CHAPTER 1: INTRODUCTION

Before the establishment of TRA in the year 1996, tax administration functions were
being administered by the three independent tax departments under the Ministry of
Finance. During the 1996/97, the Government fiscal policy was set to enhance
revenue collection and improve expenditure management through expenditure control
measures aiming at restraining the fiscal deficit. On the revenue side the measures
that were implemented included the strengthening of tax administration through the
establishment of the Tanzania Revenue Authority (TRA).

The Tanzania Revenue Authority Act, 1995 established the Authority under the
general supervision of the Minister for Finance and started operations in July 1996.
The Authority is a semi-autonomous agency of the Government, responsible for the
administration of the Central Government taxes as well as several non-tax revenues.

TRA Mbeya Regional Office was also established in the same year. The revenue
departments at the Ministry of Finance had their office in a building in Mbeya which
is now the headquarters of TRA at the region. TRA Mbeya administers all district
offices which are Mbozi, Kyela, Mbarali, Chunya, Tukuyu, Ileje and Kyela. Two
boarder offices are also under TRA Mbeya office; these are Tunduma and Kasumulu
boarders.

As a result of the establishment of TRA and the proper implementation of strategic

plans, voluntary tax compliance is growing and performance in Government revenue
collection has been improving each year.

! "

TRA is a government owned organisation whose main roles are to collect revenue
and advice the government on fiscal and taxation policy. Tax is the main source of
Government revenue, a need to cost-effectively and efficiently administer the
assessment, collection and accounting for all the central government tax revenue led
to the establishment of TRA. It also has a responsibility to administer all the revenue
laws of the country, thirteen laws in total. TRA is divided into departments which
function together to ensure that government revenue is collected and it is advised on
fiscal policy.

! # "

All functions of TRA are managed by the various departments of TRA. These
departments are grouped into two, revenue departments and supporting departments.
The following departments function at the Mbeya Regional Office;

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 $ % & '

• Domestic Revenue Department; collects revenue from domestic sources. All

taxes provided they come from domestic sources are dealt with here.
• Customs and Excise Department; collects international revenue through its
taxes which are the Import Duty, Excise Duty on Imports, VAT on Imports,
Fuel Levy (Importation of petroleum)
• Tax Investigations Department; this department deals with investigation of tax
evasion and avoidance. Once investigations are complete, payment of
prescribed tax and/or penalty then follows.

Large taxpayers department only functions at the head office Dar es Salaam. It deals
with taxpayers with turnover exceeding one billion Tanzanian shillings. Such
taxpayers in Mbeya are transferred to headquarters for tax purposes.

( "%&&)' * & '

• Finance Department; this is a core department which collects, account for and
report the tax revenues. It also deals with expenditure management.
• Human Resources and Administration Department; deals with general
administration of TRA and enhancing positive working environment and
value to employees.
• Information Systems Department; this department implements and manage
ICT systems so that they are “business-led” and not “technology driven”.
• Legal Service Department; provides in-house services by handling all cases
filed by or against the Authority, coordinating matters relating to the Board,
administering tax exemptions and reviewing the laws with a view to
recommend amendments to such laws.
• Taxpayer Services and Education Department; provide the public with the
latest tax information, helping to ensure that tax compliance is as effortless as
possible and that nobody falls foul of the tax laws through negligence

Internal Audit department and Research, Policy and Planning department function
from the head office in Dar es Salaam. Officials from the headquarters visit Mbeya
regularly to accomplish their duties.

(# + " "

Major services of Tanzania Revenue Authority are shaped by the changing

government policies. The main role of TRA still remains to collect the government
revenue and advice it on the fiscal policy of the country. TRA is a service giving
government entity with its primary clients being the government, taxpayers and the
general public. Its services include;

• Assessing, collecting and accounting for all Central Government Revenue,

• Administer effectively and efficiently all the revenue laws of the Central
Government,
• Advise the Government on all matters related to fiscal policy,
• Promote voluntary tax compliance,

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 • Improve the quality of services to the taxpayers,
• Counteract fraud and other forms of tax evasion,
• Produce trade statistics and publications.

