgement lodged in TANCIS to when Release Order
to Issuance of Release release order is issued
Order (days)
% of Cargo Manifests Cargo manifests submitted Ensure clearance time CCE (TANCIS System) (Manifest submitted before
submitted/ registered or registered before arrival of goods is reduced arrival of vessel/Total number

before arrival of vessel/ of vessels or flight/total of manifest) * 100
flight manifests registered
% Customs clearance Percentage of Customs Ensure clearance time CCE TANCIS System) (Clearance made within
made within 24 hours clearance attended to of goods is reduced 24 hours/Total number of
(Lodgement to Issuance within 24 hours Customs clearances)*100
of Customs Release
Order)
INTERNAL Corruption Perception Magnitude of abuse of Determine the degree DINA(Survey) Percentage level of
AFFAIRS Index entrusted power for private to which corruption respondents with perception
gain as perceived by is perceived to exist that TRA staff are corrupt
stakeholders among TRA staff
TAXPAYER Percentage of Percentage of taxpayers Identify the needs of DTSE (Stakeholders (Number of taxpayers
SERVICES AND taxpayers awareness who are aware on tax education programs perception surveys) interviewed and their level of
EDUCATION on tax education education programs for each category of awareness
programs conducted by the taxpayers
Taxpayers Service and
Education Department
Percentage of written Percentage of written Determine promptness DTSE (TRA Website - (Number of written enquiries
enquiries attended enquiries through TRA in responding enquiries) attended within seven days/
within seven days website attended within stakeholders enquires Total number of written
seven days made through TRA enquires)*100
Website
DIRECTORS’ REPORT
10.0 RESULTS ON KEY PERFORMANCE INDICATORS
TRA has a number of key performance indicators which are important tool for measuring and assessing operations, efficiency
and effectiveness of tax administration. Table 13 below provides status of key performance indicators as at 30th June 2015.
Further, the table indicates trend for the previous years.
Table 13
Status of key performance indicators as at 30th June, 2015
DEPARTMENT Area Particulars Actual 2013/14 Target 2014/15 Actual 2014/15
DOMESTIC Registered Taxpayers TIN Registered 1,783,511 2,447,730 1,990,032
REVENUE VAT Registered 24,346 28,550 25,908
Revenue Collection performance 83.7 100 92.7
Total Revenue realised from audits/revenue collected 12 10 13
% of VAT refunds made within a month 74 85 71
LARGE Registered Taxpayers 450 450 450
TAXPAYERS Number of taxpayers accounting for 80% of revenue 52 54 53
Revenue Collection performance 94 100 82.2
CUSTOMS AND Revenue Collection performance 88.7 100 92.8
EXCISE
Average Time Taken to clear goods - Arrival to Removal Land Border stations 2 1 2
(days) Airport -JNIA 4 2 4
DSM Port 11 7 11
Average Time Taken to accomplish Customs Clearance Land Border stations 2 1 0.9
- Lodgement to Issuance of Release Order (days) Airport -JNIA 1 1 1.4
DSM Port 4 1 0.2
% of Cargo Manifests submitted/registered before Airport -JNIA 0 100 2
arrival of vessel/flight
DSM Port 91 95 93

% Customs clearance made within 24 hours Land Border stations 81 94 86
(Lodgement to Issuance of Customs Release Order) DSM Port 36 70 82
Airport -JNIA 78 90 64
INTERNAL Corruption Perception index
Stakeholders Perception (%) 47 46 47
AFFAIRS
TAXPAYER Percentage of taxpayers awareness on tax education
Stakeholders Perception (%) 95 90 78
SERVICES AND programs
EDUCATION Percentage of written enquiries attended within seven
Website enquiries (%) 71 97 97
days

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DIRECTORS’ REPORT
11.0 IMPLEMENTATION CHALLENGES
Strategic Initiatives lined-up for implementation during the second year of implementation
of the TRA’s CP4 were 42. However, due to a number of challenges only 14 initiatives
have been completed that makes performance of 33%. The remaining 28 have been
rolled over to the financial year 2015/16 and some are multi-year projects. The following
are some of the challenges faced during the implementation of the TRA’s CP4 in the
second year:
a) The Government decision to change the base year for computation of GDP figures
from 2001 to 2007 prices necessitates the review of CP4 and the vision for the
Authority. The vision has to be changed because it is a ratio of revenue to GDP
and has been directly affected by the rebased GDP figures as well as the revenue
forecasts for the duration of the CP4. The review was conducted from February to
April 2015 which also entailed thorough assessment of the initiatives implementation
in terms of timing and relevance in the current and future operating environment.
b) Delayed procurement brought about not only by procurement regulations but also
due to re-tendering of some of initiatives. During the period under review re-tendered
initiatives included; Introduction of New Integrated Domestic Tax Administration
system (IDRAS); Design and Implementing an Integrated Enterprise Application
Architecture and Study on physical asset requirement, performance and utilization.
Following the review, it is expected that implementation of the CP4 initiatives will be
completed as planned.
c) Revenue Collection
Revenue collection target for the second year of the Fourth Corporate Plan was
set at TZS 11,427,797 million net of refunds against TZS 9,425,687 million realized
in 2013/14. During year 2014/15 TRA has collected TZS 10,062,810 million net
of refunds in Tanzania Mainland and Zanzibar. This achievement represents a
performance of 88%. The performance has been adversely affected by amendments
of Corporation Tax, Taxpayers resistance to pay individual income tax due to
increase in presumptive tax rates by almost 100%, Non-payment of withholding tax
(IRMD) by some companies and underperformance on Fuel Levy. Further, during
the year under review there was an over estimation of target for capital gain tax as
a result of windfall tax paid in year 2013/14 by Ophir.
d) Resistance in acquisition and usage of EFDs

During the period under review, most of the traders who were supposed to acquire
and use EFDs resisted to do so. This necessitated TRA to halt enforcement of
usage of the EFDs to pave way for negotiations with taxpayers through their
association. This resulted to unsatisfactory performance of acquisition and usage
of EFDs.
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DIRECTORS’ REPORT
12.0 EVENTS SUBSEQUENT TO THE FINANCIAL STATEMENTS’ DATE
There were no significant events subsequent to 30th June, 2015 affecting the revenue
and expenditure financial statements that require disclosure.
13.0 FUTURE DEVELOPMENT PLANS
During the year 2015/16, TRA is required to collect TZS 12,541.52 billion as well
as implement a total of forty five (45) initiatives out of which 30 are expected to be
completed by June 2016 while the remaining 15 are spanned and will be completed
in the subsequent years. The on-going reforms within the TRA CP4 will significantly
contribute in achieving the target and realising the revenue to GDP ratio estimated at
13.1% for 2015/16. Some of the main reforms include; the implementation of Enterprise
application architecture Introduction of the Integrated Domestic Revenue Administration
System (IDRAS); Implementation and monitoring of an integrated risk based compliance
strategy for Domestic Taxes; Continue with training and capacity building of tax auditors
in specialised sectors (oil, gas, telecom & financial); implementation of a comprehensive
taxpayer service and education program for each segment.
14.0 RISK MANAGEMENT AND INTERNAL CONTROL
The TRA Board is vested with the overall responsibility for risk management and internal
control systems of the Authority. Further, the management of TRA is responsible for
ensuring that adequate internal financial and operational control systems are developed
and maintained on an on-going basis in order to provide reasonable assurance
regarding:
a) The effectiveness and efficiency of operations;
b) The safeguarding of the Authority’s assets;
c) Compliance with applicable laws and regulations;
d) The reliability of accounting records
e) Business sustainability under normal as well as adverse conditions; and
f) Responsibility behaviours towards all stakeholders.
The key elements of the TRA system of internal control are as follows:
Delegation
The overall objectives of the Authority are agreed by the TRA Board, which delegates
the day-to-day operations to Management for execution. There is a clear organizational
structure detailing lines of authority.
Budgets
The annual budget is allocated by the Ministry of Finance in accordance with the provisions
governing the Medium Term Expenditure Framework (MTEF). TRA uses Activity Based
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DIRECTORS’ REPORT
14.0 RISK MANAGEMENT AND INTERNAL CONTROL (Continued)
Budgets (Continued)
Budgeting approach with an extensive planning and governance process focused on the
Corporate Plan to determine its operational and capital requirements. Detailed annual
budgets are prepared by the management for review and approval by the TRA Board.
Quarterly Budget Performance reports are prepared and evaluated by Management and
submitted to the Board to monitor actual performance against budgets.
Risk Management:
TRA Management recognizes that the management of risk is an integral part of a
sound management system. Therefore, TRA ensures that effective risk management is
embedded in all management processes within the Authority. This has been achieved
through adoption of the Enterprise-Wide Risk Management System (ERMS). The system
enables Management to deal effectively and efficiently with uncertainties and associated
risks and opportunities.
TRA has formulated and adopted the following policy statement:

“TRA shall identify and manage enterprise risks in support of its vision, mission,
and objectives as set out in the Corporate Plan by adopting best practices to
ensure that risks are minimized to an acceptable level”
TRA’s risk profile covers two categories of general risks which are Strategic Risks and
Operational Risks. Explanations for each of the risk categories are provided below:
Strategic Risks
These are risks that have a current or potential impact on TRA strategic objectives
as outlined in the Corporate Plan. These may arise from adverse business decisions,
improper implementation of decisions, or lack of responsiveness to industry changes.
Strategic Risks among others focus on risks originating from change in legislation and
Government policies, sources of funding, and economic conditions which affect TRA’s
strategic operations.
Operational Risks
These risks are associated with direct or indirect loss resulting from inadequate or failed
internal processes. This risk category focuses on among others risks associated with fraud
both internal and external, work practices, skills level, workplace safety, performance
incentives and employee turnover.
Further, the Authority has identified seven Corporate risks namely;

a) System unavailability
b) Inadequate knowledge and skills in project and contract management
c) VAT refunds – insufficient VAT refund budget and improper management
of refunds process
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DIRECTORS’ REPORT
Operational Risks (Continued)
d) Improper assessment of correct income and inability to identify sectors
with high revenue yield
e) Inconsistent information through social media
f) Non adherence to laws, regulations and TRA QMS procedures
g) Prolonged procurement process
The identified risks have an overall impact on the achievement of the Strategic Themes,
Strategic Objectives, and the ultimate goal of attaining the TRA vision as provided for in
the CP4. The mitigations for the identified Corporate Risks are implemented in line with
the implementation of the Departmental Plans.
On the other hand, operational risks are continually identified at departmental level
based on the CP4 initiatives, core processes and other operational processes during the
preparation of Annual Departmental Plans. Additionally, the ERMS Procedure has been
documented based on the requirements of ISO 9001:2008 Standard. This procedure
provides a clear guidance and step by step instructions to follow during the Identification,
Monitoring and Communication of risk status to the interested parties such as the TRA
Board, Management and staff.
During the period under review, the Authority evaluated all Corporate Risks (CRs). The
results suggested that four (4) CRs i.e. System Availability; Inconsistent Information
through Social Media; Prolonged Procurement Procedures; and Non adherence to laws,
regulations and TRA Quality System Procedures (QSPs), have started to shift to Green
zone. The remaining three (3) CRs which are Improper Management of VAT Refunds;
Improper assessment of correct income and Inadequate knowledge and Skills in Project
and Contract Management have remained stagnant in the red zone. The Authority is
continuing to take appropriate measures to address the situation and will re-assess the
situation in year 2015/16.
Additionally, TRA has developed Compliance Risk Management Policy and Framework
based on the ERMS Policy and Framework. Following this development, a Compliance
Risk Management Plan for 2015/16 was developed.
Liquidity Risk Management

Liquidity risk is the risk that an entity will encounter difficulty in raising funds to meet
obligations associated with financial instruments. TRA manages its liquidity risk to
ensure it is able to meet estimated expenditure requirements. This is achieved through
prudent liquidity risk management which includes maintaining sufficient cash and cash
equivalents. TRA’s main sources of income are the annual budget allocation from the
Ministry of Finance and other sources of income. The income is used to fund TRA’s
operational and capital requirements. The annual budget is allocated by the Ministry in
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DIRECTORS’ REPORT
Operational Risks (Continued)
Liquidity Risk Management (Continued)
accordance with the provisions governing the Medium Term Expenditure Framework
(MTEF). TRA uses Activity Based Budgeting approach with an extensive planning and
governance process focused on the Corporate Plan to determine its operational and
capital requirements. This is considered to be adequate mitigation for liquidity risk.
Safeguarding of Assets
The Board is responsible for safeguarding the assets of the Authority. The Board approves
various policies and regulations including the Financial Regulations, Procurement
Regulations and Staff Regulations in order to strengthen the internal control environment.
These are reviewed from time to time to align them with the dynamic of the operating
environment.
Internal Audit
TRA has internal Audit Department that assesses risks and reviews governance and
controls processes. The department reports functionally to the Audit Committee of the
Board, and administratively to the Commissioner General. The Department ensures
that audit recommendations to improve risk management, controls and governance
processes are implemented by management. Whilst no system of internal control can
provide absolute assurance against misstatement or losses, the Internal Audit Department
among other activities is responsible to provide the Board reasonable assurance
that the Authority’s systems and practices in place on risk management, controls and
governance are adequate and effective. The Board assessed the internal control systems
throughout the financial year ended 30th June 2015 and is of the opinion that they met
the acceptable criteria. The Board carries risk and internal control assessment through
its Audit Committee.
15.0 SOLVENCY
The TRA Board confirms that applicable accounting standards have been followed and
that the financial statements have been prepared on a going concern basis. The Board
has reasonable expectation that Tanzania Revenue Authority has adequate resources to
continue in operational existence for the foreseeable future.
16.0 RELATED PARTY TRANSACTION
All related party transactions and balances are disclosed in Note 28 of these financial
statements.
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DIRECTORS’ REPORT
17.0 EMPLOYEES’ WELFARE
17.1 Management and Employees’ Relationship

In line with Employment and Labour Relations Act, TRA has the staff regulations, which
elaborate procedures for solving grievances of employees. There is in place an elaborate
system of handling disciplinary cases and resolving grievances of employees through
their immediate supervisors to highest level. An employee who is discontented shall
discuss the matter with his/her immediate supervisor first before going up the ladder. The
relationship between management and staff for year 2014/2015 was generally healthy.
However, during the year under review, there were 75 staff cases out of a standing
workforce of 4,237 staff, this is equivalent to 1.8%. The disciplinary cases mainly emanated
from violation of customs cargo clearing procedures; fraudulent changes of data in motor
vehicle registration system; violation of procedures during calculation of capital gain tax;
fraudulent access and manipulation of data in revenue tax administration systems. Out
of 75 cases, 33 cases were concluded. The remaining 42 cases are in various stages of
disciplinary machinery. Results of concluded cases are as shown in Table 14 below:
Table 14: Results of concluded staff cases for the period ended 30th June, 2015
S/N Results Number of Cases

1 Terminated 7
2 Given written warning 3
3 Suspended 2
4 Cleared from the charges 21
5 Total 33
Further, during the period under review, Management approved formation of workers
council with the view of involving staff in decision making especially in matters relating
to their welfare and motivation. In this regard, TRA in collaboration with the Ministry for
Labour conducted sensitization program to about 20 Regions with the view of introducing
the concept to employees
17.2 Training Facilities

TRA recognises that human capital is the most important resource and as such it is
committed to the training, development and education of its workforce through cost
effective programmes so that they gain relevant skills, knowledge and attitude or behaviour
necessary to reach their full potential. The Authority believes that in doing so it will be
able to produce highly qualified, confident, professional, and competent staff working as
an effective and productive team. This will in turn enable effective and efficient delivery
of the Authority’s Corporate Plan and realisation of its Vision and Mission. In this regard,
during the period under review, the Authority carried out training needs analysis and came
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DIRECTORS’ REPORT
17.0 EMPLOYEES’ WELFARE (Continued)
17.2 Training Facilities (Continued)
up with a comprehensive training plan which focuses on the Authority’s strategic goals.
Some of the identified trainings were conducted at the Institute of Tax Administration (ITA)
while others were conducted by other institutions within and outside the country. Also,
as part of capacity building, some staff were attached to other Revenue Authorities in
order to gain practical experience. Further, the Authority established specific 12 months
course for new recruits who will work in operational area. The course is being conducted
at Institute of Tax Administration. The purpose of the course is to ensure that new recruits
are equipped with necessary tax administration skills before embarking in operations. All
these efforts went hand in hand with improvement of training facilities at ITA.
17.3 Financial Assistance to Staff

Loans are available to staff depending on the need and availability of funds. Also, the
Authority has signed agreements with commercial banks and other financial institutions
that provide loans to TRA staff. Under these arrangements, the Authority guarantees
to remit monthly staff salaries to the commercial banks where the staff maintain bank
accounts or to recover the agreed instalment from staff salaries and remit the same
to respective commercial bank/financial institution. Further, Management continues to
influence TRA staff to join TRA Staff SACCOS to promote their welfare.
17.4 Person with Disabilities

TRA is implementing ‘an equal opportunity to all’ policy whereby employment
opportunities are advertised and follow a competitive process. In the process, the Authority
has been getting staff of all calibres including some disabled staff. This is in keeping with
the Regulation 21 of the TRA Staff Regulations 2009 (Revised Edition of 2012) which
states that “The Authority is an equal opportunity employer. It will therefore provide equal
access to employment and ensure that the best available person is appointed to any
given position free from discrimination of any kind and without regard to factors like
gender, marital status, tribe, religion, political affiliation or disability which does not impair
ability to discharge duties”
In addition, career development and training for the staff is given to all based on needs
following training by objective approach. Also, in the event the staff becomes disabled
due accidents, Workman’s Compensation and Group Personal Accident Policies are
provided to the staff.
17.5 Employees Benefit Plan

The Authority contributes to defined contribution plan and pays pension contributions
to Parastatal Pensions Fund (PPF), National Social Security Fund (NSSF), Zanzibar
Social Security Fund (ZSSF), Local Authorities Pensions Fund (LAPF), Public Service
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DIRECTORS’ REPORT
17.0 EMPLOYEES’ WELFARE (Continued)
17.5 Employees Benefit Plan (Continued)
Pension Fund (PSPF) and Government Employees Provident Fund (GEPF). Also, the
Authority operates un-funded Gratuity plan for its Senior Management staff who are
employed on fixed contract term. In addition when employment is terminated before
the normal retirement date for various reasons, the Authority pays termination benefit.
Further, during the period under review, the Authority issued twenty two (22) corrugated
iron sheets to each retiree.
17.6 Health and Safety

TRA continues to provide protective gears to its staff where necessary and ensures
existence of sound policy and strategies pertaining to HIV and AIDS and installed
necessary systems to ensure safety in its operational areas. Further, the Authority is
fully complying with health and safety regulations in which relevant regulatory authority
– Occupational Safety and Health Administration (OSHA) visits the Authority for
inspection and guidance on a regular basis. Also, the Authority maintains insurance
cover for Workman’s Compensation and Group Personal Accident aimed at providing
compensation to staff sustaining injuries in accidents.
18.0 GENDER PARITY
The total summary of employees as at the end of the year 2014/15 was 4,237 compared
to 4,047 in 2013/14. The distribution was 1,325 or 31.3% and 2,912 or 68.7% for female
and male respectively. Table 15 below indicates staff position as at 30th June, 2015.
Table 15: Staff Position as at 30th June 2015

S/NO DEPARTMENT FEMALE MALE TOTAL
1 Customs and Excise 361 1020 1,381
2 Domestic Revenue 583 1192 1,775
3 Finance 80 121 201
4 Human Resources and Administration 162 228 390
5 Information and Communication Technology 15 55 70
6 Internal Audit 7 18 25
7 Large Taxpayers 42 99 1411
8 Research and Policy 5 21 26
9 Board Secretariat and Legal Services 15 19 34
10 Tax Investigations 24 69 93
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DIRECTORS’ REPORT
18.0 GENDER PARITY (Continued)
S/NO DEPARTMENT FEMALE MALE TOTAL

