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Tanzania’s tax authority releases bank accounts frozen over tax issues

23 May 2021, The Citizen
Tanzania’s tax authority releases bank accounts frozen over tax issues

Relief as TRA releases frozen bank accounts, but won't return the cash

The Tanzania Revenue Authority (TRA) said on Friday it has unfrozen all individual and business bank accounts that were frozen over tax issues.

However, the Taxman said the deposits in the accounts would not be returned to holders as it was used to pay off debts owed by government institutions.

Addressing members of the Tanzania Editors Forum (TEF), TRA’s Taxpayer Education director Richard Kayombo said the authority has now put in place arrangements for negotiations and agreements on how the traders could pay their pending debts.

“We now strive at establishing good and sustainable relationships. Every now and then we make improvements on the ways of working collaboratively for to development of our country,” said Mr Kayombo.

He said the law gives room to any party holding grievances to take them to appropriate channels to seek settlement and justice.

TRA comment comes hardly a month after President Samia Suluhu Hassan warned that freezing of bank accounts and harassment of traders have been forcing businesses out of Tanzania.

She said some of businesses had even relocated into neighbouring countries as others were forced to close down.

President Hassan said although the law allowed TRA to access the money in the frozen accounts, her government would not go for this method in tax collection, but instead would seek to cultivate good working relationships between the tax authority and the taxpayers.

President Hassan made the statement on April 1, 2021 after swearing in ministers and deputies at Chamwino State House in Dodoma, urging Finance Minister Mwigulu Nchemba to expand the tax collection base.

For the past five years, there were complaints from traders about their accounts being closed and their monies taken by the TRA or government institutions to cover the debts.

The traders also complained over TRA’s task force that was too aggressive in tracking tax arrears from various businesses.

The task force was alleged to have taken money from the bank accounts of some traders without negotiations while other traders claimed their money had been taken after they were bullied.

One of the businessmen who complained about the freezing of their accounts was Mr Freeman Mbowe, who recently said his account was opened immediately after President Hassan’s remark, but it had no money remaining.

Mr Mbowe said the account had more than Sh500 million while making it clear even the money he was paid by Parliament as sendoff was taken.

Regarding the use of the task force, Mr Kayombo, said the matter has been worked out and they would now continue with the negotiations approach and agreeing on the repayment timeline and rates.

“This approach of freezing accounts has no space for now because we want to build good relationships with the traders and allow them to continue with their business without interruption while the government gets its taxes” he said.

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