Other services to TRA clients depend on the needs of such clients, they may include
investment friendly tax administration, education to taxpayers, information to
pressure groups, publications, etc.

, " -"

TRA is under the direction and control of a Board of Directors, which is headed by a
Chairman who is appointed by the President of the United Republic of Tanzania. The
board is responsible for the formulation and implementation of the policies of the
Tanzania Revenue Authority. It is also responsible for advising the Minister for
Finance on the fiscal policy of the country and tax matters in particular. The Board
consists of ten members including the Chairman. Five members are ex-officio, that
is, they sit on the Board by virtue of their positions. These are:

(i) Permanent Secretary - Ministry of Finance (Union Government)

(ii) Principal Secretary - Ministry of Finance (Zanzibar Government)
(iii) Governor of the Bank of Tanzania.
(iv) Permanent Secretary- Presidents Office Planning and Privatization.
(v) Commissioner General of TRA.

In addition to the five ex-officio members, the Minister for Finance also appoints
from the public other members to the Board on the basis of their professional
knowledge, experience and competence in the relevant areas of finance, commerce or
economics. The tenure of office for the members is three years and the non-ex-
officio members can be re-appointed only once.

The Commissioner General is the Chief Executive of the Authority. He is

responsible for the day-to-day operations of the Authority subject to the general
supervision and control of the Board. The Commissioner General is assisted by a
Deputy Commissioner General and heads of departments in performing his duties.
Some Heads of Departments are in turn assisted by Deputy Commissioners /
Directors at the head office level.

, # . '* ) " '%/ %'

TRA Mbeya Office is headed by the Regional Manager who is responsible for
overseeing all activities at the region and supervision of TRA employees. The
Regional Manager is assisted by three assistant regional managers who are
responsible to manage the revenue departments. The assistant managers are the
Assistant Regional Manager – Audit, Assistant Regional Manager – Debt
Management and Assistant Regional Manager – Customs and Excise. Under their
supervision are other heads of departments who are the Regional Accountant,
Regional Supplies Officer and the Regional Human Resources Officer.

Sections are headed by heads of sections who report to Assistant Regional Managers
functionally but to Regional Manager administratively. These include, the Head, Debt
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Management Section, Head, Audit Section, Head, Legal Services Department and
other heads of small sections within departments.

0 "1 " "

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 # - 1 " "

2 # !- "

The total number of TRA employees in Tanzania is about 2000. Among these, only
83 employees are working at the Mbeya Regional Office. 42 employees are working
at the domestic revenue department, 16 at the customs and exercise department, 10 at
the tax investigation department, 9 at the administration office and the rest 6
employees are working at the accounts office of the finance department. The
employee turnover from Mbeya to elsewhere is about 0.08% while from elsewhere to
Mbeya is about 0.09% which are all quite small rates.

A recent audit conducted at TRA by external auditors showed a deficit of about 3000
employees. Measures have started being taken and new employees are being recruited
every year. The current success of TRA is attributed by the few employees who
maintained the core values as indicated by the TRA’s Second Corporate Plan

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 2 - " "

The core values state how employees are expected to relate to their clients, colleagues
and the TRA itself, and how they will accomplish their work in the pursuit of
carrying out the mission and achieving the vision of the Authority

Core Values for TRA employees:

• Are BUSINESS-ORIENTED and PROFESSIONAL in appearance and approach

• Are FAIR and ACCOUNTABLE for the decisions they make in their areas of
responsibility

• Are PROMPT in the delivery of services and are ACCESSIBLE

• Treat taxpayers, colleagues and stakeholders with DIGNITY and RESPECT

• Are HONEST and have INTEGRITY in their dealings

• Are COMMITTED and MOTIVATED to the achievement of TRA goals and

objectives

• Are COMPETENT in the delivery of high quality services

3 "

TRA is a professional organization dealing with the collection of taxation. The main
activities of TRA are therefore concerned with administering various tax laws of the
country and to advice the government on the fiscal policy. The following list of TRA
functions explains the kind of activities they are involved with;

3 % / ) )4 % )' .