11 Taxpayers Services and Education 18 29 47
12 Planning and Modernization 5 10 15
13 Internal Affairs 6 24 307
14 Commissioner General’s Office 2 7 9
TOTAL 1,325 2,912 4,237
Source: TRA Human Resources and Administration Department
Further, out of 4,237 staff, 120 staff are in decision making position (From Commissioner
General to Managers), 92 are males and 28 are females. Distribution of TRA management
team by age is as shown in Table 16 below.
Table 16: Management Distribution by age as at 30th June 2015

Position 30-40yrs 41-50yrs 51-60yrs Total
CG/DCG 1 1 2
Heads and Deputy Heads of 1 9 17 27
Departments
Managers 3 34 54 91
Total 4 44 72 120
Management distribution by age provided in Table 16 indicates that more that 50% of
managerial staff are aged over 50 years. Thus, TRA is in the process of developing and
implementing a comprehensive succession planning program. The program is focusing
on identification and development of a talent pool from internal staff with potential to fill
key managerial positions in the organization.
19.0 CORPORATE SOCIAL RESPONSIBILITY

TRA considers Corporate Social Responsibility (CSR) as one of the activities which
arouse public acceptance of the tax administration body in the society. Therefore, during
the period under review, TRA was involved in giving donations to schools that included
building materials for construction of class rooms, desks, Laboratory equipment, books
and stationaries in Dar es Salaam, Tanga, Mwanza, Kagera and Iringa Regions. TRA
also donates medical items to hospitals in Zanzibar (Mnazi mmoja Hospital), Iringa and
Temeke Hospitals. Further TRA provided donation to orphanage centres in Pemba,
Iringa, Ruvuma and Rukwa. Such payments amounted to TZS 444.89 million (2014:
TZS 143.36 million). All mentioned donations were aimed at public in general and there
were no political donations.
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DIRECTORS’ REPORT
20.0 ENVIRONMENTAL CONTROL PROGRAMME
The Authority monitors carefully its operations to ensure wastes generated by its
operational offices are properly managed and do not affect the environment. This is
achieved by ensuring that operational offices have proper facilities for waste management
in conformity with Gemba Kaizen principles.
21.0 SERIOUSLY PREJUDICIAL

During the year ended 30th June 2015 there was no serious prejudicial matters to be
reported.
22.0 ACCOUNTING POLICIES

A summary of key accounting policies is in Note 4 to the financial statements.
23.0 CAPITAL MANAGEMENT

Capital includes capital reserve, property, plant & equipment revaluation reserve,
retained earnings and deferred income, which stood at TZS 298,339.10 million (2014:
TZS 304,317.32 million). The primary objective of the Authority’s capital management
is to ensure that it maintains a strong asset base in order to support its objectives and
optimize achievement of stakeholders’ expectations. No changes were made in the
objectives during the year ended 30 June 2015.
24.0 RESOURCES
At the end of the year 2014/15, the Authority had 4,237 staff (2014: 4,047 staff). The
human capital comprised of competent staff in various operational areas. The position
provides the assurance to the Authority for attainment of its key strategic goals. Further,
at the end of the period under review, the Authority had sufficient funds to fulfil its financial
obligations. In addition, the Authority has reasonable expectation that the Government
of Tanzania and Development partners will avail the funds for financing the Authority’s
planned activities for 2015/16. In that regard, the Authority is considered to have adequate
resources to continue with its operations.
25.0 AUDITORS
The Controller and Auditor General is the statutory auditor of the Tanzania Revenue
Authority by virtue of Article 143 of the Constitution of the United Republic of Tanzania
as amplified under the Public Audit Act No.11 of 2008.

31st December, 2015
Mr Bernard S. Mchomvu Date
Chairman of the TRA Board
79
80
AUDITED REVENUE STATEMENTS
81
82
REPORT OF THE CONTROLLER AND AUDITOR GENERAL
THE UNITED REPUBLIC OF TANZANIA
NATIONAL AUDIT OFFICE
REPORT OF THE CONTROLLER AND AUDITOR GENERAL ON THE

REVENUE STATEMENTS OF
UNDER (VOTE 21) FOR THE YEAR
ENDED 30TH JUNE, 2015
The Controller and Auditor General,

National Audit Office, Samora Avenue/Ohio Street,
P.O. Box 9080,
Dar es Salaam.
Telegram: “Ukaguzi”
Telephone: 255 (022) 2115157/8,
Fax: 255 (022) 2117527
Website: www.nao.go.tz
DECEMBER, 2015 AR/TRA/VT.21/ 2014/2015
83
84
AUDIT REPORT ON THE REVENUE
STATEMENTS
To: Chairperson,
Board of Directors,
Tanzania Revenue Authority,
P.O. Box 11491,
Dar es Salaam.
REPORT OF THE CONTROLLER AND AUDITOR GENERAL ON THE REVENUE

STATEMENTS OF TANZANIA REVENUE AUTHORITY (TRA) FOR THE FINANCIAL YEAR
ENDED 30TH JUNE, 2015
I have audited the revenue statements of TRA comprising of the Statement of Revenue
Collections and Transfers, Statement of Comparison of Revenue Targets and Actual Collections,
Statement of Tax Exemptions and Rebates, Statement of Tax Deposits, Statement of Tax
Refunds, Statement of Customs Processing Fees and Notes to the Revenue Statements
shown as Annexure II of this report for the financial year ended 30th June 2015.
Management Responsibility for the Revenue Statements
The preparation of revenue statements is the responsibility of the management of the TRA as
per the Statement of Management’s Responsibility for the Revenue statements enclosed in this
report as Annexure I.
Sect. 25(4) of the Public Finance Act (PFA) No. 6 of 2001 (revised 2004), places responsibility
on the TRA Management to prepare revenue statements for each financial year, which give
a true and fair view of the collections and transfers of the reporting entity as at the end of the
financial year. It also, requires management to ensure that the reporting entity keeps proper
accounting records, which will disclose with reasonable accuracy its financial position and its
responsibility in safeguarding the assets.
The revenue statements should be prepared using appropriate accounting polices supported
by reasonable and prudent judgments and estimates, in conformity with International Public
Sector Accounting Standards (IPSAS) cash basis of accounting and in the manner required by
Sect 25(4) of the Public Finance Act, 2001 (revised 2004).
In addition, Reg. 28-35 of the Public Finance Regulations 2001 requires the Accounting Officer
and the organization’s management to establish an effective internal control system, internal
85
audit unit and audit committee appropriate to the circumstances of TRA.
Responsibilities of the Controller and Auditor General
My responsibility as auditor is to express an independent opinion on the revenue statements

based on the audit. I am also, required to satisfy myself that the revenues assessed by TRA
were properly collected and accounted for, whether the revenue statements have been kept in
accordance with the International Public Sector Accounting Standards (IPSAS) cash basis of
accounting.
According to Sect.10 (1) of the Public Audit Act No 11 of 2008, my specific responsibilities are to
examine, enquire into, audit and report on the revenue statements of TRA. In addition, Sect. 10
(2) of the PAA No. 11 of 2008 requires me to satisfy myself that the accounts have been kept in
accordance with IPSAS Cash Basis of Accounting; reasonable precautions have been taken to
safeguard the collection, accounting and transfers of revenue and that the laws, directions and
instructions applicable thereto have been duly observed.
Basis of opinion
I conducted the audit in accordance with International Standards on Auditing (ISA), International
standards of Supreme Audit Institutions (ISSAI) and such other audit procedures I considered
necessary in the circumstances. Those standards require that I comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance about whether the revenue
statements are free of material misstatement.
An audit involved performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. It also, includes assessing the accounting principles
used and significant estimates and judgments made by management, assessing whether the
internal control system and the accounting policies are appropriate to the circumstances of TRA
and that they have been consistently applied and adequately disclosed in the preparation of
the revenue statements, as well as evaluating the overall revenue statements presentation and
assessing the extent of compliance with the statutory requirements.
I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis
for my audit opinion.
Unqualified Opinion
In my opinion, the Revenue Statements present fairly, in all material respects, the results of
revenue collections by Tanzania Revenue Authority for the year ended 30th June, 2015 in
accordance with International Public Sector Accounting Standards (IPSAS) – cash basis of
accounting.
86
Report on Other Legal and Regulatory Requirements
Compliance with Procurement Legislation
In view of my responsibility on the Procurement Legislation, and taking into consideration

the procurement transactions I have reviewed as part of this audit. I state that the Tanzania
Revenue Authority has generally complied with the requirements of the PPA No.7 of 2011 and
its underlying Regulations of 2013.
10th March, 2016.
Copy: The Chief Secretary,

State House,
P.O. Box 9120,
1 Barrack Obama Road,
11400 DAR ES SALAAM.
Permanent Secretary and Paymaster General,

Ministry of Finance,
P.O. Box 9111,
1 Madaraka Street,
Permanent Secretary,
Prime Minister’s Office,
Regional Administration and Local Government,
P. O. Box 1392,
DAR ES SALAAM.
87
STATEMENT OF REVENUE COLLECTIONS AND TRANSFERS
2014/2015 2013/2014
Notes TZS TZS
Revenue Collections:
Tanzania Mainland
Domestic Revenue Department 2 1,918,954,405,547 1,696,417,109,556
Large Tax Payers Department 2 4,611,057,733,493 4,491,635,021,613
Customs and Excise Department 2 4,069,759,707,650 3,671,902,349,563
10,599,771,846,690 9,859,954,480,732
Add: Treasury Vouchers 2 29,459,350,217 30,015,567,704
2 10,629,231,196,906 9,889,970,048,437
Zanzibar
Domestic Revenue 2 56,003,184,806 49,073,697,012
Customs and Excise 2 87,989,744,483 87,614,478,978
143,992,929,289 136,688,175,990
Total Central Government Revenue 10,773,224,126,196 10,026,658,224,427
Property Rates Collections:
Ilala Tax Region 2,662,989,348
Kinondoni Tax Region 1,222,776,084
Temeke Tax Region 580,094,363
- 4,465,859,795
Grand Total Collections 10,773,224,126,196 10,031,124,084,222

Revenue Transfers:
Transfer to Central Government 3 9,325,305,560,116 8,623,912,297,077
Transfers to Government of Zanzibar 3 147,683,343,615 136,471,744,366
Transfer to Municipal Councils 3 - 5,604,404,931
Other Transfers 3 1,341,221,387,275 1,234,761,272,345
10,814,210,291,007 10,000,749,718,719
Increase (Decrease) in cash (40,986,164,811) 30,374,365,502
Cash at the beginning of the year 43,102,134,898 12,727,769,396
Cash at the end of the year 4&9 2,115,970,087 43,102,134,898
The revenue statements were approved by the Board of Directors for issue on 31st December, 2015
and were signed on its behalf by:
Name : Alphayo J. Kidata Title: Commissioner General Signature ______________
Name : Bernard S. Mchomvu Title: Chairman of TRA Board Signature
88
STATEMENT OF COMPARISON OF REVENUE TARGETS AND ACTUAL COLLECTIONS
NOTE Actual Collections Final Approved Original Proposed Difference

Amounts (A) Target (B) Target (A-B)
TZS TZS TZS TZS
Tanzania Mainland:
Domestic Revenue 1,918,954,405,547 2,064,560,400,000 2,070,856,200,000 (145,605,994,453)
Department
Large Tax Payers Department 4,611,057,733,493 5,489,128,300,000 5,108,089,300,000 (878,070,566,507)
Customs and Excise 4,069,759,707,650 4,358,269,900,000 4,506,838,100,000 (288,510,192,350)
Department
Gross Revenue 10,599,771,846,690 11,911,958,600,000 11,685,783,600,000 (1,312,186,753,310)
Less: Transfers VETA 5 56,480,666,236 56,480,666,236 56,480,666,236 -
Less: Refunds & Transfers to 8 653,933,741,825 636,915,300,000 631,915,600,000 17,018,441,825
ZRB
Total (Net of refunds) 9,889,357,438,629 11,218,562,633,764 10,997,387,333,764 (1,329,205,195,136)
Add: Treasury Vouchers 29,459,350,217 43,178,700,000 43,178,700,000 (13,719,349,783)
Net Incl. TVCs (Mainland) 9,918,816,788,845 11,261,741,333,764 11,040,566,033,764 (1,342,924,544,919)
Zanzibar: -

Domestic Revenue 2 56,003,184,806 55,502,900,000 55,502,900,000 500,284,806
Customs and Excises 87,989,744,483 110,553,000,000 110,553,000,000 (22,563,255,517)
Net Revenue (Zanzibar) 143,992,929,289 166,055,900,000 166,055,900,000 (22,062,970,711)
GRAND TOTAL 10,062,809,718,135 11,427,797,233,764 11,206,621,933,764 (1,364,987,515,630)
89
STATEMENT OF TAX EXEMPTIONS AND REBATES
2014/2015 2013/2014
Notes TZS TZS
Customs and Excise 6
DESCRIPTIONS
Customs and Excise
Government Institutions 10,907,901,968 10,464,177,448
Parastatal Organisations 200,013,292,660 151,320,063,168
Religious Institutions 157,703,067 409,131,392

Non-Governmental Organisations
(NGOs) 507,715,653 365,924,795
Foreign Embassies/UN 15,979,987,089 15,125,464,070
Military duty free shop 1,701,546,597 12,245,651,978
Donor Funded Projects (DFP) 118,969,312,689 124,305,103,132
Private Companies & Individuals 243,401,384,649 371,216,680,897
Mining Sector 30,727,191,173 30,827,470,628
Oil/Gas Exploration 117,838,127,034 103,195,828,832
Tanzania Investment Centre (TIC) 251,198,253,514 330,141,360,717
Total 991,402,416,092 1,149,616,857,056

Domestic Revenue
VAT relief granted under 3rd Schedule
-VAT Act Cap 148 635,609,504,822 684,480,503,300
Total 635,609,504,822 684,480,503,300
Grand Total 1,627,011,920,914 1,834,097,360,356
VAT relief granted under 3rd Schedule - VAT Act Cap 148 include Diplomats, NGO, Investors
and others
90
STATEMENT OF TAX DEPOSITS
2014/2015 2013/2014
Notes TZS TZS
At the beginning of the year 17,200,543,596 19,071,967,069

Less: Tax Deposits wrongly c/f (934,318,175)
Tax deposits added during the year 1,439,576,376,757 1,270,676,954,377
Total deposits 1,455,842,602,178 1,289,748,921,446

Less: Tax recognized during the year 1,288,654,205,808 1,269,584,905,563
Payments and Refunds 2,747,529,926 2,947,931,877
Other Payments 140,120,698,019 14,594,510
Charges 247,500 945,900
1,431,522,681,253 1,272,548,377,850
At the end of the year 7 24,319,920,925 17,200,543,596
91
STATEMENT OF TAX REFUNDS
2014/2015 2013/2014
Note TZS TZS
At the beginning of the year: 30,402,209 39,337,143

Add: Previous year adjustment per
BOT CBS 8,769,062 -
Add: Mining Companies Deposits for
VAT b/f 2,700,547,172 -
Adjusted Beginning Balance 8 2,739,718,443 39,337,143
Add: Funds received:
from the Government 8 636,915,666,807 491,996,381,215
from Mining companies (Escrow) 8 82,015,231,396 54,183,668,520
Total funds available for refunds 721,670,616,645 546,219,386,879
Less: Tax refunds made during the

year 8 653,933,741,825 546,188,984,669
Balance at the end of the year 8 67,736,874,820 30,402,209
92
STATEMENT OF CUSTOMS PROCESSING FEES
2014/2015 2013/2014
Note TZS TZS
At the beginning of the year 39,283,982,068 57,036,814,443
Add: Customs Processing fees
Transferred from Treasury- Dry cargo 48,175,508,242 40,944,535,757
Transferred from Treasury- Wet cargo 1,008,295,646 11,187,033,940
Interest earned net of w/tax 319,812,658 399,865,640
Taxes wrongly paid to PSI 15,833,175 14,980,825
Total Customs processing fees & Interest 88,803,431,789 109,583,230,605
Less: Transfers to TRA expenditure A/C 51,821,058,600 59,097,003,772
Transfer to REA * 1,008,295,646 11,187,033,940
Bank charges 204,000 230,000
Total Transfers 52,829,558,246 70,284,267,712
Balance at the end of the year 35,973,873,543 39,298,962,893
Less: Taxes wrongly paid to PSI A/C 15,833,175 14,980,825
Net amount of Customs Processing fees 35,958,040,368 39,283,982,068
*On 2nd August 2011, Government directed that customs processing fees collected by TRA
on petroleum products importation be remitted to Rural Energy Agency (REA). Effective from
July 2014, the Government changed the procedure by remitting the funds to REA directly
after receiving from TRA collections. However, on 31.7.2014 Permanent Secretary Treasury
mistakenly returned TZS.1, 008,295,646.25 to TRA. Consequently, TRA remitted the amount to
REA. The change of procedure caused huge change from the year 2013/14 to 2014/15
93
NOTES TO THE REVENUE STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
1.0 AUTHORITY INFORMATION, BASIS OF PREPARATION AND SIGNIFICANT
ACCOUNTING POLICIES
1.1 AUTHORITY INFORMATION
the Laws (Revised 2006) which came into effect on 7th August 1995.
The major functions of TRA are to:
(a) Assess, collect and account for Government Revenue;

(b) Administer effectively and efficiently all the revenue laws of the Central
Government;
(c) Advise the Government on all matters related to fiscal policy;
(d) Promote voluntary tax compliance;
(e) Improve the quality of services to the taxpayers;
(f) Counteract fraud and other forms of tax evasion; and
(g) Produce trade statistics and publications.
The overall Management of TRA is vested in the Board as the governing board under the
supervision of the Minister for Finance. The Commissioner General is responsible for the
day to day operations of the Authority.
The registered office of the Authority is situated on Plot No. 126, Sokoine Drive, Dar
es Salaam.
1.2 BASIS OF PREPARATION

The revenue statements have been prepared on a cash basis and presented in
Tanzanian Shilling (TZS). Based on the kind of business TRA is operating in the agency-
principle relationship with the Government. These statements have been modified so
as a statement of Cash receipts and payments is represented by statement of Revenue
Collections and transfers. Only single column comparison between years has been
indicated to cater for tax revenue collections and transfers.
1.3 STATEMENT OF COMPLIANCE

The revenue statements of TRA have been prepared in accordance with Cash Basis
IPSAS (Financial Reporting under the Cash Basis of Accounting) as issued by the
94
FOR THE YEAR ENDED 30 JUNE 2015 (Continued)
ACCOUNTING POLICIES (Continued)
1.3 STATEMENT OF COMPLIANCE (Continued)
International Public Sector Accounting Standards Board (IPSASB) and as stipulated by
the Public Finance Act, 2001(Revised 2004).
1.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1.4.1 Tax Revenue Collections
Tax revenue is the income gained by the Government through taxation. Taxes
are economic benefits compulsorily paid or payable to public sector entities,
in accordance with laws or regulation, established to provide revenue to the
government, excluding fines or other penalties imposed for breaches of laws or
regulation.
1.4.2 Functional and Presentation Currency
The Revenue statements items of the Authority are measured and presented
using the currency of the primary economic environment which is the Tanzanian
Shilling (TZS). This is the Authority’s functional and reporting currency.
1.4.3 Cash and Cash Equivalents
Cash and Cash Equivalents are stated in the Statement of Revenue Collections
and Transfers and Customs Processing Fees at cost. For the purposes of these
Statements, Cash is comprised of cash on hand and deposits held at call with
commercial banks. Cash Equivalents are short term deposits with original maturities
of three months or less.
1.4.4 Treasury Vouchers
Treasury Vouchers (TVCs) are the payment cheques/TISS instructions issued by

the Ministry of Finance (Treasury) to Tanzania Revenue Authority (TRA) for the
purpose of paying for tax exemptions issued to eligible entities/persons. Treasury
Voucher collections are recognised on receipt from Ministry of Finance.
1.4.5 Property Rates Collections
There is no data for property rates collections for the financial year 2014/2015
because the Government decided to return the mandate of collecting property
rates to Dar es Salaam Municipal councils with effect from February 2014.
95
1.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
1.4.6 Tax Revenue and Property Rate Transfers
Tax revenue transfers are remittance of the collected tax revenues held in TRA
Commissioners’ Account to the Paymaster General Account. Commercial banks
remit funds to TRA accounts at BOT three times a week on Monday, Wednesday
and Friday and at the last working day of the month. BOT transfers funds from
TRA accounts on daily basis to PMG accounts.
1.4.7 Tax Revenue Collections for Government of Zanzibar
The Authority collects Income Tax and Customs duties for Government of Zanzibar.
The collections are monitored through the people’s Bank of Zanzibar and Bank
of Tanzania Zanzibar Branch.
1.4.8 Revenue Recognition
Revenue is recognised on cash basis. The following types of revenue are being
collected by the Authority:
S/N Revenue Type Revenue Recognition

