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Issue 00498 |
December 8 - 14, 2007 |
issn 0856 - 9135 |
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Front Page 1 |
| Council enforces ‘new’ service
levy - Corporate entities to pay up to 0.3% of turnover - Many not aware of the levy by Edward Selasini The Arusha Municipal Council is bracing to take legal action against hundreds of companies in Arusha that have ignored a 2004 By Law requiring them to pay Service Levy. Many business people in Arusha, however told the Arusha Times they were not aware of the levy. The Service Levy is a ‘tax’ payable by corporate entities to the urban authorities at a rate not exceeding 0.3 percent of the turnover net of the value added and the excise duty. Expenses incurred by a company in the course of carrying out its business are regarded as part of the company’s charges and are taxable. The enabling laws are the Local Government Finances Act of 1982 and the Arusha Municipal Council (Service Levy ) By laws 2003 GN No. 11 published in January 2004. The Arusha municipal Council started collecting the levy with increased efforts this year to generate own resources that will be used to maintain road infrastructure in the municipality and fund social projects like building schools and health facilities. To make sure that the initiative succeeds the German Development Service (DED) is providing technical support to the Arusha Municipality council and it has placed an advisor for financial management and revenue enhancement at the municipal headquarters. The co-operation started in December 2006 and will run for the next two years. The Financial Advisor, David Lahl told the Arusha Times , local revenues (esp. Property tax and Service levy) are levied efficiently and effectively through transparent procedures that are fair to all citizens. So far over 1500 companies that are eligible to pay the Service Levy have been registered and within five months, this year , AMC collected a total of Tsh 500 million as Service Levy, according to municipal officials. "In order to strengthen revenue collection AMC has embarked on regular data exchange with TRA and will enforce outstanding debts also with legal means," said a press statement issued by the Council. It added: "We will soon publish the names of the tax defaulters and companies who are not complying with our local tax regulations will be brought to court, this is also a matter of tax fairness. Many companies, the statement said, who are complying with the local tax regulations have complained about the competitors who evade taxes in order to receive advantages in competition. About 76 percent of the Council’s revenues are grants from donors and transfers from the central government. A random survey by the Arusha Times shows that many companies in Arusha are still not aware of the existence of the Service Levy. Edwin Shetto, Zonal Director of the Tanzania Chamber of Commerce, Industries and Agriculture said there was need for AMC to step up its efforts in educating businesses about the Levy because many of them were not aware of it. The Chamber is also expecting to have a meeting with municipal officials to discuss rates and modalites of effecting payment of the levy. But the AMC says that it had already embarked on a vigorous campaign to educate businesses and corporate entities on the importance of the new levy for the development of social services in the city. "With increased revenues, the
Arusha Municipal Council will be able to fund more development projects
in the local poverty reduction strategy with own revenues," said the AMC
statement. |
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