FOLLOWING recent legal reforms on tax regime, the Zanzibar government over the weekend announced the establishment of ‘Zanzibar Revenue Authority (ZRA)’ replacing the ‘Zanzibar Revenue Board (ZRB)’ that was formed 26 years ago to deal with tax collection.
State Minister in the President’s Office (Finance and Planning), Dr Saada Mkuya Salum, said here that the Zanzibar Revenue Authority Act, 2022 was assented by President Hussein Mwinyi on December 29th last year and published in the government Gazette.
This follows Members of the Zanzibar House of representatives, on December 14th last year, discussion and approving ‘A Bill for an Act to Repeal the Zanzibar Revenue Board Act, No. 7 of 1996 and the establishment of the Zanzibar Revenue Authority (ZRA) as a central body for assessment and collection of specified revenues to administer and enforce the laws relating to such revenues.
“We are happy that the bill has been passed into law, and it took effect after the President appointed Commissioner General of the new ZRA,” Dr Salum said as she introduced, Mr Yussuf Mwenda, as the ZRA Commissioner General after the President’s appointment. Initially, Mr Mwenda was the Commissioner of ZRB.
The new Act also says that ‘all employees who, before the commencement of this Act were the employees of ZRB shall, after the commencement of this Act continue to be the employees of ZRA, and that all property shall on the date of commencement of this Act vest in the Authority subject to all interests, liabilities, charges, obligations and trust affecting the property.
Dr Saada added: “We hope that the new authority will ignite the management and staff to double their efforts in collecting revenue by increasing sources, and ensuring that cheating and tax evasion are controlled. We hope that these changes will improve the performance.”
She said the functions of the ZRA will include promoting tax compliance by engaging taxpayers and maximising revenue collection to the highest possible degree; maintaining and preserving statistical data on revenue collection; and collecting and processing statistics needed to provide proper revenue forecasts.
The minister explained that the reasons to establish ZRA include having a strong institution for revenues collection in Zanzibar; to comply with other countries’ systems and to have better systems to foster accountability among staff and the management.
On his part, Commissioner General Mwenda thanked Dr Mwinyi for continuing having trust in him as he vowed to increase collection in the Islands of Unguja and Pemba.
He urged his subordinates not to disappoint the president and the people of Zanzibar.
He said so far, the legal reforms have led to increased revenue collection, noting that under the ZRB the Isles collected about 154.3bn/-, equivalent to 99.6 per cent of expected collection of 154.9bn/- in the second quarter of the financial year 2022/2023.
ZRA is responsible for Value Added Tax Act, No. 4 of 1998; the Stamp Duty Act, No. 7 of 2017; the Hotel Levy Act, No. 1 of 1995; the Port Service Charge Act, No. 2 of 1999; the Petroleum Levy Act, No. 7 of 2001; the Property Tax Act, No. 14 of 2008; the Excise Duty Act, No. 8 of 2017; the Tax Administration and Procedures Act, No. 7 of 2009; and any other law, which is or may come into force to mobilise and collect revenue in Zanzibar.
Despite the formation of the ZRA, the Tanzania Revenue Authority (TRA) which its jurisdiction include Zanzibar, continues to work on, among others, income tax for individuals; corporation tax; Pay as You Earn (PAYE); Skills Development Levy (SDL); Withholding tax; Capital Gains tax; Value Added Tax (VAT); Excise duty; Stamp duty; Gaming tax; VAT exemptions on projects funded by government or donors; and Charitable Organisations.