Point
1. Excise Duty Local On Receipt
2. Value Added Tax Local – Goods On Receipt
3. Value Added Tax Local – Services On Receipt
4. Value Added Tax – Others On Receipt
5. Motor Vehicle Taxes On Receipt
6. Corporate Taxes On Receipt
7. Individuals Income Taxes On Receipt
8. Pay As You Earn (PAYE) On Receipt
9. Skills and Development Levy (SDL) On Receipt
10. Withholding Taxes On Receipt
11. Import Duty On Receipt
12. Excise Duty on Imports On Receipt
13. Value Added Tax on Imports On Receipt
14. Fuel Levy On Receipt
15. Customs Processing Fees On Receipt
16. Petroleum Levy On Receipt
96
1.4.9 Customs Processing Fees
Customs processing fees are collected by the Authority by charging 0.6% of FOB
value for imports on dry cargo while TZS.4.8 per litre charged on wet cargo.
Fees for dry cargo were used for servicing customs activities while that of wet
cargo were remitted to Paymaster General for subsequent remittance to Rural
Energy Authority (REA).
1.4.10 Tax Deposits
Taxpayers with goods temporarily imported or on transit are required by law to

make payments upfront pending re-exportation or otherwise the exit of the goods
outside the country. In some cases, a taxpayer may apply to the Commissioner
for Customs to be allowed to clear goods entering the country before duties
are determined. In both cases, the taxpayer is required to deposit a certain
amount of money as cover for the import duties and other levies which will be
utilized at a later date once the actual duties are established. If a deposit has
remained unclaimed for one year or more after the taxpayer is cleared from all
the obligations associated with the deposit, such a deposit shall be treated as
revenue and shall be transferred to Commissioner’s Account.
1.4.11 Tax Exemptions and Rebates
Tax exemptions are reductions or eliminations of the taxes normally imposed on

individuals and organizations by the United Republic of Tanzania as provided for
by Laws. In order to be tax-exempt, an organization must meet certain criteria
that are specifically defined by the Authority (TRA).They are Waiver and Benefits
granted to taxpayers for payment of Import Duty, VAT, Excise Duty and Fuel levy
under the Tanzania Investment Act, the Mining Act, and relevant Government
Notices applicable to Religious and Charitable Organizations, Donor Funded
Projects and Investors.
Tax Exemptions are categorised by the Authority as follows;
1.4.11.1 Customs and Excise

(a) Government Institutions
(b) Parasternal Organisations
(c) Religious Institutions
(d) Non-Governmental Organisations (NGOs)
(e) Donor Funded Projects (DFP)
(f) Private Companies & Individuals
(g) Mining Sector
(h) Tanzania Investment Centre (TIC)
97
1.4.11 Tax Exemptions and Rebates (Continued)
1.4.11.1 Customs and Excise (Continued)
(i) Oil/Gas Exploration
(j) Military Duty Free Shops
(k) Foreign Embassies/UN
1.4.11.2 Domestic Revenue
(a) VAT Relief granted under the Third Schedule to the Value Added Tax Act
Cap 148
(b) Exemptions under Duty Free Shops
1.4.12 Comparative Figures

Figures for the previous revenue statements have been regrouped whenever
necessary in order to make them comparable with current year’s figures.
1.5 JUDGEMENTS
The preparation of the Authority’s Revenue Statements requires management to make
judgments that affect the reported amounts of revenues at the end of the reporting
period. In the process of applying the Authority’s accounting policies, management has
not made any significant judgments.
1.6 ESTIMATES AND ASSUMPTIONS

There are no assumptions concerning the future or other sources of estimating uncertainty
at the reporting date, that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial year.
1.7 RISK MANAGEMENT OBJECTIVES AND POLICIES

TRA operations are exposed to certain financial risks. Financial risk management focuses
on the unpredictability of financial markets and seeks to minimize potential adverse
effects on TRA’s financial performance. The main risks arising from the TRA’s operations
are currency risk, credit risk, liquidity risk and interest rate risk. TRA reviews and agrees
policies for managing each of these risks which are summarized below:
1.7.1 Currency Risk

Currency risk is the risk that the value of a financial instrument will fluctuate because of
changes in foreign exchange rates. TRA’s operations utilize various foreign currencies
and consequently, are exposed to exchange rate fluctuations that have an impact
on cash flows and financing activities. Currency exposure arising from liabilities
denominated in foreign currencies is managed primarily through the holding of bank
balances in the relevant foreign currencies.
98
1.7 RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued)
1.7.2 Liquidity Risk
ensure it is able to meet estimated outflow requirements. This is achieved through
prudent liquidity risk management which includes maintaining sufficient cash and
cash equivalents.
TRA’s main sources of income are the annual budget allocation from the Ministry
of Finance and Economic Affairs and other sources of income. The income is used
to fund TRA’s operational and capital requirements. The annual budget is allocated
by the Ministry in accordance with the provisions governing the Medium Term
Expenditure Framework (MTEF). TRA uses Activity Based Budgeting approach with
an extensive planning and governance process focused on the Corporate Plan to
determine its operational and capital requirements. This is considered to be adequate
mitigation for liquidity risk.
Payment of Refunds: The Authority depends on funds from the Treasury to pay out
the refunds to taxpayers. The amount of tax refunds received from Treasury during
the financial year was TZS 669,488,182,771. The delay in receiving funds, or funds
being unbudgeted, exposed the Authority to liquidity risk.
Remittances to Vocational Education and Training Authority (VETA) and High

Education Student Loan Board (HESLB):
The Authority collects Skills and Development Levy (SDL) which VETA and HESLB
are entitled for one third (1/3) and two third (2/3) respectively. During the financial
year 2014/15 TZS 56,480,666,236 was remitted to VETA, while the remaining
balance was remitted to the Treasury for subsequent payment to HESLB.
Remittances of VAT to Zanzibar Revenue Board (ZRB):

The Authority collects VAT paid on goods purchased in Mainland but consumed in
Zanzibar. The remittances were made to the Revolutionary Government of Zanzibar
on monthly basis. During 2014/15 TZS 33,213,527,844 of VAT was remitted.
1.7.3 Credit Risk
Credit risk is the risk that one party to a financial instrument will fail to discharge
an obligation and cause the other party to incur a financial loss. TRA is exposed to
credit-related losses in the event of non-performance by counterparties to financial
instruments.
99
1.8 RESTRICTIONS ON CASH BALANCES
Cash at the end of the year comprises of bank balances, cash on hand and cash in
transit as at 30th June 2015. These balances are the Tax revenue collections remaining
with commercial banks at year end. Strictly the balances are not used by the Authority
in any way; rather the funds are remitted to PMG as per requirement of TRA Financial
Regulations. Cash balance (revenue float) at the end of the year on 30th June 2015
was TZS 2,115,970,087. This float comprises of Mainland TZS. 2,087,238,082 which
were with various commercial banks and other collecting Agents national wide. Zanzibar
revenue float was TZS. 28,732,006 which remained with commercial bank. The above
revenue floats were all transferred to PMG Account in July 2015.
2014/2015 2013/2014
TZS TZS
2 OVERALL TAX COLLECTIONS
2.1 COLLECTIONS BY TAX TYPES:
2.1.1 MAINLAND
(a) Domestic Revenue Department
Excise Duty Local 50,872,549,636 33,344,956,294
VAT Local-Goods 54,431,948,227 49,569,688,317
VAT Local -Services 285,217,566,403 255,875,991,803
VAT- Others 103,319,600,912 62,198,847,190
Motor vehicle taxes 184,623,046,894 161,223,788,039
Departure charges 50,126,995,826 39,265,253,294

Corporate & Individuals Income
Taxes 390,032,984,409 371,985,946,846
PAYE 482,842,502,772 480,392,541,608
Skills and Development Levy 76,704,896,228 60,795,868,474
Withholding Taxes and others 240,782,314,240 181,764,227,692
1,918,954,405,547 1,696,417,109,556
Treasury Vouchers 7,896,871,152 6,754,271,239
1,926,851,276,699 1,703,171,380,795
100
2 OVERALL TAX COLLECTIONS (Continued)
2.1 COLLECTIONS BY TAX TYPES: (Continued)
2.1.1 MAINLAND (Continued)
2014/2015 2013/2014
TZS TZS
(b) Large Taxpayer Department
769,202,387,188
Excise Duty Local 707,871,751,260
359,020,194,682
VAT Local-Goods 312,783,208,178
549,898,165,230
VAT Local -Services 514,746,016,713
153,002,832,147
VAT- Others 121,700,945,487
Stamp duty 4,626,170,025 4,142,038,474
Departure charges 2,946,943,900 3,077,530,487
Corporate Income Taxes 929,058,165,502 1,190,060,555,578
PAYE 1,214,682,531,537 1,120,183,536,428
Skills and Development Levy 134,518,089,613 106,808,951,050
Withholding Taxes and others 494,102,253,669 410,260,487,960
SUB TOTAL 4,611,057,733,493 4,491,635,021,613

(c) Customs and Excises Department
Import Duty 744,692,330,445 704,774,556,514
Excise Duty on Imports 910,060,773,063 761,901,338,055
VAT on Imports 1,549,802,812,195 1,373,626,990,779
Fuel Levy 623,157,379,378 625,951,887,942
Customs processing fees 50,244,023,120 43,253,330,970

Energy Levy Customs processing
fees 14,490,017,175 14,585,182,487
Petroleum Levy 126,723,064,651 123,884,972,723

Export Levy 35,698,784,285 3,499,743,092
Others 14,890,523,339 20,424,347,000
4,069,759,707,650 3,671,902,349,563
Treasury Vouchers 21,562,479,065 23,261,296,465
Sub Total 4,091,322,186,715 3,695,163,646,028
Grand Total (Mainland) 10,629,231,196,906 9,889,970,048,437
101
2.1 COLLECTIONS BY TAX TYPES: (Continued)
2014/2015 2013/2014
2.1.2 ZANZIBAR TZS TZS
(d) Domestic Revenue Department
Corporate & Individuals Income
Taxes 16,177,041,736 13,068,111,969
Withholding taxes and others 4,537,035,189 3,704,233,122

PAYE and Skills and Development
Levy 35,289,107,881 32,301,351,921
56,003,184,806 49,073,697,012
(e) Customs and Excise Department
Import duty 33,449,569,840 33,771,831,301
Excise Duty on imports 10,333,910,072 10,894,051,454
VAT on Imports 38,831,467,954 38,250,528,521
Trade Levy 4,549,245,565 4,653,483,380
Others 825,551,052 44,584,323
Total 87,989,744,483 87,614,478,978
Grand Total (Zanzibar) 143,992,929,289 136,688,175,990
102
2.0 OVERALL TAX COLLECTIONS (Continued)
2.2 COLLECTIONS BY TAX REGIONS:
2014/2015 2013/2014
TZS TZS
No. Regions Domestic Revenue Large Taxpayer Customs Total Domestic Revenue Large Taxpayer Customs Total
1 Arusha 190,076,303,466 12,622,607,049 202,698,910,514 148,549,169,322 25,763,255,919 174,312,425,240
2 Coast 9,408,966,182 1,799,873,905 11,208,840,086 8,101,368,024 1,431,847,404 9,533,215,428
3 Dodoma 9,862,148,691 78,862,135 9,941,010,826 21,389,196,137 30,402,044 21,419,598,181
4 Iringa 21,596,290,619 157,891,964 21,754,182,582 28,487,722,079 216,330,485 28,704,052,564
5 Kagera 10,236,218,277 14,341,328,003 24,577,546,280 9,472,563,534 14,485,232,117 23,957,795,651
6 Kigoma 5,083,813,844 1,532,645,482 6,616,459,326 5,244,148,051 3,013,235,259 8,257,383,309
7 Kilimanjaro 23,332,274,627 27,255,804,180 50,588,078,808 28,713,583,188 31,561,169,436 60,274,752,624
8 Lindi 3,710,568,880 37,556,234 3,748,125,114 4,287,759,085 45,836,104 4,333,595,189
9 Mara 10,360,701,044 25,597,737,213 35,958,438,256 9,898,249,941 30,933,683,643 40,831,933,583
10 Mbeya 28,862,502,837 9,857,894,546 38,720,397,383 23,790,561,744 11,296,206,328 35,086,768,072
11 Morogoro 18,727,626,002 453,918,570 19,181,544,572 22,606,620,236 433,894,939 23,040,515,175
12 Mtwara 5,024,791,144 580,918,154 5,605,709,298 6,477,911,986 3,151,330,731 9,629,242,717

13 Mwanza 73,698,037,967 3,197,654,576 76,895,692,543 77,307,557,088 5,138,737,232 82,446,294,319
14 Ruvuma 5,168,472,059 95,617,422 5,264,089,480 5,195,885,151 103,714,833 5,299,599,984
15 Shinyanga 16,691,062,684 842,517,819 17,533,580,502 14,638,949,463 726,506,310 15,365,455,773
16 Singida 3,285,030,670 42,096,092 3,327,126,762 2,993,079,411 30,319,401 3,023,398,812
17 Tabora 8,396,230,869 15,505,183 8,411,736,051 11,723,724,960 1,667,991 11,725,392,951
18 Tanga 20,041,621,623 7,447,130,305 27,488,751,928 25,466,336,275 30,806,485,262 56,272,821,538
103
104
2.0 OVERALL TAX COLLECTIONS (Continued)
2.2 COLLECTIONS BY TAX REGIONS (Continued)
2014/2015 2013/2014
TZS TZS
No. Regions Domestic Revenue Large Taxpayer Customs Total Domestic Revenue Large Taxpayer Customs Total
19 Rukwa 5,702,144,409 159,501,769 5,861,646,178 4,646,078,518 313,058,204 4,959,136,722
20 Manyara 3,191,204,991 - 3,191,204,991 3,478,536,860 - 3,478,536,860
Sub-Total 472,456,010,882 - 106,117,060,599 578,573,071,482 462,469,001,053 - 159,482,913,638 621,951,914,693
1 Large Taxpayer 4,611,057,733,493 4,611,057,733,493 4,491,635,021,613 4,491,635,021,613

2 Ilala 741,403,593,281 741,403,593,281 649,102,774,999 649,102,774,999
3 Kinondoni 385,418,532,470 385,418,532,470 326,182,264,896 326,182,264,896
4 Temeke 190,316,848,163 190,316,848,163 163,127,237,605 163,127,237,605
5 Custom S. Centre 3,859,215,155,043 3,859,215,155,043 3,455,737,387,932 3,455,737,387,932
6 Motor Vehicle 116,475,407,170 116,475,407,170 88,095,958,243 88,095,958,243
7 Driving License 19,047,203,000 19,047,203,000 14,194,144,000 14,194,144,000
8 Central Acc. 502,020,310 502,020,310
9 JNIA 127,221,632,494 127,221,632,494 79,943,344,456 79,943,344,456
Sub-Total 1,453,163,604,395 4,611,057,733,493 3,986,436,787,537 10,050,658,125,425 1,240,702,379,742 4,491,635,021,613 3,535,680,732,388 9,268,018,133,744
Grand-Total 1,925,619,615,277 4,611,057,733,493 4,092,553,848,136 10,629,231,196,906 1,703,171,380,795 4,491,635,021,613 3,695,163,646,026 9,889,970,048,437

3 REVENUE TRANSFERS TO CENTRAL GOVERNMENT AND ZANZIBAR
(a) Tanzania Mainland 2014/2015 2013/2014

(i) Transfers to Central Government TZS TZS
Domestic Revenue Department 1,903,331,952,780 1,668,039,908,519
Large Tax Payers Department 4,611,057,733,493 4,492,375,902,934
Customs and Excise Department 3,449,495,887,653 3,001,903,502,031
Sub Total 9,963,885,573,925 9,162,319,313,485
(ai) Less: Transfer for Tax & Other Refunds 638,580,013,809 538,407,016,407 *
Net Transfers 9,325,305,560,116 8,623,912,297,077
(ii) Other transfers
620,626,142,131
Fuel Levy 623,088,918,000
587,472,951,375
Tax refunds and transfer to ZRB 491,996,381,215 *
5,466,099,435
Other refunds 2,931,554,192 *
48,175,508,242
Customs processing fees -Dry cargo 40,944,535,757 *
Customs processing fees -wet cargo REA 11,187,033,940
Transfers to Otignia 7,624,140,454
Transfer from VAT Mining 82,015,231,335 54,454,163,543

1,341,221,387,275 1,234,761,272,345
* In year 2013/14, total transfers to Central Government TZS 9,162,319,313,485 included tax
refunds, transfers to ZRB and customs processing fees for dry cargo totaling TZS 638,407,016,407.
However, for the purpose of providing more clarity and comparison with Central Government
reporting structure, tax refunds, transfers to ZRB and customs processing fees for dry cargo have
been reduced from transfers to Central Government category and reported separately under other
transfers category.
(b) Zanzibar
Domestic Revenue 57,703,950,591 48,508,907,907
Customs & Excise 89,979,393,024 87,962,836,459
147,683,343,615 136,471,744,366
(c) Transfers to Municipal Councils
-
Ilala Municipal Council 3,082,573,658
-
Kinondoni Municipal Council 1,764,098,569
-
Temeke Municipal Council 757,732,703
-
5,604,404,931
10,814,210,291,007 10,000,749,718,719
4 CASH AT THE END OF THE YEAR
2,024,971,914
Domestic Revenue 7,171,975,458
90,998,174 35,930,159,440
Customs & Excise
2,115,970,088 43,102,134,898
105
5 VETA FUNDS
5.1 FUNDS RECEIVED FROM TREASURY AND REMMITTED TO VETA
2014/2015 2013/2014
Month TZS TZS
July 3,968,600,333
August 4,795,033,333 3,953,466,667
September 10,652,166,667 8,828,778,333
October 9,560,052,811
November -
December 6,237,466,667 9,070,366,667

January 20,000,000 -
February 4,829,700,000
March 14,571,400,000
April -
May 34,775,999,569
June -
56,480,666,236 54,782,364,811 -
6 TAX EXEMPTION FOR MAINLAND AND

ZANZIBAR
MAINLAND ZANZIBAR TOTAL
Customs and Excise
Government Institutions 9,288,851,069 1,619,050,899 10,907,901,968
Parastatal Organisations 199,198,555,166 814,737,493 200,013,292,660
Religious Institutions 70,703,022 87,000,045 157,703,067

Non-Governmental
Organisations (NGOs) 446,749,233 60,966,420 507,715,653
Foreign Embassies/UN 15,357,327,068 622,660,021 15,979,987,089
Military duty free shop 1,699,185,913 2,360,684 1,701,546,597

