TANZANIA INSTITUTE OF ACCOUNTANCY

(TIA)

FIELD REPORT

COURSE: DIPLOMA IN PROCUREMENT AND LOGISTICS MANAGEMENT

(DPLM)
PLACE VISITED: TANZANIA REVENUE AUTHORITY (TRA)

NAME OF SUPERVISOR:
PARTICIPANT: NDEGE HAWA A.

REG. NO: TIA/SGD/DPLM/12/07750

A Field Report Submitted To Tanzania Institute Of

Accountancy [Tia] In Partial Fulfillment Of Requirement For
The Award Of Diploma In Procurement And Logistics Management [Dplm]

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Table of Contents
ACKNOWLEDGEMENT.................................................................................................................................3

DECLARATION..............................................................................................................................................4

ABSTRACT....................................................................................................................................................5

LIST OF ABBREVIATIONS..............................................................................................................................6

PART ONE.....................................................................................................................................................7

1.0 Historical Background......................................................................................................................7

1.2 Core Functions Of Tra.....................................................................................................................7

1.3 Vision Of Tra..............................................................................................................................13

1.4 Mission Of Tra...........................................................................................................................13

1.5 Core Values For Tra Staf............................................................................................................13

1.6 Structure Of Organization..........................................................................................................14

1.7 Description Of Staf..................................................................................................................15

PART TWO..................................................................................................................................................17

2.0 Findings And Discussions.............................................................................................................17

2.1 Data Processing Section...............................................................................................................18

2.2 Reception/Front Desk..................................................................................................................18

2.3 Problems Encountered During The Field Work Training...............................................................19

2.4 Possible Solutions........................................................................................................................20

SUMMARY.................................................................................................................................................21

CONCLUSION.............................................................................................................................................22

RECOMMENDATIONS................................................................................................................................23

REFERENCES..............................................................................................................................................24

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 ACKNOWLEDGEMENT
Working on this field was not that simple, it needed full dedication, attention
and support. I had to work with different people who enabled the
accomplishment of this noble task.

I would first like to thank God Almighty, I am so grateful for being there for
me unconditionally; giving me faith to carry on whenever I felt like giving
up throughout my studies and so as in this report.

I am also beholden to Ms.Zabibu Semeta, my external supervisor for her

guidance, encouragement and advice on this whole report.

I will be too ungrateful if I forget to mention the invaluable support I

got from the TRA management for proving me the roof to pursue my field
project and the assistance from the staff on this project; just to mention a few
I would like to thank the head of technical unit(HTU).Mr. Z.Ernest ,Mr.
A.Kasomi , Mrs. I.Mzava.

However I would like to thank my parent and my late Mother Nesma

Kayombo my brothers my young sister and my friend who supported me in
one way or another

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 DEDICATION
I dedicate this study to God the Almighty, the provider of my health and
opportunities that led to the completion of this study to my late lovely
Mother Nesma my lovely Father John Kayombo my brothers Dominic,
January and Raphael and my sister Catherine Kayombo who encouraged and
gave moral and material support to achieve diploma of Account and Finance

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 DECLARATION
I Kayombo,Sarah. declare that this field report is my own work and I did
when was practice the field during the end of second year of diploma at
TANZANIA REVENUE AUTHORITY

Kayombo,Sarah.

Candidates full name

Candidates Signature

..

Supervisors full name

Mrs. .

Supervisors signature

..

Date .

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 ABSTRACT

As part of the academic program to supplement what learnt in the classes,

all undergraduates students at the TEOFILO KISANJI UNIVERSITY are
attached or required to find attachment in various institution/organization
which may either be within the public or private sector.

Its main objective is to provide an opportunity for a student to integrate

theory and practice. The end results is that the student will be able to
enhance his or her skill, knowledge, work abilities, attitude towards his/her
area of specialization, develop habits of rigorous thinking and get exposed to
managerial responsibilities.

This report is about what I learnt and experienced TANZANIA REVENUE

AUTHORITY during my training in Technical unit department. The first
chapter is about the introduction, which covers the general impression and
the background information about the organization.

Second part is about activities performed in the organization which include

the placement in the organization, tasks and duties performed, work
environment, interest in the duties/tasks so performed, measures to the
demand of assigned tasks/duties, problems faced and how to solve them,
expectation before and new things learnt as well as relevance of the
attachment. While in the third chapter is the conclusion and improving the
gap in teaching theory and practice.

In the last part, recommendations on how to narrow the gaps between the
teaching and practice also on handling gaps in the placement are given.

