TRA’s latest announcement that it will seriously start collecting taxes on house rentals and rentals on other business structures should have been made yesterday. In other words, this exercise aimed at boosting tax collection should have been implemented a long time ago.
Although we don’t have statistics, yet house rentals is an area which could help the tax authority realize its target of collecting taxes to the tune of 15.1tri/- this year compared to last year’s collection target of 13.32tri/-.
It is obvious that a huge percentage of urban residents live in rented houses, and those doing business have rented business structures such as stalls, warehouses, etc.
On Friday, TRA Director of Taxpayer Services and Education Richard Kayombo hinted that the tax authority will do a house to house assessment to establish the amount of rents being charged by landlords and landladies.
He said the success of this exercise will depend on the cooperation between the landlords and the tenants who will be required to show their rental agreements. The rental agreements will determine the amount of taxes to be charged.
Trust should be the essence of this noble exercise. Landlords and landladies should be trustworthy and transparent. They should not collude with their tenants in writing fake rental agreements, denying the tax authority its due collection.
At the same time TRA should practice sobriety when fixing the rates of taxes to be charged on rental houses because some of the houses, especially in squatter areas, do not qualify to be rated as houses.
These so called houses, which dot most of urban centres across the country, are alarmingly dilapidated and asking the landlord or landlady to pay taxes could be akin to getting milk out of a stone.
We also commend TRA for other efforts it is taking to widen tax collection, including registration of new businesspeople with the Taxpayer Identification Numbers (TIN). The new registration will entail taking finger prints and other basic information.
TRA’s planned visits to all employers to establish whether they paid the Pay As You Earn (PAYE) according to the number of employees as per their pay rolls is also good music.
“There might be some cheating with some employers when it comes to the number of their employees in order to avoid paying the required PAYE,” Kayombo said Friday.
At the same time, the tax authority has improved its digitalized paying system to make payment of taxes friendlier.
As TRA is setting to enhance collection of government revenue, we are appealing to the same government to ensure that the taxpayers’ money is well spent beyond reasonable doubt.
We expect to see good roads, we expect to see our hospitals stocked with medicines, we expect to see our schools stocked with enough textbooks, and we expect to see safe and clean water coming out of taps.
Revenue from taxpayers should be able to lift this country out of the myriad development challenges it is facing.
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