Donor Funded Projects
(DFP) 118,873,116,460 96,196,229 118,969,312,689
Private Companies &
Individuals 235,609,041,994 7,792,342,655 243,401,384,649
Mining Sector 30,727,191,173 - 30,727,191,173
106
6 TAX EXEMPTION FOR MAINLAND AND ZANZIBAR (Continued)
MAINLAND ZANZIBAR TOTAL
Oil/Gas Exploration 117,838,127,034 - 117,838,127,034

Tanzania Investment Centre
(TIC) 245,725,804,708 5,472,448,806 251,198,253,514
TOTAL 974,834,652,840 16,567,763,252 991,402,416,092
Domestic Revenue -
VAT relief granted under 3rd
Schedule -VAT Act Cap 148 635,609,504,822 - 635,609,504,822
Sub Total 635,609,504,822 - 635,609,504,822
Grand Total 1,610,444,157,662 16,567,763,252 1,627,011,920,914
7 TAX DEPOSITS BALANCES 2014/2015 2013/2014

TZS TZS
REGIONS
Customs & Excise - Head Office
Fuel - Escrow Deposits 10,316,238,199 10,335,304,663
Fuel Deposits 9,047,487,905 695,149,953
Other Deposits - 934,318,175
Customs & Excise - DSM Service Centre 3,312,795,611 3,939,606,219
Kagera 13,709,313 76,650,316
Mwanza 27,167,837 535,000
Dodoma 192,752 5,000
Tanga 88,556,523 198,567,409
Kilimanjaro 106,979,196 108,406,672
Morogoro 5,513,400 5,093,400
Arusha 19,060,045 33,930,034
Mbeya 249,238,648 263,818,844
Mtwara 7,140,000 2,673,136
Shinyanga 50,000 9,000,000
Mara 609,931,516 215,417,699
Zanzibar 515,859,980 382,067,076
Total 24,319,920,926 17,200,543,596
107
108
8.0 TAX REFUNDS
8.1 TAX REFUNDS FROM TREASURY PAYMENTS
Month Opening Total Receipts Domestic Customs & Tax refunds Total Payments Closing Balance
Balance Revenue Excise Returned
TZS TZS TZS TZS TZS TZS
Jul-14 39,171,272 53,076,305,567 48,065,810,538 3,795,955,859 51,861,766,396 1,253,710,442
Aug-14 1,253,710,442 53,076,305,567 46,142,904,768 6,706,950,146 52,849,854,914 1,480,161,096
Sep-14 1,480,161,096 53,076,305,567 49,668,734,850 1,378,669,865 51,047,404,716 3,509,061,948
Oct-14 3,509,061,948 53,076,305,567 28,950,637,078 13,089,279,473 42,039,916,551 14,545,450,963

Nov-14 14,545,450,963 53,076,305,567 33,990,247,384 11,173,234,514 45,163,481,898 22,458,274,633
Dec-14 22,458,274,633 53,076,305,567 38,001,696,932 444,554,572 38,446,251,504 37,088,328,696
Jan-15 37,088,328,696 53,076,305,567 25,475,990,102 4,821,747,800 30,297,737,902 59,866,896,362
Feb-15 59,866,896,362 53,076,305,567 43,364,458,091 333,952,624 43,698,410,714 69,244,791,215
Mar-15 69,244,791,215 53,076,305,567 55,045,543,310 4,581,096,688 49,442,715,432 109,069,355,430 13,251,741,352
Apr-15 13,251,741,352 53,076,305,567 49,354,567,219 1,944,619,009 51,299,186,228 15,028,860,692
May-15 15,028,860,692 53,076,305,567 24,505,835,990 2,001,804,215 26,507,640,205 41,597,526,054
Jun-15 41,597,526,054 53,076,305,567 36,740,005,151 25,886,099,498 62,626,104,649 32,047,726,972
Sub total 636,915,666,807 479,306,431,413 76,157,964,262 49,442,715,432 604,907,111,107
Less: Tax Refunds returned 49,442,715,432
Net Receipts 587,472,951,375

8.0 TAX REFUNDS (Continued)
8.2 TAX REFUNDS THROUGH ESCROW ACCOUNT
RECEIPTS PAYMENTS
Opening
Month Balance Total Receipts Other Debits To Depositors Total Payments Closing Balance
Jul-14 2,700,547,172 4,270,316,372 - - 6,970,863,544
Aug-14 6,970,863,544 8,254,031,665 4,826,455,893 4,826,455,893 10,398,439,316
Sep-14 10,398,439,316 6,942,521,412 5,537,391,461 5,537,391,461 11,803,569,267
Oct-14 11,803,569,267 8,278,374,080 734,533,867 734,533,867 19,347,409,479
Nov-14 19,347,409,479 7,311,629,007 4,189,338,318 4,189,338,318 22,469,700,169
Dec-14 22,469,700,169 6,151,805,639 69,988,837 3,225,949,382 3,295,938,219 25,325,567,589
Jan-15 25,325,567,589 8,478,192,276 4,751,639,246 4,751,639,246 29,052,120,619
Feb-15 29,052,120,619 5,842,211,795 - - 34,894,332,414
Mar-15 34,894,332,414 5,647,844,159 8,289,798,786 8,289,798,786 32,252,377,787

Apr-15 32,252,377,787 5,977,906,333 - - 38,230,284,120
May-15 38,230,284,120 6,208,273,687 4,145,480,622 4,145,480,622 40,293,077,185
Jun-15 40,293,077,185 8,652,124,970 13,256,054,306 13,256,054,306 35,689,147,849
Sub total 82,015,231,396 69,988,837 48,956,641,882 49,026,630,719
G. TOTAL 2,739,718,443 669,488,182,771 479,376,420,250 125,114,606,143 653,933,741,825 67,736,874,821
109
110
9.0 REGIONAL CASH BALANCES
2014/2015 2013/2014
No. Region Domestic Revenue Customs & Total Domestic Customs & Total
Excise Revenue Excise
1 Dar es salaam* 1,498,245,738 28,972,920 1,527,218,657 5,357,617,471 33,934,830,622 39,292,448,093
2 Arusha 4,218,114 20,000 4,238,114 6,613,031 - 6,613,031
3 Manyara 22,000 - 22,000 - - -
4 Coast 494,396 - 494,396 - - -
5 Dodoma 22,000 - 22,000 - - -
6 Iringa 100,000 - 100,000 - (818,364) (818,364)
7 Kagera - 200 200 (2,959,941) (1,829,561) (4,789,502)
8 Kigoma ( 50,000) - (50,000) - - -
9 Kilimanjaro 5,929,351 50,315,478 56,244,829 7,620,264 91,102,127 98,722,391
10 Lindi 6,673,631 - 6,673,631 (300,000) - (300,000)
11 Mara 1,350,685 16,315,992 17,666,677 1,886,680 (3,046,242) (1,159,562)
12 Mbeya 634,956 525,398 1,160,354 8,948,131 (294,890) 8,653,241

13 Morogoro 20,744,932 - 20,744,932 - - -
14 Mtwara 98,476,629 (5,975,814) 92,500,815 - - -
15 Mwanza 7,405,680 22,000 7,427,680 (13,103,610) (3,566,470) (16,670,080)
16 Ruvuma - - - (20,448) - (20,448)
17 Shinyanga 352,478,171 - 352,478,171 (16,000) - (16,000)
18 Tabora 1,516 - 1,516 22,653 - 22,653
19 Tanga 268,710 22,000 290,710 246,710 - 246,710
20 Singida 3,400 - 3,400 (85,000) - (85,000)
21 Rukwa - - - 141,403 - 141,403
Sub Total 1,997,019,908 90,218,174 2,087,238,082 5,366,611,343 34,016,377,221 39,382,988,566
22 Zanzibar 27,952,006 780,000 28,732,006 1,805,364,113 1,913,782,219 3,719,146,332
Total 2,024,971,914 90,998,174 2,115,970,088 7,171,975,455 35,930,159,439 43,102,134,898
2014/2015 2013/2014
* DAR ES SALAAM TAX REVENUE FLOAT TZS TZS
BOT-Fuel Deposits transferred in July 2015 - 33,934,552,922
Head office of Commercial Banks 770,970,664 211,771,544
Tanzania Driving Licence Escrow Account 385,000 3,703,938,541
Other collecting Agents 467,383,731 300,487,279
Temeke 17,336,720 31,008,967
Ilala 225,301,980 1,042,012,249
Kinondoni 45,840,563 68,676,592
TOTAL 1,527,218,657 39,292,448,093
AUDITED FINANCIAL STATEMENTS
111
112
THE UNITED REPUBLIC OF TANZANIA
REPORT OF THE CONTROLLER AND AUDITOR GENERAL
NATIONAL AUDIT OFFICE
REPORT OF THE CONTROLLER AND AUDITOR GENERAL ON THE

FINANCIAL STATEMENTS OF TANZANIA REVENUE AUTHORITY
FOR THE YEAR ENDED 30TH JUNE, 2015
The Controller and Auditor General,

National Audit Office, Samora Avenue/Ohio Street,
P.O. Box 9080,
Tel: 255 (022) 2115157/8,
Fax: 255 (022) 2117527
Website: www.nao.go.tz
DAR ES SALAAM
DECEMBER, 2015
AR/TRA/EXP/2014/2015
113
114
AUDIT REPORT ON THE FINANCIAL STATEMENTS
To: Chairperson,
TRA Board of Directors,
P.O. Box 11491,
DAR ES SALAAM.
RE: REPORT OF THE CONTROLLER AND AUDITOR GENERAL ON THE FINANCIAL

STATEMENTS OF TANZANIA REVENUE AUTHORITY FOR YEAR ENDED 30TH
JUNE, 2015
Introduction
I have audited the Financial Statements of the Tanzania Revenue Authority (TRA) comprises
of the Statement of Financial Position, Statement of Financial Performance, Cash Flows
Statement, Statement of Changes in Net assets and Accounting Polices and Notes to the
Financial Statements for the year ended 30th June, 2015 as shown in Annexure I of this
report.
Management Responsibility for the Financial Statements

The preparation of the Financial Statements is the responsibility of the management of the TRA
as per the Statement of Management’s Responsibility on the Financial Statements enclosed in
this report as Annexure II.
Sect. 25(4) of the Public Finance Act No. 6 of 2001 (revised 2004) places responsibility on the
Accounting Officer to prepare Financial Statements f o r each financial year which presents
true and fair view of the financial position, financial performance and cash flows for the year
then ended. It also, requires management to ensure that the reporting entity keeps proper
accounting records, which will disclose with reasonable accuracy its financial position of the
reporting entity and its responsibility in safeguarding the assets of reporting entity.
Responsibilities of the Controller and Auditor General

My responsibility as auditor is to express an opinion on these Financial Statements based on
my audit. I conducted my audit in accordance with International Standards of Supreme Audit
Institutions and such other procedures I considered necessary in the circumstances. These
standards require that I comply with ethical requirements and plan and perform the audit to
obtain reasonable assurance about whether the Financial Statements are free of material
misstatement.
115
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor’s
judgment, including the assessment of risks of material misstatement of the Financial Statements,
whether due to fraud or error. In making those risk assessment, I considered the internal control
relevant to the Tanzania Revenue Authority’s preparation and fair presentation of Financial
Statements in order to design audit procedures that are appropriate in the circumstances, but
not for the purposes of expressing an opinion on the effectiveness of the Tanzania Revenue
Authority’s internal control. An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of accounting estimates made by management, as well
as evaluating the overall presentation of the Financial Statements.
In addition, Sect.10 (2) of the PAA No 11 of 2008 requires me to satisfy myself that the accounts
have been prepared in accordance with appropriate accounting standards.
Further, Section 44 (2) of the Public Procurement Act No. 7 of 2011 (Revised 2011) and
Regulation 269(1) of the Public Procurement Regulations of 2013 requires me to state in Annual
Audit Report whether or not the auditee has complied with the provisions of the law and its
Regulations.
I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis
for my audit opinion.
Unqualified opinion with emphasis of matter

In my opinion, the Financial Statements present fairly, in all material respects, the Financial
Position of Tanzania Revenue Authority as at 30th June 2015 and its Financial Performance and
Cash Flows for the year then ended in accordance with International Public Sector Accounting
Standards (IPSAS) Accrual Basis of Accounting.
Emphasis of matter
Without qualifying my opinion, I draw attention to the management on the following matter(s)
that relate to my responsibility in the audit of the Financial Statements: -
1. Non Revaluation of Intangible Assets;

Audit examination of the Intangible assets revealed some assets in this class being
presented in the financial statements with zero book value despite the fact that they are
116
still being used by the Authority in its operations especially for generation of tax revenues.
As a matter of emphasis I advise Revaluation of Intangible Assets with historical cost of
TZS.3,194,874,314 should be done.
2. Non Revaluation of Property, Plant and Equipment

Audit examination of Property, Plant and Equipment noted some items of assets in this
class being presented in the financial statements with zero book value despite the fact
that they are still being used by the Authority in its operations and for generation of tax
revenues. There were eighty nine (89) motor vehicles and sixty six (66) motor cycles with
historical cost of TZS.3,085,975,788. As a matter of emphasis I advise that Revaluation of
Property, Plant and Equipment should be done.
March, 2016
Copy to: The Chief Secretary,

State House,
P.O. Box 9120,
1 Barrack Obama Road,
Permanent Secretary and Paymaster General,

Ministry of Finance,
P.O. Box 9111,
1 Madaraka Street,
11468 DAR ES SALAAM
117
STATEMENT OF FINANCIAL POSITION
AS AT 30TH JUNE 2015
2014/2015 2013/2014
Notes TZS TZS
ASSETS
Current Assets
Cash and Cash Equivalents 12 72,567,345,311 72,689,733,237
Receivables 13 5,278,688,607 2,472,406,670
Inventories 14 1,848,009,301 1,412,422,228
Prepayments 15 9,314,865,292 466,281,366
89,008,908,511 77,040,843,502
Non-current Assets
Property, Plant and Equipment 10 207,725,007,196 221,437,987,542
Capital Works in Progress 10&11 4,007,586,096 1,655,562,138
Intangibles 11 18,514,042,781 18,295,116,726
230,246,636,073 241,388,666,406
Total Assets 319,255,544,584 318,429,509,907
LIABILITIES
Current Liabilities
Trade and other payables 16 20,916,446,839 14,112,192,128
20,916,446,839 14,112,192,128
Non-current Liabilities
Deferred Income 17 39,895,126,275 35,276,635,644
39,895,126,275 35,276,635,644
Total Liabilities 60,811,573,114 49,388,827,772
Net Assets 258,443,971,471 269,040,682,135
NET ASSETS/EQUITY
Capital Contributed by Government of United

18 21,723,364,802 21,723,364,802
Republic of Tanzania
Property, Plant & Equipment Revaluation Reserve 189,827,854,071 189,827,854,071
Accumulated Surplus 46,892,752,597 57,489,463,262

Total net assets/equity 258,443,971,471 269,040,682,135
The Financial statements were approved by the TRA Board for issue on 31st December 2015 and were
signed on its behalf by:
Name: Alphayo J. Kidata Title: Commissioner General : Signature ______________
Name: Bernard S. Mchomvu Title: Chairman of the TRA Board : Signature
118
STATEMENT OF FINANCIAL PERFOMANCE
2014/15 2013/14
Notes TZS TZS
Revenue
Revenue from non - exchange transactions
Income from the Government 160,280,500,000 173,880,500,000
Grants 19 11,224,636,649 10,361,460,723
171,505,136,649 184,241,960,723
Revenue from exchange transactions 20 70,972,528,189 70,802,243,252
Total Revenue 242,477,664,837 255,044,203,976
Expenses
Employees’ Benefits 21 142,788,615,840 136,255,154,220
Travelling 22 20,271,432,193 15,259,885,228
Fuel and Lubricants 23 4,016,258,583 3,541,469,473
Repairs and Maintenance 24 12,624,874,711 13,540,542,597
General Services and other expenses 25 46,640,449,403 32,436,366,506
Finance costs 26 4,872,302,402 5,229,405,022
Amortisation of Intangible Assets 11 4,891,720,483 4,430,745,576
Depreciation 10 18,662,066,324 18,570,313,529
Total Expenses 254,767,719,938 229,263,882,152
Other gains/(losses)
Gain of foreign exchange transactions 1,559,287,446 624,500,411
Gain/(Loss) on Disposal of Non-Current Assets 134,056,991 (44,142,288)
1,693,344,436 580,358,123
Surplus/(Loss) for the period (10,596,710,665) 26,360,679,947
Attributable to :
The Government of United Republic of Tanzania (10,596,710,665) 26,360,679,947
(10,596,710,665) 26,360,679,947
119
CASH FLOWS STATEMENT
2014/15 2013/14
Notes TZS TZS
Cash flows from Operating Activities:
Receipts
Income from Government 160,280,500,000 173,880,500,000
Revenue from exchange transaction 71,177,253,411 70,433,782,325
231,457,753,411 244,314,282,325
Payments
Employees’ benefits 143,441,231,048 136,431,270,410
Other payments 93,263,625,533 65,460,157,141
236,704,856,581 201,891,427,551
Net Cash from Operating Activities (5,247,103,170) 42,422,854,774
Cash flows from Investing Activities:
Acquisition of Property, Plant & Equipment (4,793,052,630) (12,872,090,180)
Acquisition of Intangible Assets (5,080,673,388) (6,867,556,136)
Additions to Works in Progress (2,695,873,465) (2,319,086,597)
Proceeds from sale of Property, Plant & Equipment 291,900,000 7,547,200
Net cash flows used in Investing Activities (12,277,699,483) (22,051,185,714)
Cash flows from Financing Activities
Deferred Income (Received) 15,843,127,280 10,677,772,841
Exchange loss 15,476
Net Cash used in Financing Activities 15,843,127,280 10,677,788,316
Net Increase in Cash and Cash Equivalents (1,681,675,373) 31,049,457,376
Cash and Cash Equivalents
At the Beginning of the Period 72,689,733,237 41,015,775,450
Effect of Exchange Rate Changes 1,559,287,446 624,500,411
Cash and Cash equivalent at 30th June 12 72,567,345,311 72,689,733,237
120
STATEMENT OF CHANGES IN NET ASSETS/EQUITY
Attributable to the Government of United Republic of Tanzania

Capital Revaluation Accumulated Surplus Total net assets/
Contributed by Reserve equity
Government of
United Republic
of Tanzania
TZS TZS TZS TZS
At 01 July 2013 21,723,364,802 189,827,854,071 31,128,783,315 242,680,002,188
Surplus during the year - - 26,360,679,947 26,360,679,947

Revaluation surplus
during the period - - - -
At 30 June 2014
21,723,364,802 189,827,854,071 57,489,463,262 269,040,682,135
At 01 July 2014 21,723,364,802 189,827,854,071 57,489,463,262 269,040,682,136

Loss during the year - - (10,596,710,665) (10,596,710,665)
At 30 June 2015 21,723,364,802 189,827,854,071 46,892,752,597 258,443,971,471
121
122
STATEMENT FOR COMPARISON OF TRA ACTUAL EXPENDITURES AND APPROVED BUDGET
The annual budget of TRA is prepared based on Activity Based Budgeting (ABB) approach. Under the ABB all planned activities for the realisation
of Authority’s strategic themes are costed and summed up in order to arrive at the annual expenditure budget. The annual budget presented is a
consolidated budget for the entire Authority and is classified based on the nature of expenses and covers the same period (1 July 2014 to 30 June
2015) as the financial statements. Further, TRA Financial Regulations allow TRA Management to reallocate approved budget from one activity/
code/centre to another within the approved budget. During the period under review, several activities were reviewed and consequently budgets
for the activities were reallocated from one code to another. This has resulted into differences between the original approved budget and final
approved budget. The actual expenditure for the period ended 30th June 2015 was TZS 243,783,532,615 (2014: TZS 228,321,555,961) against
the budget of TZS 335,969,892,886.41 million (2014 : TZS 289,451,812,314), thus resulting to a positive variance of TZS92,186,360,271 (2014:
TZS 61,130,256,354). Further, out of the approved budget, TZS 27,615.74 million that was supposed to be released by Treasury was not released.
Thus, some of the planned initiatives were not implemented as planned. The comparison of TRA actual expenditure against the approved budget
is shown below:
2014/2015