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 LIST OF ABBREVIATIONS

DPAF - Diploma In Accounts and Finance

TRA - Tanzania Revenue Authority

TEKU - Teophil Kisanji University

EFD - Electronic Fiscal Device

HNWI - High Net Worth Individuals

VAT - Value Added Tax

ZRB - Zanzibar Revenue Board

LTD - Large Taxpayer Department

CED - Customs And Excise Department

DRD - Domestic Revenue Department

TIN - Taxpayer Identification Number

QMS - Quality Management System

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 PART ONE
1.0 Historical Background
TANZANIA REVENUE AUTHORITY (TRA) was established by the
TRA Act chapter 399 of the Law which came into effect on 7 th August 1995
and become 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
and it also support Local Government Authority in the collection of property
rates.

The overall management of TRA is vested in the Board of Director as

Board of Directors under the supervision of the Minister of Finance and
Economic Affairs. The Commissioner General is responsible for the day to
day operation of Authority.

TRA has strategic goals are as follows; increase revenue collection in a

cost effective way, modernize TRA operations by using Electronic Fiscal
Device (EFD), provide high quality and responsive customer service,
enhance staff performance management system, promote voluntary tax
compliance.

1.2 Core Functions Of Tra

i) To access, collect and account for all Central Government
Revenue, from Domestic taxes and International taxes include:
The following are the Domestic taxes

a) Value Added Tax (VAT): Is an indirect tax on consumption levied

on a wide range of supplies of goods and services.VAT is a
multistage tax charged on value added to goods and service by
producers and traders at each stage of production and distribution.
Registered traders are the collecting agents for the government. VAT
was introduced in Tanzania on 1st of July 1998 and replaced sales tax

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 on goods and services, receipts based stamp duty, hotel levy and
entertainment tax applicable to VAT registered businesses. It is
charged within mainland in Tanzania at a single positive rate of 20%
to the supplier of taxable goods, taxable services and goods and
services on importation. The taxable value for VAT on imports is the
CIF value plus customs duty, excise duty and any other import tax
applicable. Also VAT in Zanzibar is collected by Zanzibar Revenue
Board (ZRB) under the Local Government. Exports are zero-rated
meaning that no tax is charged on exports but a registered trader
supplying goods and services for the export can reclaim tax on
inputs. Zero-rating exports ensures that they enter the international
market tax-fee thereby making them competitive. Some supplies of
goods and services have special relief from VAT. They include
supplies to the Government or its agencies to be used in the
performance of their statutory functions. Like zero-rated supplies,
these supplies are taxable but the tax is fully remitted. Traders
supplying goods and services to such institutions are allowed tax
credit on their purchases.

b) Excise Duty on locally manufactured goods: Is also levied on

certain locally manufactured goods. The traditionally excisable goods
include beer and cigarettes, and other goods whose consumption
creates negative externalities to the society. In Tanzania apart from
the traditional excisable goods soft drinks are excisable for revenue
generation purposes. Excise duty is charged on specific and/or ad-
valorem rate. The minimum excise duty rate is 10% and the
maximum rate is 30%.
c) Stamp Duty: Is levied at the rate of 2% of the turnover for the
traders with composition agreement with the TRA while those using
adhesive stamps affixed on cash receipt pay 3.6% of the sale value.
The duty is paid by businesses, which are not VAT registered.

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d) Motor Vehicle taxes: Apart from taxes on importation, motor
vehicles and other various taxes are collected by the Value Added Tax
(VAT) Department as follows;

e) Registration Tax: This is a tax collected on the first registration of

motor vehicles in the country. The tax is levied at a flat rate of TZS
95,000/= per registration for motor vehicles and TZS 45,000 for
motor cycles but for now motor vehicles tax are charging Nil.

f) Transfer Tax: On transferring the ownership of a motor vehicle the

new owner pays a transfer fee of TZS 50,000= in addition to ensuring
that all taxes on importation have been correctly paid and also fire
rate is charged 10,000.

g) Car Benefit tax: All commercial private companies not involved in

transport business have to pay TZS 100,000/= per vehicle owned per
annum.

h) Foreign Motor Vehicle Permit and Transit Charges: All none

commercial foreign motor vehicles temporally imported into
Tanzania pay a fee of USD 20 per vehicle for every 30 days stay in
the country. Foreign commercial vehicles of up to three axles are
charged in addition a transit charge of USD 6 per 100 km covered.