• Assess, collect and account for all Central Government Revenue

• Administer effectively and efficiently all the revenue laws of the Central
Government
• Advise the Government on all matters related to fiscal policy
• Promote voluntary tax compliance
• Improve the quality of services to the taxpayers
• Counteract fraud and other forms of tax evasion
• Produce trade statistics and publications

Basically, TRA’s main role is to administer various tax related laws. TRA activities
include checking compliance to such laws. These laws or sections within some laws
have revenue related components which should be under TRA’s concern. Such laws
which are administered by TRA through its activities include;

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 1. The Income Tax Act, 2004
2. The Value Added Tax Act, 1997
3. The East African Community Customs Management Act, 2004
4. The Stamp Duty Act, 1972
5. The Road and Fuel Toll Act, 1985
6. The Airport Service Charges Act, 1992
7. The Motor vehicle (Tax Registration and Transfer) Act, 1972
8. The Port Service Charges Act, 1973
9. The Vocational Education and Training Act, 1994
10. The Foreign Commercial Vehicles Licensing Act, 1970
11. The Tanzania Revenue Authority Act
12. The Hotels Act
13. The Tax Revenue Appeals Act
14. The Gaming Act
15. The Excise Tariff Ordinance (Cap 332),
16. The Land Act, 1999
17. The Pools and Lotteries Act, 1967"

5- - -

The use of Information and Communication Technology ICT facilities has a great
potential to support development and is a key contributor to productivity growth in an
organization. Employees are vital players in changing work practices and contribute
to the growth of the Authority by utilising fully the available ICT facilities. TRA uses
software such as ASYCUDA++, CMVRS, Motor Vehicle Registration, VIPS, ITAX
and TIN. These have shown how ICT can be used to contribute to the first strategic
goal of the Second Corporate Plan, which is to increase revenue collection in a cost
effective way.

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The most celebrated success story was the implementation of the Motor Vehicle
Registration System to replace the old manual system. The re-registration of motor
vehicles required a centralised system with connectivity from all registration centres
to prevent fictitious registrations.

Another successful story was the provision of seamless communication network for
major revenue centres. The network, which is the backbone for all revenue systems
such as ASYCUDA++, CMVRS, TIN and ITAX, has enabled communication and
electronic data interchange for Customs outposts such as Tunduma and Kasumulu,
also Namanga in Arusha Tax Region.

6 - "

In the course of doing its official business TRA interacts with people and institutions
that have interest and stake in the operations of the Authority. These are the
stakeholders of TRA and can be classified into two main categories namely internal
and external clients.

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 6 '

The TRA community, which is composed of mainly employees, form one of the very
important resources of the Authority and their contribution to the success of TRA is
recognized. TRA management and the Board support employees and in return,
employees are expected to demonstrate their ability to live up to the core values for
staff.

6( 7 '

These are the individuals and bodies outside TRA whose relationship with the
Authority is vital and the basis of existence. These clients include the following:
Taxpayers, Tanzanian citizenry, the business community, the donor community, the
Government, NGOs and other pressure groups. They are both the means and ends for
which TRA was established. TRA anticipates increased demand for better services
from its external clients and employees are expected to spare no effort to meet their
expectations.

8"

Strategic direction of the Tanzania Revenue Authority is being guided by the

corporate plans. Currently TRA is working to implement its Second Corporate Plan
which is to end in this year, 2008. Development of the second Corporate Plan for
Tanzania Revenue Authority (TRA) follows expiration of the preceding plan and the
expressed need by the Government to have a Second Generation of reforms to make
the Authority investor and taxpayer friendly and to collect revenue to capacity levels.
The first plan was developed and started to be implemented in 1998/9 fiscal year up
to the end of 2002/3 to carter for development needs of the Authority during the
initial period of its evolution. The main focus of the first plan was institutional and
capacity building.