Description Original budget Final Approved Budget Actual Expenditure Variance
TZS TZS TZS

Employees’ Benefits 145,023,605,532 145,274,559,231 142,788,615,840 2,485,943,390
Travelling 25,846,501,594 27,733,394,250 20,271,432,193 7,461,962,058
Fuel and Lubricants 5,146,182,439 5,065,592,419 4,016,258,583 1,049,333,836
Repairs and Maintenance 18,728,003,693 19,069,414,034 12,624,874,711 6,444,539,323
General Services and other 20,823,422,623
68,412,538,848 67,463,872,026 46,640,449,403
expenses
Finance costs 3,247,412,400 3,862,544,507 4,872,302,402 (1,009,757,895)
Total Recurrent Expenditure 266,404,244,506 268,469,376,466 231,213,933,132 37,255,443,334
Capital Expenditure 69,565,648,381 67,500,516,421 12,569,599,483 54,930,916,938
Total Expenditure 335,969,892,886 335,969,892,886 243,783,532,615 92,186,360,271
STATEMENT FOR COMPARISON OF TRA ACTUAL EXPENDITURES
AND APPROVED BUDGET
Explanations for variances exceeding 5% of the total variance are provided below:
Travelling (TZS 7,461.96 million equivalent to 8.1% of total variance)

Out of unspent budget, TZS 2.4 billion resulted from partial / non implementation of the
projects under Tax modernization Programme which involved travelling. Projects involved relate
to trainings; implementation of filing of personal income returns by all employees; revision of
tax returns and filing procedure to simplify self-assessment; management of mining, oil and
gas taxation; revision of performance management system criteria for assigning weightages;
enhancement of forensic laboratories; development of investigation guide/ manual; assessment
of possibility of rebranding TRA; and establishment of Intelligence and Surveillance section
for conducting initial covert fraud investigation. The projects have been rolled over to 2015/16
and their respective funds. Further, the remaining unspent balance (TZS 5.1 billion) resulted
from partial/ non implementation of various activities under TRA funds. Following non receipt
of Government allocations as planned; some of the activities that involved travelling were not
implemented.
Repair and maintenance (TZS 6,444.54 million equivalent to 7.0% of total

variance)
The variance resulted mainly from partial utilization of budget set aside for repairs/maintenance
of buildings, motor vehicles, boats, scanners and electrical equipment. Further, the variance is
contributed by partial utilization of funds set aside for maintenance of drivers’ license system/
automatic finger prints identification system and enhancement of ICT data centre. Due to delays
in awarding of respective contacts, the projects were not fully implemented during the period
as initially planned.
General Service and other expenses (TZS 20,823.42 million equivalent to 22.6% of
total variance)
Out of unspent budget, TZS 12.8 billion resulted from partial / non implementation of the projects
under Tax modernization Programme. The unspent budget involved engagement of Consultants
for provision of technical assistance for conducting study on physical asset requirement,
performance and utilization; identification of skills gap and training needs of TRA operational
staff; introduction of a new integrated domestic tax administration system; conversion of tax
laws /manuals into electronic form; interface of key business operation system and Tanzania
Interbank
Settlement System; establishment of taxpayer advocacy services (Tax ombudsman);

development and implementation of Business Continuity Plan; Designing a new operating model
to drive convenience and efficiency; Designing and implementation of database for mining , oil
and gas ; interfacing IT systems with banks and other government departments/ agencies for tax
purposes; enhancement of forensic laboratories; Streamlining audit and investigation processes
to reduce objections; improvement of perception survey to include taxpayer loyalty; development
123
STATEMENT FOR COMPARISON OF TRA ACTUAL EXPENDITURES
AND APPROVED BUDGET
General Service and other expenses (Contined)
and implementation of programme for service culture plan; development and implementation
of succession planning program; designing and implementation of executive dashboard for
monitoring and evaluating strategy execution; designing and implementation of an integrated
enterprise application architecture; enhancement of ICT Data Centres, service delivery and
information security management; and enhancement of auditor’s skills in specialized areas.
Tenders for some of the projects were advertised and were responsive whereas others were not
responsive. This resulted into delays in implementation of the planned projects and consequently
non utilization of the budget as planned. The projects have been rolled over to 2015/16 and
their respective budgets. Further, the remaining unspent balance (TZS 7.8 billion) resulted
from partial/ non utilization of budget for various activities under TRA funds. Activities involved
relate to various trainings, engagement of Consultants for provision of technical assistance on
carrying out quality assurance review of the TRA’s Internal Audit functions; Co-source Internal
Audit Assignment; introduction of innovation management structure and framework. Also, the
variance is contributed by partial utilization of funds set aside for procurement of staff uniforms
and utilities /other necessary services for smooth running of the office.
Capital Expenditure (TZS 54,930.92 million equivalents to 59.6% of total

variance)
The variance resulted mainly from non-utilization of budget set for capital projects. The projects
relate to designing and implementation of integrated enterprise application architecture;
introduction of new integrated domestic tax administration system; enhancement of forensic
labs; establishment of a mechanism for management of diplomats exemptions; acquisition of
new TRA Headquarters building; construction of office/residential buildings; acquisition of land
for expansions of Institute of Tax Administration / TRA offices; and acquisition of vehicles for
official use. The projects are in different procurement/ implementation stages. Thus, budgets
for some projects and their respective funds have been rolled to financial year 2015/16.
Delays in acquisition of integrated domestic tax administration system affect administration of
domestic taxes administration whereas delays in delivery of motor vehicles affects tax collection
operations.
124
NOTES TO THE FINANCIAL STATEMENT
1.0 AUTHORITY INFORMATION
the Laws which came into effect on 7th August 1995.
The major functions of TRA are to:

i) Assess, collect and account for Central Government Revenue.
ii) Administer and enforce laws relating to revenue.
iii) Advice the Government and other relevant organs on all matters pertaining to fiscal
policy.
iv) Promote voluntary tax compliance to the highest degree possible.
v) Determine measures to be taken to counteract fraud and other forms of tax and other
fiscal evasions.
vi) Establish, maintain and apply a system for convenient and effectual identification of
taxpayers.
The overall Management of TRA is vested in the Board of Directors as the governing
board under the supervision of the Minister for Finance. The Commissioner General is
responsible for day to day operations of the Authority.
The registered office of the Authority is situated on Plot No. 126, Sokoine Drive, Dar
es Salaam.
2.0 BASIS OF PREPARATION

The financial statements have been prepared on a historical cost basis, except for
investment properties, land and buildings that have been measured at fair value. The
cash flows statement is prepared using the direct method. Financial statements are
prepared on an accrual basis. The financial statements are presented in Tanzanian
Shillings (TZS), which is the functional and reporting currency of TRA.
Statement of compliance
The financial statements of TRA have been prepared in accordance with and comply with
International Public Sector Accounting Standards (IPSAS) as issued by the International
Public Sector Accounting Standards Board (IPSASB).
3.0 CHANGES IN ACCOUNTING POLICY

New and amended standards and interpretations
The accounting policies adopted by the Authority are consistent with those of the
previous financial year except as follows:
125
3.0 CHANGES IN ACCOUNTING POLICY (Continued)
Amendments resulting from improvements to IPSAS to the following standards did not
have any impact on the accounting policies, financial position or performance of the
Authority.
• IPSAS 32 ‘Service Concession Arrangements : Grantor’

In October, 2011 IPSASB issued IPSAS 32. The standard focuses on addressing
a lack of guidance on how public entities should account for service concession
arrangements from a grantor’s perspective. It requires an entity that has previously
recognised service concession assets and related liabilities; revenue and expenses
to apply the standard retrospectively in accordance with IPSAS 3. Also, the standard
requires an entity that has not previously recognized service concession assets and
related liabilities, revenues and expenses to apply this standard either retrospectively
or prospectively using deemed cost from beginning of the earliest period for which
comparative information is presented in the financial statements. The amendment is
applicable for the periods commencing on or after 1 January 2014.
4.0 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
4.1 Foreign Currency Transactions and Balances

Functional and presentation currency
The financial statements items of the Authority are measured and presented using the
currency of the primary economic environment which is the Tanzanian Shillings (TZS).
This is the Authority’s functional and presentation currency.
Transactions and balances

Foreign currency transactions are translated to Tanzanian Shillings using the exchange
rates prevailing at the dates of the transactions. Monetary assets and liabilities are
translated into Tanzanian Shillings using the ruling rate at the Statement of Financial
Position date. Non-monetary items are translated using the rate at the date their
amount, cost or fair value was determined. Foreign exchange gains and losses resulting
from translation of foreign currencies are recognized in the Statement of Financial
Performance.
4.2 Cash and Cash Equivalents

Cash and Cash Equivalents are stated in the Statement of Financial Position at cost.
For the purposes of Statement of Cash flow, Cash is comprised of Cash on hand and
Deposits held at call with banks. Cash Equivalents are short term deposits with original
maturities of three months or less.
4.3 Inventories
Inventories are valued at cost or net realizable value/current replacement cost whichever
is lower. Cost is comprised of the purchase price of the inventories. Cost is determined
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4.3 Inventories (Continued)
using the weighted average method. Net realizable value is the estimated selling price less
costs to make the sale. However, where the inventories are specific to the Authority’s use
and they cannot be disposed to have a net realisable value, the replacement cost of the
inventories is used as the best available measure of the net realisable value. Inventories
are recognised as an expense when deployed for consumption in the ordinary course of
TRA’s operations. The Authority’s inventories at the Statement of Financial Position date
are comprised of stocks of stationery and other consumables that will be expensed in
the subsequent year.
4.4 Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will
flow to the Authority and the revenue can be reliably measured. Revenue is measured
at the fair value of the consideration received, excluding discounts, rebates, and sales
taxes or duty. The Authority assesses its revenue arrangements against specific criteria
in order to determine if it is acting as principal or agent. The following specific recognition
criteria must also be met before revenue is recognised:
Revenue from exchange transactions

Sale of goods
Revenue from the sale of goods is recognised when the significant risks and rewards of
ownership of the goods have passed to the buyer, usually on delivery of the goods.
Rendering of services
Revenues from tax consultants’ registration fees, destination inspection fees and external
stakeholders training fees are recognised as they are received.
Interest income
For all financial instruments measured at amortized cost and interest bearing financial
assets classified as available-for-sale, interest income or expense is recorded using
the effective interest rate (EIR), which is the rate that exactly discounts the estimated
future cash payments or receipts through the expected life of the financial instrument
or a shorter period, where appropriate, to the net carrying amount of the financial asset
or liability. Interest income is included as other income in the Statement of Financial
Performance.
Rental income
Rental income arising from operating leases on investment properties is accounted for
on a straight line basis over the lease terms.
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4.4 Revenue recognition (Continued)
Revenue from non –exchange transactions
Allocations from the Government

These are operational income of the Authority which is comprised of monthly cash
allocations from the Government based on previously approved Budgets.
Funds from Donors

These are income received from donors which are accounted for as they are received.
4.5 Grants
Grants are recognised where there is reasonable assurance that the grant will be
received and all attached conditions will be complied with. When the grant relates to an
expense item, it is recognised as income over the period necessary to match the grant
on a systematic basis to the costs that it is intended to compensate.
Where the grant relates to an asset, it is recognised as deferred income and released to
income in equal amounts over the expected useful life of the related asset.
Where the Authority receives non-monetary grants, the asset and the grant are recorded
at fair value of the asset on acquisition date and released to the Statement of financial
performance over the expected useful life of the relevant asset by equal annual
instalments.
4.6 Operating Leases
Authority as a lessee
Operating lease payments are recognised as an expense in the Statement of financial
performance on a straight line basis over the lease term. The Authority uses leased
properties in some places whereby it is required to pay rent to the property owners.
Authority as a lessor
Leases where the Authority does not transfer substantially all the risks and benefits of
ownership of the asset are classified as operating leases. The Authority owns landed
properties from which it conducts its business. In some locations the available premises
exceed the Authority’s requirement and so the excess space is rented out at market
rates. Rent received operating lease is recognised as income on straight – line basis
over the lease term. Contingent rents are recognised as revenue in the period in which
they are earned.
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4.7 Value Added Tax
Revenues, expenses and assets are recognised net of the amount of value added tax
except:
• Where the value added tax incurred on a purchase of assets or services is not
recoverable from the taxation authority, in which case the value added tax is
recognised as part of the cost of acquisition of the asset or as part of the expense
item as applicable; and
• Receivables and payables that are stated with the amount of value added tax
included. The net amount of value added tax recoverable from, or payable to, the
taxation authority is included as part of receivables or payables in the statement of
financial position.
4.8 Property, Plant and Equipment.
Property, Plant and Equipment are initially recorded at cost. Cost is the amount of cash
paid or the fair value of the other consideration given to acquire the asset at the time of its
acquisition or construction. Where an asset is acquired in a non-exchange transaction for
nil or nominal consideration the asset is initially measured at 0 its fair value. Subsequently,
Property, Plant and Equipment are accounted using Cost and Revaluation Model. Cost
Model is applied to land category and revaluation model applies to remaining items of
property, plant and equipment. Using revaluation model; the asset is carried at revalued
amount, being its fair value at the date of revaluation less subsequent accumulated
depreciation and accumulated impairment, if any. Fair value is determined by periodic
valuations of the Property, Plant and Equipment.
Any revaluation surplus is credited to the assets revaluation reserve included in the
equity section of the statement of financial position, except to the extent that it reverses
a revaluation decrease of the same asset previously recognized in the Statement of
Financial Performance, in which case the increase is recognised in the Statement of
Financial Performance. A revaluation deficit is recognized in the Statement of Financial
Performance, except to the extent that it offsets an existing surplus on the same asset
recognised in the asset revaluation reserve.
Accumulated depreciation as at the revaluation date is eliminated against the gross

carrying amount of the asset and the net amount is restated to the revalued amount of
the asset. Upon disposal, revaluation reserve relating to the particular asset being sold is
transferred to retained earnings.
Depreciation is calculated on a straight line basis over the estimated useful life of the
assets. Management has determined the estimated useful life of the following categories
of Property, Plant and Equipment to be as follows:
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4.8 Property, Plant and Equipment (Continued)
Category of Property Plant and Equipment Estimated
Useful Life
Office buildings 30-40 years
Residential Buildings 30-40 years
Plant & Machinery, Motor Vehicle/Cycles and Boats & Crafts 4-10 years
Computers, Furniture & Fixtures, Equipment, Office Machinery 4-5 years
Land is not depreciated
Expenditure for repairs and maintenance of Property, Plant and Equipment are charged
to Statement of Financial Performance in the financial period in which they are incurred.
However, the costs of major repairs are included in the respective asset’s carrying
amount.
An item of property, plant and equipment and any significant part initially recognized is
derecognized upon disposal or when no future economic benefits are expected from its
use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the
difference between the net disposal proceeds and the carrying amount of the asset) is
included in the Statement of Financial Performance when the asset is derecognized. The
assets’ residual values, useful lives and methods of depreciation are reviewed at each
financial year end, and adjusted prospectively, if appropriate.
4.9 Intangible Assets

Intangible assets acquired separately are measured on initial recognition at cost. Where
intangible assets are acquired in non-exchange transactions, the cost is their fair value at
the date of the exchange. Following initial recognition, intangible assets are carried at cost
less any accumulated amortization and any accumulated impairment losses. Internally
generated intangible assets, excluding capitalized development costs, are not capitalized
and expenditure is reflected in the Statement of Financial Performance in the year in
which the expenditure is incurred. Intangible assets comprise of costs that are directly
associated with identifiable and unique computer software products that TRA controls.
The useful lives of intangible assets are assessed as finite. Intangible assets with finite
lives are amortized over the useful economic life and assessed for impairment whenever
there is an indication that the intangible asset may be impaired. The amortization period
and the amortization method for an intangible asset with a finite useful life are reviewed
at least at each financial year end. Changes in the expected useful life or the expected
pattern of consumption of future economic benefits embodied in the asset is accounted
for by changing the amortization period or method, as appropriate, and are treated as
changes in accounting estimates.
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4.9 Intangible Assets (Continued)
The amortization expense on intangible assets with finite lives with useful life of four
years is recognized in the Statement of Financial Performance in the expense category
consistent with the function of the intangible asset. Intangible assets are amortized and
recognized in the Statement of Financial Performance using the straight line method over
estimated useful lives.
Gains or losses arising from de-recognition of an intangible asset are measured as the
difference between the net disposal proceeds and the carrying amount of the asset and are
recognized in the Statement of Financial Performance when the asset is derecognized.
4.10 Non-current assets held for sale
Non-current assets classified as held for sale are measured at the lower of carrying
amount and fair value less costs to sell. Non-current assets are classified as held for
sale if their carrying amounts will be recovered through a sale transaction rather than
through continuing use. This condition is regarded as met only when the sale is highly
probable and the asset or disposal group is available for immediate sale in its present
condition. Management must be committed to the sale, which should be expected to
qualify for recognition as a completed sale within one year from the date of classification.
Property, plant and equipment and intangible assets once classified as held for sale are
not depreciated or amortized.
4.11 Related Parties
Related parties are those who have the ability, authority and responsibility for planning,
directing and controlling the activities of Tanzania Revenue Authority (TRA) or exercise
significant influence in making financial and operating decisions. These are Key
Management Personnel, involving members of the Board of Directors, Senior Management
and their Deputies. Related party transaction is a transfer of resources or obligations
between related parties.
4.12 Impairment of Non – Financial Assets
Assets are reviewed for impairment losses whenever events or changes in circumstances
indicate that the carrying amount may not be recovered. An impairment loss is recognized
for the amount by which the carrying amount of the assets exceeds its recoverable amount.
Impairment losses are recognised in the Statement of Financial Performance in the period
in which they are incurred.
An assessment is made at each reporting date as to whether there is any indication that
previously recognised impairment losses may no longer exist or may have decreased.
If such indication exists, the Authority estimates the asset’s recoverable amount. A
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4.12 Impairment of Non – Financial Assets (Continued)
previously recognised impairment loss is reversed only if there has been a change in the
assumptions used to determine the asset’s recoverable amount since the last impairment
loss was recognized. The reversal is limited so that the carrying amount of the asset does
not exceed its recoverable amount, nor exceed the carrying amount that would have been
determined, net of depreciation, had no impairment loss been recognized for the asset
in prior years. Such reversal is recognized in the Statement of Financial Performance
unless the asset is carried at a revalued amount, in which case the reversal is treated as
a revaluation increase.
4.13 Trade and other Payables
Trade and other payables are initially recorded at fair value net of directly attributable
transaction costs. After initial recognition, trade and other are subsequently measured
at amortised cost using Effective Interest Rate (EIR) method. Gains and losses are
recognized in Statement of Financial Performance when the liabilities are derecognized
as well as through the EIR amortization process. Amortized cost is calculated by taking
into account any discount or premium on acquisition and fees or costs that are integral
part of the EIR. The EIR amortization is included as finance costs in the Statement of
Financial Performance.
4.14 Receivables
Receivables are non-derivative financial assets with fixed or determinable payments that
are not quoted in an active market and are initially recorded at fair value. After initial
measurement, such financial assets are subsequently measured at amortized cost using
the Effective Interest Rate method (EIR), less impairment. Amortized cost is calculated by
taking into account any discount or premium on acquisition and fee or costs that are an
integral part of the EIR. The EIR amortization is included as other income in the Statement
of Financial Performance. The losses arising from impairment are recognized in the
statement of Statement of Financial Performance under finance costs.
4.15 Non-Current Assets Replacement Reserve
The support of the Government of United Republic of Tanzania, World Bank and
Development Partners who provide funds to the Authority for acquisition and replacement
of assets is for a specific period of time. As a result, there was a need for the Authority
to have a comprehensive Non-Current Assets Replacement Strategy. This led to the
establishment of the Assets Replacement Fund to provide the Authority with the ability
to replace worn out assets and rehabilitate and maintain existing ones. The funds are
provided by the Government of United Republic of Tanzania through annual allocations
and are utilized against comprehensive annual procurement plans.
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4.16 Impairment of financial assets
The Authority assesses at each reporting date whether there is any objective evidence
that a financial asset or a group of financial assets is impaired. A financial asset or a group
of financial assets is deemed to be impaired if, and only if, there is objective evidence of
impairment as a result of one or more events that has occurred after the initial recognition
of the asset (an incurred ‘loss event’) and that loss event has an impact on the estimated
future cash flows of the financial asset or the group of financial assets that can be reliably
estimated. Evidence of impairment may include indications that the debtors or a group
of debtors is experiencing significant financial difficulty, default or delinquency in interest
or principal payments, the probability that they will enter bankruptcy or other financial
reorganisation and where observable data indicate that there is a measurable decrease in
the estimated future cash flows, such as changes in arrears or economic conditions that
correlate with defaults.
4.17 Revaluation Reserve
This is the revaluation surplus from the revaluation of property, plant and equipment. Upon
disposal, revaluation reserve relating to the particular asset being sold is transferred to
retained earnings.
4.18 Employee Benefits
Short Term Benefits - Salaries and Wages