i) Corporation Income Tax: Corporation Income Tax is levied on

corporation taxable profit for all companies registered and/or
carrying business in Tanzania. The applicable corporation income tax
rate is 30% usually paid in two stages. The provisional tax is paid
based on taxpayers own estimates at the beginning of the business
year; and final tax is paid after the official assessment of the total
income in the respective year of income.In arriving at taxable gains

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 or profits a deduction is allowed for all expenditure incurred in such
year of income wholly and exclusively for the production of such
income.Also annual wear and tear deductions are allowed for
machinery owned and used for the business. The linear method of
depreciation is used and the following rates are applicable. 37.5% for
the first class of machinery, which includes tractors, combine
harvesters, heavy earth moving equipment and such other heavy self
propelling machines of a similar nature. 25% for the second class of
machinery which is other self-propelling vehicles including aircraft.
12.5% for all other machinery including ships. Depreciation
allowances for buildings are 4% and 6% for industrial and hotel
buildings respectively. Also a 20% bonus investment allowance is
allowed for expenditure on industrial and hotel buildings and
machinery installed therein.In the agricultural sector 20% allowance
is allowed for construction of all farm works.100% allowance for
capital expenditure on cultivation and planting of permanent crops
and 100% allowance for capital expenditure on prevention of soil
erosion over agricultural land.
j) Personal Income Tax: Is a tax on resident persons annual income
obtained world-wide and on the Tanzania source income for non-
residents. The income includes any gains or profits from business,
employment or servicesrendered, dividend income or interest earned
from any bank operating in the United Republic. The Personal
Income tax is charged on progressive rates and there are twelve
income bands with a threshold of 20,000. The minimum marginal tax
rate is 7.5% while the maximum marginal tax rate is 35% for
incomes in excess of 700,000. The income tax bands for personal
income tax purposes are given in Table1.The personal income tax in
Tanzania is collected using two methods. For salaried employees the
tax known as PAYEE is withheld by employers, using the above
schedule on payroll preparation. The withheld tax is submitted on
monthly basis to the Commissioner of Income Tax. The second

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 method is used for sole traders and self-employed individuals where
assessment of their annual incomes is made based on filed returns.
They are then required to pay personal tax on quarterly installments.

k) Housing (Payroll) tax: This is a tax on the gross wage bill of private
employers with four or more employees. Currently the tax is levied at
the rate of 4% of gross wage bill. This tax is not explicitly deducted
from employees salaries.

l) Withholding Taxes: Withholding is a scheme of tax payment

administered by Income Tax Department whereby taxes are withheld
at source. The taxes withheld are off set against final personal and
corporation income taxes on resident tax payers, where as such taxes
are final charges in respect of non-resident taxpayers. In the case of
Interest, dividends and rental income the withheld taxes are final for
both residents and none residents. It is charged 10% from the
landlord.

m) Interest: Any person earning interest income exceeding TZS

150,000/= is liable for withholding tax on interest. The applicable
rate is 15% of the liable income for both residents and none residents.
The financial institutions are withholding agents for this tax.
n) Dividends: A dividend income paid to a resident from a company
listed in the Dar Es Salaam Stock Markets is liable to a dividend tax
at the rate of 5% and 15% for unlisted companies. Dividend income
paid to none resident is charged at 20% regardless of the listing status
of the paying company. Dividend tax withheld at source is a final tax.
In the mining sector dividends paid to none residents attract
withholding tax at the rate of 10%. The companies declaring
dividends are the collecting agents.

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o) Rents: Rental and lease income in excess of TZS 500,000/= per
annum is liable for a withholding tax, which is also a final income
tax for this category of income. Rental income is charged at 15% for
residents and 20% for none residents.

p) Management and Professional Fees: A payment made to a none

resident person, other than payment made to an employee by his
employer, as a consideration for any services of managerial, technical
or professional nature is liable for a withholding tax at 20%. For the
mining sector a withholding tax of 3% is charged on subcontracts and
management payable fees if and only if the management fees do not
exceed 2% of the operation costs.

q) Goods and Services: Charges on provision of goods and services,

excluding VAT charges, attracts a withholding tax of 2% per
transaction for all transactions equal to or in excess of TZS
100,000/=. The purchasers of such goods and services are the
withholding agents of the government. Holders of mining certificates
are exempted from payment of domestic withholding tax on goods
and services although they have to withhold the tax from their
suppliers.

r) Other Withholding taxes.

i. Other withholding taxes include

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 ii. Tax Source Rate

iii. Royalties Fees 20%

iv. Pension for none residents 15%

v. Overland Transport (residents) 4%

vi. Overland Transport (none residents) 15%

vii. Shipping Tax 2%

viii. Leased Aircraft 10%

ix. Insurance Commission 7.5%

s) User Charges:

a.Airport Departure Service Charges: is

levied on resident and none resident passengers
boarding aircraft at the United Republic of
Tanzania airports. Travelers within the United
Republic of Tanzania pay TZS 2,000/= per trip
while passengers travelling outside the country
pay USD 20 per trip. The airport departure
service charge is included in the price of the air
ticket and the travelling agents are, therefore, the
collecting agents for the government. Transit
passengers and children under the age of 2 years
are exempted.

