System to Monitor Mobile Cash will provide higher revenues for the government
By Angela Collings
The Tanzania Revenue Authority (TRA) has announced that it will install a system to monitor earnings from all telecommunications products and services including airtime on local calls. These are currently not captured in Tanzania’s Telecommunication Traffic Monitoring System (TTMS).
Telecommunications is one of the fastest growing sectors in Tanzania but its contribution to the economy is still low. In 2015 the sector grew by 12.2% but it only contributed 3.6% of the country’s Gross Domestic Product (GDP). The increase in growth is attributed to an increase in the amount of airtime used by mobile phone customers and the expansion of broadcasting and Internet services in the country.
Technology has assisted the TRA to improve revenue collection from the mobile phone service operators after it installed a system that monitors data and money transfers. The new monitoring system will complete another piece in the revenue collection puzzle. Having efficient and transparent systems in place will ensure that there is mutual trust on both sides—government and telecommunications operators—and that way, higher amounts of revenue will be realised from the estimated 39 million mobile phone subscribers in Tanzania.
The TRA cited the example of one operator who had been paying an average of Sh250 million per month in excise duty, who paid Sh1.48 billion in July alone. The new system enabled government officials to compare reports generated by the system and those submitted by the respective companies.
Another operator that has been paying an average of Sh360 million per month parted with Sh1.9 billion in the same month. Telecommunications is one of the areas that face complaints because the operators make billions but pay small amounts of tax. In fact they even boast about it. This means that more than Sh3 billion was collected from only two telecommunications firms in the country in July alone.
The improvement in revenue collection may have been influenced by the Finance Act of 2016, which increased taxes like the excise duty on mobile money services, but monitoring is also extremely important so that government does not have to rely on the accuracy of reports in a self-declaratory system.
The importance of technology to the revenue authorities in emerging countries cannot be over-emphasised. Until technology is fully understood, it is not always favoured but once the revenue-assurance solution becomes clear, governments can hardly dismiss it lightly. These systems have the ability to aggregate huge quantities of data and protect the revenue due to government.
Much has been written about the power and potential of Big Data and predictive analytics. Global challenges and developments are putting more pressure on key business sectors that are sensitive to economic cycles. As a result, the insights gathered from Big Data can help solve some of the biggest global business challenges. and many of these are also applicable to the sphere of government and policy-making.
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