Salaries and wages for current employees are recognised in the Statement of Financial
Performance as the employees’ services are rendered.
Post-Employment Benefits - Defined Contribution Plan

The employees of the Authority are members of the Parastatal Pensions Fund (PPF)
National Social Security Fund (NSSF), Zanzibar Social Security Fund (ZSSF), Government
Employees Pension Fund (GEPF), Local Authority Pension Fund (LAPF) or Public
Service Pension Fund (PSPF). These Funds are state owned and are responsible for all
staff pension benefits on retirement. The employees contribute 5% to 10% of their basic
salaries on a monthly basis while the Authority contributes 10% to 15% of the employees’
basic salaries to the Funds. The Authority’s contributions are charged to the Statement of
Financial Performance as an expense.
Other Long - Term Employment Benefits

The Authority operates un-funded Gratuity Payments Plan for its Senior Management
staff who are employed on fixed contract terms. The contract terms range between three
and five years. These benefits are paid at the end of the beneficiaries’ contracts using the
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4.18 Employee Benefits (Continued)
normal operational funds of the Authority. This expense is recognized in the Statement of
Financial Performance as and when it is incurred.
Termination Benefits
Termination benefits are payable when employment is terminated before the normal
retirement date for various reasons. This expense is recognized in the Statement of
Financial Performance as and when it is incurred.
4.19 Comparative Figures
Figures for the previous financial statements have been regrouped whenever necessary
in order to make them comparable with current year’s figures.
4.20 Budget information
The annual budget of TRA is prepared based on Activity Based Budgeting (ABB) approach.
Under the ABB all planned activities for the realisation of Authority’s Strategic Themes are
costed and summed up in order to arrive at the annual expenditure budget. The annual
budget presented in the financial statements is a consolidated budget for the entire
Authority.
5.0 SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS
The preparation of the Authority’s financial statements requires management to make

judgments, estimates and assumptions that affect the reported amounts of revenues,
expenses, assets and liabilities, and the disclosure of contingent liabilities, at the end
of the reporting period. However, uncertainty about these assumptions and estimates
could result in outcomes that require a material adjustment to the carrying amount of the
asset or liability affected in future periods.
Judgments
In the process of applying the Authority’s accounting policies, management has made
the following judgment, which has most significant effect on the amounts recognized in
the financial statements:
Operating lease commitments–Authority as lessor

The Authority has entered into commercial property leases on its investment property
portfolio. The Authority has determined, based on an evaluation of the terms and
conditions of the arrangements, that it retains all the significant risks and rewards of
ownership of these properties and accounts for the contracts as operating leases.
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5.0 SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS
(Continued)
Judgments (Continued)
Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty
at the reporting date, that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial year are discussed
below.
Revaluation of property, plant and equipment

The Authority carries its investment properties at fair value, with changes in fair value
being recognised in the Statement of Financial Perfomance. In addition, it measures
Property, Plant and Equipment (except) at revalued amounts with changes in fair value
being recognised in the statement of changes in equity. For the investment property the
valuer used a valuation technique based on a discounted cash flow model as there is a
lack of comparable market data because of the nature of the property. The determined
fair value of the investment properties is most sensitive to the estimated yield as well as
the long term vacancy rate. The current value of revalued property, plant and equipment
as at 30 June, 2015 was TZS 207,725.01 million (2014: TZS 221,437.99 million)
Impairment of non-financial assets

Impairment exists when the carrying value of an asset or cash generating unit exceeds
its recoverable amount, which is the higher of its fair value less costs to sell and its value
in use. The fair value less costs to sell calculation is based on available data from binding
sales transactions in an arm’s length transaction of similar assets or observable market
prices less incremental costs for disposing of the asset. The value in use calculation is
based on a discounted cash flow model.
The cash flows are derived from the budget for the next five years and do not include
restructuring activities that the Authority is not yet committed to or significant future
investments that will enhance the asset’s performance of the cash generating unit
being tested. The recoverable amount is most sensitive to the discount rate used for
the discounted cash flow model as well as the expected future cash inflows and the
growth rate used for extrapolation purposes. The impairment of non-financial assets is
explained further in Note 4. The current value of impaired non-financial assets as at 30
June 2015 was NIL (2014: NIL).
Fair value of financial instruments

Where the fair value of financial assets and financial liabilities recorded in the statement
of financial position cannot be derived from active markets, they are determined using
valuation techniques including the discounted cash flows model. The inputs to these
models are taken from observable markets where possible, but where this is not
feasible, a degree of judgment is required in establishing fair values. The judgments
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5.0 SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND
ASSUMPTIONS (Continued)
Estimates and assumptions (Continued)
include considerations of inputs such as liquidity risk, credit risk and volatility. Changes
in assumptions about these factors could affect the reported fair value of financial
instruments. The fair value of financial instruments is explained further in Note 8.
6.0 STANDARDS, AMENDMENTS AND INTERPRETATIONS ISSUED BUT NOT

YET EFFECTIVE
The following new standards, amendments and interpretations were issued by International
Public Sector Accounting Standards Board (IPSASB) but not yet effective up to the date
of issuance of the Authority’s financial statements. The Authority will adopt them for the
purpose of the preparation of the future financial statements, where applicable. Further,
the Authority does not currently plan to early adopt them.
IPSAS 33 ‘First-time Adoption of Accrual Basis IPSASs’

In January 2015, IPSASB released IPSAS 33. The standard addresses the transition
from either a cash basis, or an accrual basis under another reporting framework, or a
modified version of either the cash or accrual basis of accounting. Consequently, the
IPSASB states that the new IPSAS is not aimed at IFRS convergence. The standard
grants transitional exemptions to entities adopting accrual basis IPSASs for the first
time, providing a major tool to help entities along their journey to implement IPSASs. It
allows first-time adopters three years to recognize specified assets and liabilities. This
provision allows sufficient time to develop reliable models for recognizing and measuring
assets and liabilities during the transition period. It addresses situations when reliable
historical cost information about assets and liabilities is not available. It also addresses
the presentation of comparative information in transitional IPSAS financial statements
and an entity’s first IPSAS-compliant financial statements. Using these comprehensive
principles will ensure that an entity’s first financial statements using accrual basis IPSASs
contain high-quality information and can be generated at a cost that does not exceed
the benefits. The standard shall be applied if first-time adopter’s first IPSAS financial
statements are for a period beginning on or after 1 January 2017. Earlier application is
permitted. The standard will have no impact on the financial statements of the Authority.
IPSAS 34 ‘Separate Financial Statements’
In January 2015, IPSASB released IPSAS 34. The standard prescribes accounting
and disclosure requirements for investments in controlled entities, joint ventures and
associates when an entity prepares separate financial statements. The standard is
effective from periods commencing on or after 1 January 2017.The standard will have
no impact on the financial statements of the Authority.
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6.0 STANDARDS, AMENDMENTS AND INTERPRETATIONS ISSUED BUT NOT YET

EFFECTIVE (Continued)
IPSAS 35 ‘Consolidated Financial Statements’
In January 2015, IPSASB released IPSAS 35 which supersedes the requirements in
IPSAS 6 regarding consolidated financial statements. The standard still requires that
control be assessed having regard to benefits and power, but the definition of control
has changed and the standard now provides considerably more guidance on assessing
control. The definition of control focuses on an entity’s ability to influence the nature and
amount of benefits through its power over another entity. Also, the standard introduces
the concept of “investment entities,” which may be applicable to some sovereign wealth
funds. In contrast with IPSAS 6, Consolidated and Separate Financial Statements, IPSAS
35 no longer permits an exemption from consolidation for temporarily controlled entities.
The standard is effective from periods commencing on or after 1st January 2017.The
standard will have no impact on the financial statements of the Authority.
IPSAS 36 ‘Investments in Associates and Joint Ventures’
In January 2015, IPSASB released IPSAS 36. The standard explains the application of
the equity method of accounting, which is used to account for investments in associates
and joint ventures. Its requirements are fairly close to IPSAS 7, although the name was
changed to reflect mandatory nature of the equity method in case of joint entities. Unlike
the previous standard, the new one doesn’t permit different accounting methods for
temporary investments. The standard is effective from periods commencing on or after
1 January 2017.The standard will have no impact on the financial statements of the
Authority.
IPSAS 37 ‘Joint Arrangements’

In January 2015, IPSASB released IPSAS 37. The standard defines joint control and
establishes requirements for classifying joint arrangements and accounting for those
different types of joint arrangements. Joint arrangements are classified as either joint
operations or joint ventures. In a joint operation, the parties to the arrangement have
rights to the assets and obligations for the liabilities relating to the arrangement. In a joint
venture, the parties to the arrangement have rights to the net assets of the arrangement.
These classifications differ from IPSAS 8, which referred to three types of arrangements
(jointly controlled entities, jointly controlled operations, and jointly controlled assets). The
standard requires that an entity account for its interest in a joint operation by recognizing
its share of the assets, liabilities, revenue, and expenses of the joint arrangement. It also
requires that joint ventures be accounted for using the equity method. Previously, IPSAS
8 permitted jointly controlled entities to be accounted for using either the equity method
or proportionate consolidation. The standard is effective from periods commencing on or
after 1st January 2017.The standard will have no impact on the financial statements of
the Authority.
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6.0 STANDARDS, AMENDMENTS AND INTERPRETATIONS ISSUED BUT NOT YET
EFFECTIVE (Continued)
IPSAS 38 ‘Disclosure of Interests in Other Entities’
In January 2015, IPSASB released IPSAS 38. The objective of this standard is to require
entity to disclose information that enables users of its financial statements to evaluate:
• The nature of, and risk associate with its interest in controlled entities, unconsolidated
entities, joint arrangements and associates, and structured entities that are not
consolidated.
• The effects of those interests on its financial position, financial performance and
cash flows
The standard brings together the disclosures previously included in IPSASs 6–8. It also
introduces new disclosure requirements, including those related to structured entities
that are not consolidated and controlling interests acquired with the intention of disposal.
The standard is effective from periods commencing on or after 1 January 2017.The
standard will have no impact on the financial statements of the Authority.
7.0 RISK MANAGEMENT OBJECTIVES AND POLICIES

TRA operations are exposed to certain financial risks. Financial risk management focuses
on the unpredictability of financial markets and seeks to minimize potential adverse effects
on TRA’s financial performance. The main risks arising from the TRA’s operations are
credit risk, liquidity risk and currency risk. TRA reviews and agrees policies for managing
each of these risks which are summarized below:
i) Credit Risk
Credit risk is the risk that one party to a financial instrument will fail to discharge an
obligation and cause the other party to incur a financial loss. TRA is exposed to credit-
related losses in the event of non-performance by counterparties to financial instruments.
However, TRA does not regard there to be any significant concentration of credit risk.
TRA mitigates the credit risk by maintaining cash and cash equivalents with reputable
financial institutions; and recovering staff debts in terms of the applicable regulations
directly from the employee’s salary and/or pension.
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i) Credit Risk (Continued)
The maximum exposure to credit risk at the reporting date is as shown in the table
below.
2015 2014
TZS TZS
Financial Assets
Receivables 5,278,688,607 2,472,406,670
Cash and Cash Equivalents 72,567,345,311 72,689,733,237
Financial Liabilities
Trade and other payables 20,916,446,839 14,112,192,128
The Authority evaluates the concentration of risk with respect to trade receivables as
low.
Receivables
The age analysis of receivables is as shown below:
30th June 2015 (Amount in TZS ‘000)

Neither Past
due nor
impaired Past due but not impaired
Under 31 - 60 61 - 90 91-120 121 - 150 Over 150
Total 30 Days Days Days Days Days Days
Motor Vehicle Loans 189,126 - 71,249 47,349 140 19,577 50,810

Staff Advances 134,825 - 33,570 3,931 6,752 - 90,572
Staff Imprest 1,416,881 113,810 542,106 107,064 108,730 64,550 480,621
Sundry Debtors 1,244,325 33,585 1,064,051 31,930 11,614 13,853 89,293
Rent Receivable 312,521 103,477 - - - - 209,045
Staff Debtors- 139,833 - 40,904 16,483 2,195 14,449 65,802
Medical Expenses
Staff Debtors- 39,598 26,089.94 - - - - 13,508
Telephone Expenses
Student Debtors 148,305 - 1,373 1,527 2,983 2,206 140,217
Tax Stamp Debtors - 595,615 - 418,057 30,327 20,314 521 126,395
Interest Receivable 34,573 -457 - - 23,712 - 11,318
Deposits 1,023,087 - - - - - 1,023,087
5,278,689 276,504 2,171,310 238,611 176,440 115,156 2,300,668
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i) Credit Risk (Continued)
30 JUNE 2014 (Amounts in TZS ‘000)

Neither Past due Past due but not impaired
nor impaired
Under 31 - 60 61 - 90 91-120 121 - 150 Over 150

Motor Vehicle
78,494 - - - - - 78,494
Loans
Staff Advances 12,415 - 1,560 - 10,072 - 783
Staff Loans 10,672 1,000 1,490 - 350 1,335 6,497
Staff Imprest 366,208 184,010 33,433 12,739 38,985 6,453 90,587
Sundry Debtors 162,295 152,046 1,000 - - - 9,248
Rent Receivable 576,849 - - - - - 576,849
Staff Debtors- 52,302 32,905 3,595 3,770 - 391.00 11,641
Medical Expenses
Staff Debtors-
Telephone 18,853 18,635 - - - - 218
Expenses
Student Debtors 131,000 85,392 - 4,725 - 37,523.10 3,360
Deposits 1,063,319 - - 10,017 - 1,053,302
2,472,407 473,987 41,079 21,234 59,424 45,702 1,830,979
ii) Liquidity Risk
ensure it is able to meet estimated expenditure requirements. This is achieved through
prudent liquidity risk management which includes maintaining sufficient cash and cash
equivalents.
TRA’s main sources of income are the annual budget allocation from the Ministry of
Finance and other sources of income. The income is used to fund TRA’s operational and
capital requirements. The annual budget is allocated by the Ministry in accordance with
the provisions governing the Medium Term Expenditure Framework (MTEF). TRA uses
Activity Based Budgeting approach with an extensive planning and governance process
focused on the Corporate Plan to determine its operational and capital requirements.
This is considered to be adequate mitigation for liquidity risk.
140
ii) Liquidity Risk (Continued)
The table below summarises the maturity profile of trade and other payables:
30TH JUNE 2015 (Amounts in TZS ‘000)

Under 31 - 60 61 - 90 91-120 121 - 150 Over 150
Staff Liabilities 1,096,204 - 1,004,516 3,743 992 55,598 31,355
Salary and
21,635 - 14,488 - - - 7,147
allowances Payable
Social Security
224,173 - 62 - 4,683 17,625 201,803
Funds Payable
Creditors -
Stationery/Office 527,821 - 234,595 5,638 4,480 861.3 282,247
Supplies
Creditors - Utilities /
7,413,911 - 6,826,971 454,543 8,805 123,591
Service
Creditors - Building
93,352 - 93,352 - - - -
Contractors
Other Liabilities 6,299,424 - 5,659,859 - 8,533 9,652 621,379
Accrued Expenses 3,617,536 - 1,709,190 344,770 - 27,910 1,535,666
Creditors -
155,059 - - - - - 155,059
Retention Fees
Creditors - Sundry 930,363 - 221,697 -1,508 13,278 22,603 674,292
Creditors - ITA
Student Caution 104,450 - - - - - 104,450
Money
Creditors - Student 31,525 - 4,340 300 1,530 6,337 19,018
Students Health
16,740 - - 1,467 - 2,671 12,601
Insurance payable
Cost of goods
302,246 176,251 - 125,995 -
purchased(Unpaid) - -
Withholding Tax
82,009 - 30,909 13,024 6,679 5,318 26,079
Payable
20,916,447 15,976,231 821,977 174,976 272,167 3,671,096

-
141
ii) Liquidity Risk (Continued)
30 JUNE 2014 (Amounts in TZS ‘000)
Under 31 - 60 61 - 90 91-120 121 - 150 Over 150

Creditors for 210,509 192,820 5,227 550 11,682 - 230
Materials &
Supplies
Accrued expenses 3,076,975 1,329,991 383,559 7,115 29,884 346,342 980,083
Retention Fees 155,059 - - - - - 155,059
Creditors for utilities 2,251,983 2,203,357 752 131 - - 47,743
& Services
Staff liabilities 327,166 307,069 160 - 198 - 19,739
Salary Payable 993 496 - - - - 498
Other Liabilities 6,629,340 6,358,456 2,820 10,647 821 1,234 255,362
Cost of goods 49,175 -2,638 - - 15 - 51,798
purchased(Unpaid)
Sundry Creditors 1,034,955 222,222 375,527 20,549 348 674 415,634
Social Security 215,598 - 5,668 - - 11,257 198,673
benefits payable to
Ex-staff
Student Caution 89,600 - 50 200 - 2,450 86,900
Money
Student Creditors 50,260 1,850 - - 50 - 48,360
Account
Student Health 20,579 50 - 50 50 1,714 18,714
Insurance Payable
14,112,192 10,613,674 773,763 39,243 43,048 363,671 2,278,793
iii) Currency Risk
Currency risk is the risk that the value of a financial instrument will fluctuate because of
changes in foreign exchange rates. TRA’s operations utilize various foreign currencies
and consequently, are exposed to exchange rate fluctuations that have an impact on cash
flows and financing activities. Currency exposure arising from liabilities denominated in
foreign currencies is managed primarily through the holding of bank balances in the
relevant foreign currencies, and accepting the local currency invoices only. The loss on
foreign currency fluctuation during the year arose from the translation of bank balances.
142
iii) Currency Risk (Continued)
The foreign currencies bank accounts have been disclosed in Note 15. With all other
variables held constant, a shift in foreign exchange rate by 5% on all United States Dollar
(US$) and Great Britain Pound (GBP) denominated assets and liabilities which are major
foreign currency exposure to the Authority would have resulted in lower or higher deficit
of approximately TZS 1,559.29 million (2014: TZS 625 million).
iv) Capital management

Capital includes capital reserve, property, plant & equipment revaluation reserve,
retained earnings and deferred income, which stood at TZS 298,339.10 million (2014:
TZS 304,317.32 million).
The primary objective of the Authority’s capital management is to ensure that it maintains
a strong asset base in order to support its objectives and maximize shareholder value.
No changes were made in the objectives, policies or processes during the years ended
30th June 2014 and 30th June 2015.
8.0 FAIR VALUE OF ASSETS AND LIABILITIES