8 -"

The current plan aims at strengthening operational efficiency and effectiveness; and
boost revenue collection to a more generally acceptable level commensurate with
international benchmarks. This second Corporate Plan for the TRA spells out the
Mission, Vision, Strategic Goals, and Objectives to realize the envisaged vision. It is
a guide that the TRA will follow from the fiscal year 2003/4 to 2007/8.

8 9" "

The vision of the Tanzania Revenue Authority is to build

“A Modern Tax Administration”

8 ( 9" # ""

The Mission spells out what TRA is in business to do and how is it going to do that
business. In other words it encapsulates the purpose of being of the Authority and
contribution of its employees in building the national economy.

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To be an 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

TRA is committed and dedicated to become a modern tax administration by the year
2008. A modernised tax administration is considered as one that has a strong
enforcement capacity delivered by highly qualified, motivated and committed staff;
has an integrated approach to the administration of taxes; is computerised; uses
modern practices and processes; and enjoys high levels of tax compliance by creating
a taxpayer friendly environment.

8 ," -" + "

The strategic goals have been formulated to respond to the needs of TRA’s business
and its clientele. They are derivatives of the Mission and Vision and are craved
towards realisation of tangible results.

The following are the strategic goals and objectives to be realised in the course of
implementing the Second Corporate Plan.

a) To increase revenue collection in a cost effective way

• Broaden the tax base

• Improve the enforcement of tax laws
• Monitor and control cost of revenue collection.
• Modernise processes and systems

b) To integrate TRA operations

• Strengthen the Large Taxpayers Department

• Integrate Tax Operations
• Strengthen Customs Administration
• Integrate Tax and Customs systems

c) To provide high quality and responsive customer service

• Enhance the level of tax knowledge to taxpayers

• Improve customer service

d) To promote tax compliance through fair, equitable and transparent

application of tax laws

• To provide education to taxpayers

• Enhance administration of the tax laws
• Treat taxpayers fairly and in a consistent and transparent way

e) To improve staff competence, motivation, integrity and accountability

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 • Improve skills and level of professionalism
• Upgrade the level of staff benefits and working environment
• Strengthen management controls

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 CHAPTER 2: ACTIVITIES PERFORMED

( !- #

Practical training took place at the Tanzania Revenue Authority Mbeya Office.
Within TRA the departments involved were the Tax Audit Section and later Accounts
Office and finished at the Debt Management Section.

(( " " "! #

At the end of PT, three sections in total were involved for training. Audit Section
tasks and duties had a research/problem solving perspective. Those at the Accounts
Office were mostly routine with few non-routine cases. The Debt Management
Section had a mixture of routine and problem solving activities.

(( : " (1st to 4th Week)

Audit is a routine activity of the TRA under the self-assessment system. It promotes
voluntary compliance with tax laws and regulations due to the customers’ fear of
being selected for an audit work. A taxpayer can be selected for audit at any time.
Being selected for an audit does not indicate that an offence has been committed.

A tax audit is an examination of a taxpayer’s business accounts and financial affairs

to ascertain that tax reported and paid are correct and are in compliance with tax laws
and regulations. TRA carries two types of tax audit, namely Desk Audit and Field
Audit.

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A desk audit is held at TRA office. It is normally concerned with straightforward

issues or tax adjustments, which are easily dealt with through correspondence with
taxpayer’s documents. A taxpayer may be called for an interview at the TRA office or
being given a notice requiring to produce information required.

(( ( < %<

A field audit is the one that takes place at taxpayer’s premises. It involves checking of
the taxpayer’s business as well as non-business records. A taxpayer will normally be
given a prior field notice of a field audit.