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 b. Port Departure Service Charge: Is
levied to passengers travelling within or
outside the United Republic of Tanzania by
shipping vessels. Resident passengers pay TZS
500 while none residents passengers sailing
using the United Republic of Tanzania ports
pays UDS 5 per trip. This charge is also included
in the price of the ticket.

ii) Administer effectively and efficiently all the revenue laws of the
Central Government.
iii) Promote voluntary tax compliance.
iv) Improve the quality of service to the taxpayers.
v) Advice the government on all matters related to fiscal policy.
vi) Counteract fraud and other forms of tax evasion.
vii) Produce trade statistics and publications.

Improve domestic resource mobilization to enable the government fulfill its

social obligation TRA is determined to make Tanzania self-sufficient in
terms of budgetary requirements and reduce development partners
dependency Tanzania Revenue Authority (TRA).

1.3 Vision Of Tra

i. To increase revenue to GDP ratio to 19.9% by 2018; in response to
Government policies of increase domestic revenue contribution and
revenue yield to sub Saharan averages, TRA in the next five years
aims at increase the revenue yield to 19.9%. This will be achieved
through improving efficiency in tax administration and widening the
tax net in order to collect more revenue especially from specialized
sectors of mining, oil and gas telecommunication, tourism,

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 construction, real estate, financial sector, High net worth individuals
(HNWI) and incomes from the informal sector.

ii. Revenue collection targets are met consistently.

iii. Service delivery that meet customer expectations.
iv. Fair and consistent application of tax laws.
v. Skilled and qualified staff with high levels of integrity.
vi. To build tax modern.

1.4 Mission Of Tra

To render effective and efficient tax administration which promotes
voluntary tax compliance by providing high quality customer service
with fairness and integrity, through competent and motivated staff.

1.5 Core Values For Tra Staff

TRA core values are a handful of moral boundaries within which TRA
operates. They define TRA personality and are ethical standard by which
TRA would be measured. The values are a commitment to the stakeholders
and are incorporated into all actions taken by the organization.

a) Accountability: we create and sustain an organization that values

and promotes accountability.
b) Integrity: We believe in being fair and honest in all our dealings
with taxpayers and other stakeholders.
c) 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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 SUMMARY
During my practical training I have learnt and observed many skills as
regard to the usefulness of field practical and wok environment. The
following are the findings from my field practical:

I have widened skills/knowledge of my profession through field practice by

complementing with theoretical training

Theoretical training provides principles, guidelines and procedures with little

exposure to practice as a result understanding is difficult or slow compared
to practical training where one is involved physically to real situation.

For effective understanding in addition to theoretical training practical

training is very necessary.

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 CONCLUSION
In nutshell, there is a need for the students to understand that the important
thing in your ability to use theory to solve practical problems. The
Universities has to play its role during placement process like educating the
organization of placement the intended results of the training so that the
program yields what is expected. Also it shows that the distinction between
accounting and finance is not that much pronounced in practice as it is taken
theoretically because both of them can be trained to perform the same work
in accordance with the need of the organization. What was also noted is the
importance of information technology in business firms. In this regard a
need to improve the students IT skill is needed to enhance the competence of
graduates in the labor market.

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 RECOMMENDATIONS

Recommendations here are based on the finding and discussion of this

report.

The organization should provide some seminars and short courses to make
sure the employees are able to update their skills.

There should be a segregation of duties; one person should not be allowed to

deal with transactions from the beginning to its end.

Promotion of accounting staff through various methods e.g. Bonus, overtime

payment to employees to encourage them work hard

Imprest payee should be encouraged to retire the imprest they take

Recommendations here under are based on the finding and discussion of this
report. The organization should provide some workshops; seminars and short
courses to make sure the employees are able to update their skills.

There should be a segregation of duties; one person should not be allowed to

deal with transactions from the beginning to its end.

Promotion of accounting staff through various methods e.g. Bonus, overtime

payment to employees to encourage them work hard

Imprest payee should be encouraged to retire the imprest they take

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REFERENCES

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