Set out below is a comparison by class of the carrying amounts and fair value of the
Authority’s assets and liabilities that are carried in the financial statements.
Carrying Value Fair Value
Level I Level II
TZS TZS TZS
30-Jun-15
Assets
Receivables 5,278,688,607 - 5,278,688,607
Cash and Cash Equivalents 72,567,345,311 - 72,567,345,311
Property, Plant and Equipment 207,725,007,196 - 207,725,007,196
Liabilities
Trade and other payables 20,916,446,839 - 20,916,446,839
Carrying Value Fair Value

Level I Level II
TZS TZS TZS
30-Jun-14
Assets
Receivables 2,472,406,670 - 2,472,406,670
Cash and Cash Equivalents 72,689,733,237 - 72,689,733,237
Property, Plant and Equipment 221,437,987,542 - 221,437,987,542
Trade and other payables 14,112,192,128 - 14,112,192,128
Fair value of the assets and liabilities are included at price that would be received to sell
an asset or paid to transfer a liability in an orderly transaction by market participants at
143
8.0 FAIR VALUE OF ASSETS AND LIABILITIES (Continued)
measurement date. The following methods and assumptions were used to estimate the fair
values:
• Cash and cash equivalents, receivables and trade and other payables approximate
their carrying amounts largely due to the short-term maturities of these instruments.
The Authority uses the following hierarchy for determining and disclosing the fair
value of financial instruments by valuation technique:
• Level 1: quoted (unadjusted) prices in active markets for identical assets or
liabilities
• Level 2: other techniques for which all inputs which have a significant effect on the
recorded fair value are observable, either directly or indirectly
• Level 3: techniques which use inputs that have a significant effect on the recorded
fair value that are not based on observable market data
9.0 CATEGORIES OF FINANCIAL INSTRUMENTS
The categorization of financial instruments as per IPSAS 29 Financial Instruments –

Recognition and Measurement is as shown below:
Loans and
Carrying Value Held to maturity
receivables
TZS TZS TZS
30-Jun-15
Financial Assets
Receivables 5,278,688,607 - 5,278,688,607
Cash and Cash Equivalents 72,567,345,311 72,567,345,311 -
77,846,033,918 72,567,345,311 5,278,688,607
Loans and
Carrying Value Held to maturity
receivables
TZS TZS TZS
30-Jun-14
Financial Assets
Receivables 2,472,406,670 - 2,472,406,670
Cash and Cash Equivalents 72,689,733,237 72,689,733,237 -
75,162,139,907 72,689,733,237 2,472,406,670
144
9.0 CATEGORIES OF FINANCIAL INSTRUMENTS (Continued)
Carrying Value Other financial

liabilities
TZS TZS
30-Jun-15
20,916,446,839 20,916,446,839
30-Jun-14
16,220,207,464 16,220,207,464
145
146
10. PROPERTY, PLANT AND EQUIPMENT
Land Buildings Motor vehicles Motor Boats and Machinery Furnitures & Electrical Computers, Sub Total Work In Total
Cycles/ Crafts (Includes Fixtures Equipments Printers & Progress
Cycles scanners UPS
for Customs
operations
TZS TZS TZS TZS TZS TZS TZS TZS TZS TZS TZS TZS
30th June 2015
COST
At 01st July 2014 4,451,061,738 179,222,759,556 33,255,062,627 304,884,963 1,672,311,336 16,263,176,057 8,344,095,270 2,165,162,490 16,044,869,015 261,723,383,052 1,625,588,987 263,348,972,039
Additions 624,211,040 44,839,999 1,189,174,678 956,096,073 1,065,650,515 59,121,900.00 853,958,424 4,793,052,630 2,695,873,465 7,488,926,095
Disposal (794,384,713) - - - - - (794,384,713) - (794,384,713)

Transfer - 313,876,357 - - - - - - - 313,876,357 (313,876,357) -
th
At 30 June
2015 5,075,272,778 179,581,475,913 33,649,852,591 304,884,963 1,672,311,336 17,219,272,130 9,409,745,785 2,224,284,390.15 16,898,827,440 266,035,927,326 4,007,586,095 270,043,513,421
DEPRECIATION
At 01st July 2014 - 8,552,117,464 11,036,471,126 201,779,376 246,710,133 7,736,960,004 3,420,999,214 783,465,273 8,306,892,921 40,285,395,510 - 40,285,395,510
Charge for the

year 4,451,529,534 7,493,149,026 28,549,519 167,231,133 1,611,943,870 1,819,375,863 454,678,441 2,635,608,939 18,662,066,324 - 18,662,066,324
Disposal - - (636,541,704) - - - - - - (636,541,704) - (636,541,704)
At 30th June
2015 - 13,003,646,997 17,893,078,448 230,328,894 413,941,266 9,348,903,874 5,240,375,077 1,238,143,713 10,942,501,860 58,310,920,130 - 58,310,920,130
NET BOOK
VALUE
At 30th June
2015 5,075,272,778 166,577,828,915 15,756,774,143 74,556,069 1,258,370,070 7,870,368,256 4,169,370,708 986,140,677 5,956,325,580 207,725,007,196 4,007,586,095 211,732,593,291
10. PROPERTY, PLANT AND EQUIPMENT (Continued)
Land Buildings Motor vehicles Motor Boats and Machinery Furnitures & Electrical Computers, Sub Total Work In Total
Cycles/ Crafts (Includes Fixtures Equipments Printers & Progress
Cycles scanners UPS
for Customs
operations
30th June 2014

COST
At 01st July 2013 2,894,395,738 176,099,648,791 26,879,275,000 304,884,963 1,672,311,336 13,431,711,947 8,211,642,239 2,132,028,416 14,587,614,016 246,213,512,445 2,029,613,156 248,243,125,601
Additions 1,556,666,000 400,000,000 6,375,787,627 2,865,881,100 177,040,288 33,134,074.57 1,463,581,091 12,872,090,181 2,319,086,597 15,191,176,778
Disposal - - - - - (34,416,991) (44,587,258) - (6,326,091) (85,330,340) - (85,330,340)
Transfer - 2,723,110,766 - - - - - - - 2,723,110,766 (2,723,110,766) -

At 30th June
2014 4,451,061,738 179,222,759,556 33,255,062,627 304,884,963 1,672,311,336 16,263,176,057 8,344,095,270 2,165,162,490 16,044,869,015 261,723,383,052 1,625,588,987 263,348,972,039
DEPRECIATION
-
At 01st July 2013 - 4,124,853,273 5,124,036,375 159,149,714 4,496,759 5,000,250,370 1,561,476,162 414,938,281 5,368,515,418 21,748,722,833 - 21,748,722,833
Charge for the
year - 4,427,264,191 5,912,434,751 42,629,662 251,206,891 2,747,533,298 1,880,042,132 368,526,992 2,940,675,611 18,570,313,529 - 18,570,313,529
Disposal - - - - - (10,823,664) (20,519,079) - (2,298,109) (33,640,852) - (33,640,852)

At 30th June
2014 - 8,552,117,464 11,036,471,126 201,779,376 246,710,133 7,736,960,004 3,420,999,214 783,465,273 8,306,892,921 40,285,395,510 - 40,285,395,510
NET BOOK
VALUE
At 30th June
2014 4,451,061,738 170,670,642,092 22,218,591,501 103,105,587 1,425,601,203 8,526,216,053 4,923,096,056 1,381,697,217 7,737,976,095 221,437,987,542 1,625,588,987 223,063,576,529

Last revaluation was done in the year 2012/13 by an independent licensed and registered asset valuer named M & R Agency Limited. The
fair values for buildings, furniture and remaining asset categories (Motor vehicles; cycles; boats; machinery; equipment and computers)
were determined using open market value, modern equivalent asset price and depreciated replacement cost respectively. The open
market prices were adjusted for differences in the nature, location or condition of the specific item. Fair value measurement disclosures
for revalued property, plant and equipment are provided in Note 8. Further, no non-current asset has been pledged as security for
liabilities.
147
11 INTANGIBLE ASSETS
Software WIP Total
TZS TZS TZS
30th June 2015
COST
At 01st July 2014 29,488,814,884 29,973,151 29,518,788,035
Additions 5,080,673,388 - 5,080,673,388
Transfer 29,973,150 (29,973,150) -
At 30th June 2015 34,599,461,422 - 34,599,461,422
AMORTIZATION
At 01st July 2014 11,193,698,158 - 11,193,698,158
Charge for the year 4,891,720,483 - 4,891,720,483
At 30th June 2015 16,085,418,641 - 16,085,418,641
NET BOOK VALUE

At 30th June 2015 18,514,042,781 - 18,514,042,781
30th June 2014
COST
At 01st July 2013 14,938,407,539 7,712,824,359 22,651,231,899
Additions 6,867,556,136 - 6,867,556,136
Transfer 7,682,851,209 (7,682,851,209) -
At 30th June 2014 29,488,814,884 29,973,151 29,518,788,035
AMORTIZATION
At 01st July 2013 6,762,952,582 - 6,762,952,582
Charge for the year 4,430,745,576 - 4,430,745,576
At 30th June 2014 11,193,698,158 - 11,193,698,158
NET BOOK VALUE

At 30th June 2014 18,295,116,726 29,973,151 18,325,089,877
148
11 INTANGIBLE ASSETS (Continued)
TRA maintains various software for management of its operations. Some of the software
included are AFIS; Electronic Cargo Tracking ;Dataset Management ;Silent Runner;
Identity and Access Management ; Electronic Fiscal Device Management; Disaster
Recovery; Storage Based Consolidation; Audit ;Intranet, Portal and Messaging; Human
Resource Management; Forensic; Asset Tracking ;Virtualization; Network Monitoring
and management; Call center; Central Motor vehicle registration; Library Detection
2014/15 2013/14
TZS TZS
12 CASH AND CASH EQUIVALENTS

TRA HQ - Samora Current Account 35,211,462,537 53,383,980,016
Bank Control Account(NBC) TRA HQ-Euro 1,016,204,707 1,006,632,252
Bank Control Account(NBC) TRA HQ - US$ 2,504,738,774 1,377,429,287
Bank Control Account(NBC) TRA HQ- GBP 4,166,137,572 3,150,118,056
TRA HQ - Film and Music -TZS 155,957,500 5,572,500
Bank Control Account (CITI) TRA Salaries 21,070,401
Donor Bank A/C Std Chartered - TZS-GOT 263,103,604 271,809,604
Bank Control Account(Citibank) - TZS-BASKET 16,582,264,383 6,569,051,642
Bank Control Account(Barclays) - US$-BASKET 80,323,467 968,326,890
Bank Control Account(NBC) US$-NORWAY 2,593,881,515 2,502,244,057

Zanzibar and Regions (See Note 12(b) below) 4,899,200,229 747,982,052
Departments and Institute of Tax Administration
(See Note 12(a) below) 5,072,632,421 2,706,586,881
Petty Cash 368,200
TOTAL - CASH AT BANK AND ON HAND 72,567,345,311 72,689,733,237
12(a) Departments and Institute of Tax

Administration (ITA)
2014/15 2013/14
TZS TZS
Customs and Excise Department - NBC 2,826,688,738 1,331,036,330
Customs and Excise Department-CITI BANK 5,027,391 186,315,422
Domestic Revenue Department 222,409,656 206,286,284
149
12 CASH AND CASH EQUIVALENTS (Continued)

12(a) Departments and Institute of Tax Administration (ITA) (Continued)
2014/15 2013/14
TZS TZS
Large Taxpayers Department (LTD) 1,110,697,664 298,284,711

Institute of Tax Administration (ITA)-CRDB 525,943,149 283,903,415
Institute of Tax Administration (Student ITA)-CRDB 172,975,881 303,720,377
Institute of Tax Administration (ITA)-US$ (KBC) 208,889,941 97,040,343
TOTAL - DEPARTMENTS AND ITA 5,072,632,421 2,706,586,881
2014/15 2 013/14
TZS TZS
12(b) Zanzibar and Regions
Arusha 607,711,031 26,481,356
Coast 9,847,421 1,402,062
Dodoma 22,183,682 638,938
Ilala 273,224,959 6,715,935
Iringa 116,312,080 36,253,102
Kagera 780,733,634 149,263,764
Kigoma 155,351,561 961,012
Kilimanjaro 272,997,388 21,442,960
Kinondoni 168,297,091 43,328,269
Lindi 36,872,691 16,620,602
Manyara 14,962,611 134,180
Mara 354,397,797 31,912,057
Mbeya 547,681,508 246,381,156
Morogoro 142,213,464 4,953,866
Mtwara 1,437,388 481,187
Mwanza 273,580,471 15,685,849
Rukwa 8,105,694 1,510,261
Ruvuma 62,396,485 485,544
150
12 CASH AND CASH EQUIVALENTS (Continued)

12 (b) Zanzibar and Regions (Continued)
2014/15 2 013/14
TZS TZS
Shinyanga 7,342,571 70,382

Singida 80,023,062 1,048,258
Tabora 57,524,463 1,387,191
Tanga 610,311,160 72,762,229
Temeke 87,914,507 67,611,262
Zanzibar 207,777,508 450,631
TOTAL - ZANZIBAR AND REGIONS 4,899,200,229 747,982,052
2014/15 2013/14
TZS TZS
13 RECEIVABLES
Motor Vehicle Loans 189,126,125 78,494,019
Salary Advances 137,133,112 25,395,304
Staff Imprest 1,425,913,706 375,241,060
Tax Stamps Debtors 602,202,705 6,587,778
Rent Receivable 312,521,229 576,849,090
Interest Receivable 34,573,282
Sundry Debtors 1,244,325,268 162,294,530
Staff Debtors for Medical Expenses 139,832,788 52,301,702
Staff Debtors for Telephone Expenses 39,598,003 18,852,975
Debtors - ITA Student 192,160,100 174,855,232
Deposits 1,023,086,652 1,063,319,342
Provision for impairement of receivables (61,784,362) (61,784,362)
TOTAL 5,278,688,607 2,472,406,670
151
2014/15 2013/14
TZS TZS
14 INVENTORIES
Stationery 339,332,733 497,807,175
Materials 861,461,176 168,255,249
Accountable Documents 536,016,749 746,359,804
Stock in transit 111,198,644
TOTAL 1,848,009,301 1,412,422,228
During the period ended 30th June 2015 TZS 8,346.33 million (2014: TZS 4,378.26 million)
was recognised as an expense for inventories carried at net realisable value/current
replacement cost.
The amount is recognised as part of general services and office supplies expense.
2014/15 2013/14
TZS TZS
15 PREPAYMENTS
Advance to Suppliers 8,247,326,565 210,697,308
Prepaid Expenses 1,067,538,727 255,584,059
TOTAL 9,314,865,292 466,281,366
The increase in prepayments resulted mainly from advance payment amount to Tshs
8,216.49 million made to Ununuzi wa Magari kwa Pamoja for procurement of official motor
vehicles. The motor vehicles are expected to be delivered in year 2015/16.
2014/15 2013/14
TZS TZS
16 TRADE AND OTHER PAYABLES
Creditors for Materials & Supplies 527,821,525 210,508,906
Creditors for utilities & Services 7,413,910,806 2,251,982,601
Building Contractors 93,351,995
Staff liabilities 1,096,203,708 327,165,547
Salary and allowances Payable 21,635,233 993,499
152
16 TRADE AND OTHER PAYABLES (Continued)
2014/15 2013/14
TZS TZS
Accrued expenses 3,617,534,981 3,076,974,754
Other Liabilities 6,299,423,906 6,629,340,722
Retention Fees 155,059,378 155,059,378
Sundry Creditors 930,362,875 1,034,954,908
Student Caution Money 104,450,000 89,600,000
Student Creditors 31,525,012 50,260,300
Students Health Insurance payable 16,739,700 20,578,900
Social Security benefits payable to Ex-staff 224,172,901 215,597,652

Withholding tax payable 82,008,872 -
Cost of goods purchased(Unpaid) 302,245,948 49,174,960
TOTAL 20,916,446,839 14,112,192,128
17 DEFERRED INCOME 2014/15 2013/14

Grants have been received for Recurrent and
TZS TZS
Capital Expenditure. There are no unfulfilled
conditions or contingencies attaching to these grants.
Balance at the beginning of the Year 35,276,635,644 34,960,308,051
Received during the year 15,843,127,280 10,677,772,841
Exchange loss 15,476
Amortised during the year (Note 18) (11,224,636,649) (10,361,460,723)
Balance at the end of the Year 39,895,126,275 35,276,635,644
153
18 CAPITAL CONTRIBUTED BY GOVERNMENT OF UNITED REPUBLIC OF

TANZANIA
2014/15 2013/14
TZS TZS
Office Buildings 7,372,231,143 7,372,231,143
Non-Current Assets Replacement Reserve 7,000,000,000 7,000,000,000
Residential Buildings 3,221,625,388 3,221,625,388
Motor Vehicles 1,160,909,405 1,160,909,405
Motor Cycles 55,893,620 55,893,620
Office Furniture & fixtures 1,269,253,269 1,269,253,269
Electrical Equipment 332,981,560 332,981,560
Work in Progress - Office 450,000,000 450,000,000
Accumulated Depreciation (86,900,112) (86,900,112)
Computers 897,753,223 897,753,223
Other Assets 49,617,307 49,617,307
TOTAL 21,723,364,802 21,723,364,802
19 GRANTS
2014/15 2013/14
TZS TZS
Grants from International Agencies 11,215,973,649 10,323,530,723
Counterpart funding -Government of Tanzania 8,663,000 37,930,000.00
Release from Deferred Grant Income 11,224,636,649 10,361,460,723
During the period under review, TRA receipted technical assistance from development partners/
international insitutions as explained in Note 27.
20 REVENUE FROM EXCHANGE TRANSACTIONS

2014/15 2013/14
TZS TZS
Tax Consultants Registration Fees 9,677,489 31,853,156
External Stakeholders’ Training Fees 1,686,130,540 1,831,875,368
Consultancy Income 19,430,369
Miscellaneous Income 25,382,200 45,949,973
154
20 REVENUE FROM EXCHANGE TRANSACTIONS (Continued)
2014/15 2013/14
TZS TZS
Destination Inspection Fees 51,821,058,600 59,097,003,772
Bank Fines and Penalties 19,881,465 32,505,469
Rental Income 667,110,103 551,962,816
Interest Income 8,323,993,668 9,211,092,698
Drivers’ License Income 8,399,863,756
TOTAL 70,972,528,189 70,802,243,252
21 EMPLOYEES’ BENEFITS
2014/15 2013/14
TZS TZS
Basic Salary 93,976,481,413 90,145,682,458
Social Security Funds (Employer’s 13,691,723,536 13,120,225,308
Contribution)
Housing Allowance 10,648,169,224 10,353,833,019
Transport Allowance 8,779,332,139 8,583,624,959
Guard Allowance 79,742,000 79,879,812
Gardener Allowance 4,172,826 3,576,708
Shift Supplement Allowance 1,842,036,422 1,695,674,249
Acting Allowance 226,920,561 227,554,647
Extra Duty Allowance 952,929,346 833,017,406
Transfer Benefit 2,290,950,778 1,466,287,550
Honorarium 390,791,089 417,923,100
Gratuity 1,397,130,770 1,580,442,882
Furniture Allowance 321,715,500 742,880,859
Leave Travel Assistance 2,623,881,593 2,381,588,062
Medical Expenses (Local) 3,325,658,397 2,743,192,780
Medical Expenses (Foreign) 618,674,437 569,950,959
Funeral Expenses 181,854,842 191,264,897
Employees Insurance 528,667,762 528,683,962
Social Club Membership Fee 40,800,041 26,764,793
Mobile Phones 730,083,165 563,105,812
Foreign Deployment allowance 136,900,000
TOTAL 142,788,615,840 136,255,154,220
155
2014/15 2013/14
TZS TZS
22 TRAVELLING EXPENSES
Perdiem, Incidental and Day Allowances - Local 10,666,612,600 9,056,331,329
Perdiem, Incidental and Day Allowances - Foreign 4,624,157,657 3,448,501,081
Fare - Local 1,656,692,158 1,008,353,582
Fare and Excess Baggage - Foreign 3,255,270,694 1,708,979,516
Visa Fee 19,666,087 10,995,775
Outfit Allowance 33,782,277 24,713,945
Mileage Allowance 15,250,720 2,010,000
TOTAL 20,271,432,193 15,259,885,228
23 FUEL AND LUBRICANTS 2014/15 2013/14