Taxpayer Selection for Audit

Taxpayer’s selection for an audit does not indicate an offence has been made,
however there are several ways which an auditor may use to select a taxpayer. Such
ways include;

i. Selection through risk analysis

ii. Manual checking of return forms

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 iii. Examination of third party records, normally arising from audit or
investigations of other taxpayers
iv. Previous records on return forms compliance
v. Selection based on specific industries
vi. Selection based on specific issues peculiar to a particular group of tax
taxpayers.
vii. Selection based on locality.

Audit Outcome

i. Payment of tax

An audit is conducted to ensure compliance to tax laws. An audited taxpayer may

now pay tax as indicated by the audit process. Taxpayers are not allowed to pay audit
officers but must be made to the Commissioner through an appointed bank or office.
Such tax in Mbeya is paid through NBC, CRDB, NMB and Stanbic Bank.

ii. Penalty

If it is discovered during an audit that there has been an understatement or omission

of tax, a penalty will be imposed according to the law being applied. Penalty shall
also be imposed for aiding or abetting another person to commit an offence of
omission or making misleading statement as provided under section 102 of the
Income Tax Act, 2004.

Duties performed at the Audit Section

The main task/duty given by the Audit officers was mainly the examination of
records part. Practical training period was only enough to examine records of only
four clients in total. This was during a one month stay at the section.

1st Client

This client was chosen for tax audit to determine whether he is compliant to various
tax laws especially the income tax act 2004 and the value added tax act 1997.
Normally an officer can not audit all financial sectors of the taxpayer due to time
constraint; instead a highly risk area was chosen for tax audit. For this customer, sales
records were suspicious and hence were chosen for auditing. Sales records are used in
the calculation of profit under the income tax act, 2004 and determining the amount
of VAT payable under VAT act, 1997.

A daily sales book was ordered and it was checked for any missing receipts and then
added the total amount appearing in the receipts for comparison with the amount
submitted. It was found that this taxpayer had a lot of missing receipts and the total
amount did not correspond with the one he submitted before. A letter was then
written to call for the missing documents.

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2nd Client

In the same way as the first client, this client was also ordered to submit his sales
information. Sales records were checked and the amount appearing in the records was
added up to see whether it corresponds with the amount submitted. The total amount
found did not match with the amount he submitted for tax revenue. Again the
taxpayer had one entire receipts book missing and he had a turnover calling for VAT
compliance. A letter of enquiry was sent to him to call for the records missing and
necessary steps were made to call for VAT compliance.

3rd Client

Sales record keeping was seen as the leading tax avoidance area. Likewise, this
taxpayer was asked to submit his sales records for examination. All these clients had
the same tendency of trying to avoid tax through underestimation of sales figure.
After a thorough examination of his records the same problem arose, some of the
sales receipts were missing and the amount submitted was not correct. However just
knowing a customer records are missing is not enough criteria for an offence, the
customer has to be given a chance for explanation. A letter was also written to this
customer to see whether non compliance was out of fraud.

4th Client

This was a hotel. Field audit understood that the risky area for this customer was the
number of rooms used being reported daily. Instead of calling for sales receipts, cards
signed by customers were called for. They were checked and found out that some of
the days nothing was reported and only few rooms were being reported as used for
accommodation. This taxpayer also had his records showing that all the customers
slept at his hotel for the price of a single day accommodation. The total amount of
revenue found in the cards differed from the one recorded at his sales receipts book.
A letter was written to the client to ask for explanation.

((( " (5th to 6th Week)

The accounts office is a section under the finance department of TRA. The role of this
section is to manage the finance function of the region ensuring that revenue
collections and expenditure are accounted for accurately and timely and in
accordance with the accounting policies and procedures of the TRA and International
Financial Reporting Standard (IFRS). It deals with all matters concerning finances
such as salaries, allowances and accounting for revenue collected from revenue
departments.

((( //)% * 4)' 7 ' $ % ')%* : .

Accounting for tax revenue is a daily activity at the Accounts Office. The task here
was to make sure that all transactions are being accurately recorded. This is done
through a system known as ITAX. This software is used to account for all tax revenue
nationwide, all reports and tax information can then be retrieved from the system
when needed.

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Information that had to be posted into ITAX included bank pay-in slips and bank
statements. All bank pay-in slips used to deposit money into the various tax revenue
accounts during the day were posted and then reconciled with the bank statements.
ITAX processes the information into different outputs such as reports and general
record keeping.

( ( ( ( !' & ' * < */ ));

Keeping the cashbook up to date is a primary activity of the accounts office. At TRA
Mbeya all cash transactions are made through the bank directly, this in turn makes the
cashbook contain only cash at bank therefore only float report and bank statements
are used to update cashbook. After entering data into cashbook, it was to be verified
before closing the books.

( ( ( , !' & ' ) )4 ; ' /) / )

Manual reconciliation of bank statement balance and cashbook balance is also done at
the accounts office. The last balance at the cashbook is compared with the last
balance at the bank statement. Any difference in the two amounts has to be accounted
for in an attached schedule.

(((2 ) & ) < &' & ' ) )44) ' &)'

Float report keeps track of all transactions which are on the way to the banks or are in
the way to TRA from the banks. This is done to ensure that all money is traced and
monitored, this helps to reduce the amount of money remaining locked up as float.
The duty here was to enter data into MS Excel and enter the necessary formula to
calculate the amount of float. This was done for all TRA offices including district
offices which are Kyela, Tunduma, Kasumulu, Mbozi, Chunya and Tukuyu. All float
of the region was then found and accounted for.

( ( ( 3 !' & ' ) )4< < ' 4 ' ' &)'

All tax revenue collected has to be transferred from TRA to the Bank of Tanzania.
This is periodically transferred from the selected Banks where tax revenue is
deposited to the BOT and is done by the banks themselves. All cash transferred to
BOT is traced in the bank statements. All this data is extracted and a detailed
transfers report is created. Debits in the bank statement were to be identified. These
were the transfers to BOT; they were then reported in the form of a detailed transfers
report.

( ( ( 5 !' & ' ) )4& . $)%/ '

Payment vouchers are used to certify payment of cash from TRA to others such as
employees or outsiders. The process of completing a payment voucher starts by an
accountant issuing the voucher and signing before going to the manager for
approving. The duty was to check the correctness and record the types of payment in
a book before they are finally sent to the manager for final signing. After the manager
passes the voucher the final process is to print the cheques and deliver them to the
payees.
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((, # # " (7th to 8th Week)

This section works under the domestic revenue department and it was created so as to
make sure all tax due is paid by the customers. Other section like the audit section
will determine the amount of tax a customer is to pay and hand it over to the
personnel in the section for enforcement.

This section also deals with other matters such as new business registration, tax
assessment and management of employment taxes. The placement here was at the
new business registration section, assessment section and in the management of
employment taxes.

((, = % * ' )

At this section, the main task was to register new businesses for tax purposes.
Taxpayers came to the office seeking to register their business as the law requires
them to do. This is compulsory for every business person. Taxpayers were
interviewed and some forms were filled so as to collect their information.

A taxpayer was required to bring passport photos and house rent agreement for
assessing rental tax. The photos and information given were used to register the
business. After finishing at this section, the taxpayer had to go for TIN registration
within the same department where another person was in-charge. Thereafter a file
was opened for storing taxpayer’s information.

((,( 7 " / )

This section dealt with assessing taxpayers for the amount of tax they are supposed to
pay. Preliminary assessment was done where judgement was out of description given
by the taxpayer during the interview. There were authorised staffs at this section who
were responsible for finalizing tax assessment. They did this by either further
interviewing the taxpayer or physically visiting taxpayer’s business place. Tax
determined by these personnel was final and the taxpayer was required to comply, in
case of non satisfaction the taxpayer was required to appeal through the regional
manager.