TZS TZS
Fuel and Lubricants - Motor Vehicle 3,286,276,008 2,784,637,817
Fuel and Lubricants - Motor Cycle 3,304,020 11,573,772
Fuels and Lubricants - Boats 131,449,174 82,989,546
Fuels and Lubricants - Generators 469,495,684 466,157,595
Fuels and Lubricants - Customs Scanner 125,733,697 196,110,743
TOTAL 4,016,258,583 3,541,469,473
24 REPAIRS AND MAINTENANCE

2014/15 2013/14
TZS TZS
Repairs/Maintenance - Office Buildings 1,398,407,052 1,691,589,125
Repairs/Maintenance - Residential Buildings 320,707,825 357,306,076
Repairs/Maint- Godown Buildings 679,000
Repairs/Maintenance - Other Buildings 140,259,480 3,300,000
Repairs/Maintenance - Boats 43,131,894 128,853,724
Repairs/Maintenance - Motor Vehicle 2,269,827,664 2,584,910,341
Repairs/Maintenance - Motor Cycle 9,659,821 3,639,500
Repairs/Maintenance - Customs Scanner 2,192,952,950 2,556,080,578
Repairs/Maintenance - Generators 229,536,893 273,572,174
Repairs/Maintenance - Office Furniture 89,884,757 187,006,711
Repairs/Maintenance - Residential Furnit 542,000 13,147,200
Repairs/Maintenance - Computers and Related 3,773,001,606 2,942,150,779
Equipments
Repairs/Maintenance - Electrical Equipment 15,403,890 9,846,703
Residential
Repairs/Maintenance - Electrical Equipment Office 227,909,936 134,196,261
156
24 REPAIRS AND MAINTENANCE (Continued)
2014/15 2013/14
Repairs/Maintenance - Air Conditions and Cooling 323,584,953
TZS 329,208,755
TZS
systems
Repairs/Maintenance - Solar Equipments 77,262,894 9,320,000
Repairs/Maintenance - Photocopy Machines 196,058,098 222,048,684
Repairs/Maintenance - Gymnasium Equipment 14,204,840 270,000
Software License Fee 1,181,614,057 2,074,405,206
Repairs/Maintenance - Lifts/Elevators 11,332,360 19,690,780
Repairs/Maint- Fire Fighting Equipments 108,912,742
TOTAL 12,624,874,711 13,540,542,597
25 GENERAL SERVICES AND OFFICE SUPPLIES

2014/15 2013/14
TZS TZS
Printing and Stationery
Printing and Stationery Expense 6,772,852,394 3,138,355,895
Sensitive Documents Expense 168,578,883 338,050,706
Office Supplies 1,404,897,407 901,853,634
8,346,328,684 4,378,260,235
Utilities
Water 302,103,343 229,148,235
Sewage Disposal Charges 88,662,234 46,990,076
Electricity 2,370,743,361 2,049,975,522
Telephones ( Landline) and Fax 506,152,182 491,760,963
Data Lines & Internet Services 6,948,029,066 4,600,980,778
Postage and Courier Charges 400,607,866 387,597,928
10,616,298,052 7,806,453,502
Cleaning
Office Cleaning 1,297,047,664 1,147,577,294
Laundry Expenses 34,979,798 4,639,267
Upkeeping of Grounds 28,102,009 32,250,365
Sanitary Services 87,306,811 54,589,006
1,447,436,282 1,239,055,932
Insurance
Insurance - Building 399,257,907 453,053,769
Insurance - Boats 44,214,092 44,214,092
Insurance - Plants and Office Machinery 171,138,267 106,004,779
614,610,266 603,272,640
157
25 GENERAL SERVICES AND OFFICE SUPPLIES (Continued)
2014/15 2013/14
TZS TZS
Other Expenses
Staff Refreshment Consumables 1,177,074,463 920,093,177
Security Services 1,304,141,815 1,314,730,474
Legal Compensation Costs 468,876,031 200,000,000
Refreshments and Entertainment 694,403,070 613,645,397
Advertisments 1,672,554,933 1,676,894,513
Staff Uniform 210,844,752 199,745,996
Sitting Allowance 604,719,402 549,043,137
Repatriation Expenses 330,407,829 304,586,430
Donations 444,891,791 143,359,920
Interview Panel Allowances 14,439,850 28,361,190
Library and Periodicals 13,654,665 12,602,540
Office and Godown Rent 2,147,541,518 1,967,404,013
Newspapers and Magazines 326,951,383 336,494,294
Casual Labourers 53,085,931 112,144,360
Catering Expenses 328,662,849 380,071,867
Sensitization Materials - (Caps, Tshirts, leaflets, 385,667,315 588,896,001

banners)
Fumigations 304,117,094 141,122,019
Professional Fee Subscriptions 81,790,751 101,109,220
Membership and Access Subscription Fee 390,090,131 313,972,538
Audit Fee & Related Expenses 488,744,942 333,477,200
Rewards to Informers 209,521,794 249,892,361
Protective Gears 12,139,200
Consultancy Fees 5,982,186,370 2,269,108,211
Equipments Hiring charges 13,638,712 32,345,000
Motor Vehicle Hiring charges 47,115,216 25,776,850
Conference Room Hiring charges 2,448,363,768 1,500,126,404
Advocates Hiring charges 49,460,550 53,448,500
Preliminary Land Acquisition Costs 78,175,000 360,000
Music and Performing Art services 33,763,300 35,109,000
Decorations and Seasonal cards 94,565,850 42,544,147
Gifts, Prizes and Awards 70,635,076 62,921,350
158
25 GENERAL SERVICES AND OFFICE SUPPLIES (Continued)
Other Expenses (Continued)
2014/15 2013/14
TZS TZS
Journalists Allowance 28,277,114 42,009,500
Still and Video picture 10,088,391 16,518,200
Directors’ Fees 73,666,668 91,038,444
Board Secretariate Allowances 412,705,000 382,240,000
Movers Expenses 10,940,000 14,350,000
Sundry Office Expenses 179,869,814 188,049,139
TV/Radio Programmes Airtime Cost 737,864,895 337,893,777
Exhibition Allowances 42,269,000 33,773,290
Entry Fees 285,000 148,000
Editorial Expenses 2,610,000 8,268,966
Court Attire 10,635,354 9,000,000
Police Escort Charges 68,272,697 67,417,260
Pavillions Charges 80,171,920 144,417,093
External Expert Fees 77,239,740 940,000
Tuition Fee - Local 96,656,756 300,364,516
Tuition Fee - Foreign 447,032,545 388,147,650
Accommodation Expenses 404,764,817 439,173,870
Moderation Allowances 17,770,380 62,127,340
Graduation Gowns Expenses 26,229,250 11,525,000
Students Meals Expenses 3,905,328
Workshop and Seminar Fee 1,607,575,648 1,200,829,372
Losses and Write-Offs Account 13,807,137
Tax Expenses 588,094,427
Councilors’ Fees 36,825,000 40,375,000
Council Secretariate Allowances 15,940,000 18,035,000
Other Board Meeting Expenses 157,766,350 84,944,133
Translator Fees 640,000
25,615,776,119 18,409,324,197
TOTAL 46,640,449,403 32,436,366,506
159
26 FINANCE COSTS
2014/15 2013/14
TZS TZS
Tax Collection and Transfer Commisions 4,709,367,502 5,061,910,580

Other Bank Charges 162,434,900 144,399,442
Impairement Loss(Receivables) 23,095,000
TOTAL 4,872,302,402 5,229,405,022
27 TECHNICAL ASSISTANCE
TRA continued to receive technical support from various Development Partners

including Norwegian Tax Administration, US Treasury, DFID/HMRC, DANIDA, IMF
East Afritac) and Investment Climate for Africa (ICF). During the period under review
the following Technical Assistance were received.
Norwegian Embassy
During the period under review the Embassy provided training support in the following
areas: Training on ADAPT II and Vertical integration chain and modelling techniques
and practical work; Training on Mining and Petroleum; and Benchmarking visit to
Indonesia to acquire practical experience on revenue administration on mining, oil &
gas.
Norwegian Tax Administration (NTA) support to TRA
During the period under review Norwegian Tax Administration has assisted TRA
in clearance of audit backlog – (Re-assessments for the 7 backlog cases have
established taxes of over USD 50 million and reduced the declared tax losses by over
USD 500 million) and has continued streamlining audit process & Objection process;
Implementing a risk-based compliance strategy for large taxpayers.

US Treasury
The United States Department of Treasury, the Revenue Policy and Administration
Advisory Program of the Office of Technical Assistance (OTA) provides technical
assistance and cooperation to Ministry of Finance and TRA to assist in the efforts
to increase revenue generation, broaden the tax base, and increase compliance
160
27 TECHNICAL ASSISTANCE (Continued)
US Treasury (Continued)
in the payment of taxes. The objective of this assistance is promotion of fairness
and transparency in taxation and tax systems. OTA provided assistance to TRA in
strengthening effectiveness of tax audits in the specialized sectors (financial services,
tourism, construction, and telecommunications); and expertise in the audit of transfer
pricing transactions of multinational enterprises. Support is also being given on devising
a Compliance Strategy for domestic tax operations and strengthening capacity in Tax
Investigation operations. During the period under review, four deployments were carried
out. A missions were conducted to build capacity in Tax Investigation operations .

IMF (FAD & East Afritac)

The IMF continued its support to TRA through Technical Assistance Program following
the previous FAD missions that had recommended to TRA the need of developing a
comprehensive compliance strategy anchored on effective taxpayer service and
education, enforcement and collection, and audit and investigation functions.TRA
recognizes the need to strengthen its audit practice and received technical assistance
from IMF on Strengthening Audit practice with a focus on Computer assisted audit. The
mission was conducted from in March, 2015 to review the current audit procedures and
practices and to make recommendations for improvement. The second mission was
conducted in March/April, 2015 on Developing a Compliance Risk Strategy and Plan in
Tax administration.
DANIDA

TRA continued to utilize the support provided by the Government of Denmark. During
the period under review, The Danish Ministry of Taxation (SKAT) provided Technical
assistance to TRA in the establishment of the Enterprise Architecture as part of Enterprise
Application Architecture initiative under TRA’s fourth Corporate Plan.
DFID

The Government of United Kingdom through Department for International Development
(DfID) provides technical assistance support in implementing initiatives under fourth
corporate plan. During the period under review , DFID provided technical assistance on
Quality Assuarance on TANCIS.Also, DFID assisted TRA through providing Technical
Assistance (procurement agent) for procurement of an Integrated Domestic Revenue
Administration System (IDRAS) following two failed attempts to identify a suitable supplier
of the system through the normal procurement process.
161
27 TECHNICAL ASSISTANCE (Continued)
Her Majesty’s Revenue and Customs (HMRC).

During the period under review, HMRC provided technical assistance on Physical and
Digital Security. Further, HMRC commenced External Transparency and Integrity review
(Phase I)
Investment Climate Facility (ICF)

During the period under review ICF supported training and sensitization to TRA staff
and stakeholders on TANCIS operation as well as financing the Project Management
Consultant and Procurement Consultant. Also supported training on Project Management
to TRA Management and staff.
Japan International Cooperation Agency (JICA)

As part of the government’s efforts to address the challenges faced in collecting revenue
from domestic taxes, a three year project, titled “Project for the Enhancement of Taxation
Training in Tanzania” was agreed with the government of Japan through its agency for
international cooperation (JICA). The goal of the project is to enhance capacity of the
staff working for tax administration through improved training programs provided by
ITA.During the period under review, JICA continued with implementation of the courses
identified under the project
2014/15 2013/14
TZS TZS
28 RELATED PARTY TRANSACTIONS
This involves the following:
(a) Board of Directors expenses:

Directors Fees 110,491,668 131,413,444
Directors Sitting Allowances 428,645,000 400,275,000
Directors travelling Expenses 115,812,761 56,699,000
Other Board Expenses 157,766,350 84,944,133
812,715,779 673,331,577
162
28 RELATED PARTY TRANSACTIONS (Continued)
2014/15 2013/14
TZS TZS
(b) Short-Term Employment Benefits
to Senior Management
Salaries 4,104,223,019 4,092,656,073
Allowances 1,351,741,881 1,350,059,971
Social Security Contribution 542,972,250 536,426,508
5,998,937,150 5,979,142,552
(c) Other Long-Term Employment

Benefits for Senior Management
Gratuity 1,397,130,770 1,580,442,882

(d) Motor Vehicle Loans to Senior
Management
TRA offers Motor Vehicle Loans to Senior Management and their Deputies as stipulated
in their contract. The loans are recoverable within 3 years from the date of disbursement.
Outstanding balances at the year-end are interest free and settlement occurs in cash.
The position as at the end of the period is shown below:
2014/15 2013/14
TZS TZS
At the beginning of the Year 76,199,019 103,168,672
Additions during the Year 48,000,000 66,000,000
Recovered during the Year (59,402,614) (39,030,347)
At the end of the Year 64,796,405 76,199,019
(e) Transaction with related entities
Subvention from Treasury 160,280,500,000 173,880,500,000
29 EVENTS SUBSEQUENT TO THE FINANCIAL STATEMENTS’ DATE
There are no significant events subsequent to 30th June 2015 affecting the financial
statements that requires disclosure.
163
30 ASSETS PLEDGED AS SECURITY FOR LIABILITIES
The amount disclosed as deposit under Note 12 of these financial statements includes
TZS 1,000.00 million which relates to the amount deposited by TRA at National Bank
of Commerce in order to obtain a banker’s guarantee. The guarantee is aiming at
guaranteeing TRA on her notice of appeal for stay of execution of the decision of the High
Court (Land Division) at Bukoba in land case No.1 of 2008 Vs M/S Zinunula Corporation
Tanzania Ltd as ordered by the Court of Appeal. The guarantee was issued on 5th March,
2012. However, the decree of the high court which gave rise to the furnishing of the
banker’s guarantee has been quashed by the court of appeal and funds were returned
to TRA bank accounts in first quarter of 2015/16. Apart from the asset mentioned above,
no other asset has been pledged as security for liabilities.
31 COMMITMENTS AND CONTINGENCIES
Operating lease commitments – Authority as lessee
The Authority has entered into commercial leases on certain buildings. These leases
have an average life of between three and five years with no renewal option included in
the contracts. There are no restrictions placed upon the Authority by entering into these
leases. Future minimum rentals payable under non-cancellable operating leases as at
30th June are as follows:
2014/2015 2013/2014
TZS TZS
Within one year 1,146,247,962 1,504,594,661
After one year but not more than five years 316,983,707 135,656,047
1,463,231,669 1,640,250,708
Operating lease commitments – Authority as lessor

The Authority has entered into commercial property leases on its landed properties.
These non-cancellable leases have remaining terms of between one and three years.
All leases include a clause to enable upward revision of the rental charge on an annual
basis according to prevailing market conditions. Future minimum rentals receivable
under non-cancellable operating leases as at 30 June are as follows:
2014/2015 2013/2014
TZS TZS
Within one year 84,830,030 452,323,392
After one year but not more than five years 69,266,159
84,830,030 521,589,551
164
31. COMMITMENTS AND CONTINGENCIES (Continued)

Capital commitments
At 30 June 2015, TRA had Capital Commitments amounting to TZS 39,811.27 million
as compared to TZS 29,504.47 million at 30th June 2014. The commitments were
relating to the construction of TRA offices and/or residential buildings and other Non-
Current Assets. Status of Capital Commitments is as indicated below:
2014/2015 2013/2014
TZS TZS
Approved not contracted for 20,181,217,079 19,179,545,144

Approved and contracted for 19,630,048,380 10,324,922,461
39,811,265,459 29,504,467,605
Legal claims Contingency

Taxpayers and Ex TRA staff have commenced legal proceedings against TRA in respect
of tax issues and termination of employment respectively. The estimated payout is TZS
2,205.38 million should the action be successful. Judgment date has not been set and
therefore it is not practicable to state the timing of the payment, if any .The Authority
has been advised by its legal counsel that it is only possible, but not probable, that the
action will succeed. Accordingly, no provision for any liability has been made in these
financial statements.
165
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ANNUAL REPORT

For any misconduct by TRA 0fficials call:

TABLE OF CONTENTS............................................................................................. III

TRA VISION,MISSION AND CORE VALUES.......................................................... IV

SNAP SHORT OF OUR PERFORMANCE................................................................V

COMMISSIONER GENERAL’S STATEMENT............................................................ 5

STATEMENT OF DIRECTORS’ RESPONSIBILITY................................................. 39

TANZANIA REVENUE AUTHORITY AUDITED REVENUE STATEMENTS............. 81

TANZANIA REVENUE AUTHORITY AUDITED FINANCIAL STATEMENTS........111

TRA Core Values

Integrity: We believe in being fair and honest in all our

Professionalism: We are committed to applying the law consistently,

Hon. Dr Philip I. Mpango (MP)

Hon. Dr Philip I. Mpango (MP),

Mr. Bernard S. Mchomvu

2.0 Core Functions of Tanzania Revenue Authority

The Fourth Corporate Plan (2013/14-2017/18) focuses on enhancing taxpayer

3.0 Macroeconomic Environment

4.0 Implementation Challenges

5.0 Major Achievements

Mr. Bernard S. Mchomvu

Mr. Alphayo. J. Kidata,

2.0 CORE FUNCTIONS

3.0 REVENUE COLLECTION

5.0 ELECTRONIC FISCAL DEVICES (EFDs)

7.0 WAY FORWARD

“Together We Build Our Nation”

2.2 Overall Revenue Collection

Source: Finance Department

2.2.2 TRA Collections in Zanzibar

Source: Finance Department

2.3 Departmental Performance in Tanzania Mainland

July 2013– June 2014 July 2014 - June 2015

Source: Finance Department

Source: TRA Audited Accounts

2.3.1 Customs and Excise Department

Source: TRA Audited Accounts

2.3.2 Domestic Revenue Department

Figure 5: DRD Monthly Revenue Collection Performance 2014/15

Source: TRA Audited Accounts

2.3.3 Large Taxpayers Department

Source: TRA Audited Accounts

2.4 Revenue Collections in Zanzibar

Figure 7: Monthly Revenue Collection TRA Zanzibar 2014/15

Source: TRA Revenue Collection Reports

2.5 Results on Key Performance Indicators and Strategic Measures

Table 2: KEY PERFORMANCE INDICATORS REPORT

% Customs clearance made within 24 DSM PORT 41 95 36 70 82

% Customs clearance made within 24 AIRPORT - JNIA 80 90 78 90 64

% of Cargo Manifests submitted/registered AIRPORT - JNIA 0 100 0 100 2

% of Cargo Manifests submitted/registered DSM port 89 100 91 95 93

Average Time Taken to accomplish Customs LAND BORDER 1 0 2 1 0.9

Average Time Taken to accomplish Customs AIRPORT - JNIA 1 0 1 1 1.4

Average Time Taken to accomplish Customs DSM Port 3 1 4 1 0.2

Average Time Taken to clear goods - Arrival LAND BORDER 1 1 2 1 2

Average Time Taken to clear goods - Arrival AIRPORT - JNIA 3 2 4 2 4

Average Time Taken to clear goods - Arrival DSM Port 9 8 11 7 11

Revenue Collection Performance (%) 100 100 88.7 100 92.8

Domestic Percentage of VAT refunds made within a 78 85 74 85 71