((,,! . ) / <! .

All assessed taxpayers are supposed to start paying tax due immediately and this
section is responsible for issuing payment notice (deposit slips). All tax payment was
done through selected banks and deposit slips were issued by TRA through a special
agreement with the banks. Returning taxpayers were also in this section. They were in
need of deposit slips for payment of tax. Late returning taxpayers were liable for
penalty as stated in the laws. Such penalty was assessed and included in the amount
to be deposited to the bank by the taxpayers.

((,2 * ' ) " / )

All taxpayers eligible for payment of value added tax are dealt with here. The VAT
act of 1997 requires that all businesses with an annual turnover over 40 million
Mbwile Patrick R | Practical Training Report 15
Tanzanian shillings are eligible for VAT registration. This is another important tax
administered by TRA. Training at this section was short but the whole process was
followed up closely. The section had a responsibility of knowing all eligible
customers and making sure that they pay VAT according to the law and deregistration
of businesses either exempted or no longer qualifying for VAT payment.

((,3 & ). 7 " / )

This section is responsible for managing employment tax collections. The main duty
of the section is to receive employment tax return forms and check for correctness
and making sure tax due is paid timely. Any person qualifying for employment tax
payment is traced by this section. The employment taxes dealt with herein are the
skills and development levy (SDL), Pay as you earn tax (PAYE) and the Lump sum
tax. Any mistake found due to fraud, a penalty is awarded to the taxpayer concerned.

((,5 7 '' ' " / )

This section deals with debt enforcement. All tax in arrears at the domestic revenue
department is dealt with by this section. This tax in arrears includes customers failing
to pay tax as required and customers required to pay extra tax as determined by the
audit section. Personnel at this section are supposed to keep track of all TRA
taxpayers and make sure that all tax is paid at due dates. Enforcement includes
physically visiting the taxpayers for enquiries and checking that all tax laws are
accurately adhered to. Taxpayers will normally be reminded of the consequences they
are to face in case they fail to comply with the laws.

(, > #

Generally, the working environment at TRA is friendly and independent. All interns
got support from TRA employees as teamwork, cooperation and helping each other is
the main focus. Friendliness made employees and taxpayers more comfortable as it
easily welcome enquiries. The office arrangement of chairs and offices easily enabled
close relationships and easy advice from co-workers. Employees were free to apply
their skills independently and pass only cases beyond their work limit. However, the
Accounts Office works were fully supervised by the regional accountant and team
work was the best strategy of the office. This may be explained by the loads of works
found at the office and the high need for accuracy.

(2 " " > "! #

The duties/tasks performed at TRA were very interesting. The most interesting works
were at the Accounts Office where application of class theory in accounting was used
by keeping TRA accounts in order and up to date. This section had a lot of works to
do due to the importance of keeping good accounts. They mostly constituted reports
which were to be submitted to authorities for Revenue and expenditure assessment.

Other duties were also interesting to some extent; auditing works required one to
judge the correctness of taxpayers’ records which made the process interesting. At
Debt Management Section, what were interesting are the interviews with taxpayers in
the process of registering their business.

Mbwile Patrick R | Practical Training Report 16

(3 # " "! #

Auditing works needed a lot of analytical and problem solving skills more than other
sections within TRA. This is because the works were challenging and a ‘good audit’
meant a lot of dedication to the clients’ records and careful use of skills. Taxpayers
normally cheat so as to pay less tax, it is the duty of an auditor to discover such errors
and judge whether they are out of fraud or mistakes.

Debt management required lots of creativity due to the uncertainty of most debts.
Choosing the proper method to use in collecting a debt, especially bad debts was the
most challenging part of duties at the section. Employees had to occasionally move
physically to taxpayers for recovering debts. This to some extent involves risks such
as corruption.

Accounts works needed a careful use of accounting skills to keep records correct and
updated. A lot of care was needed to keep accounts from errors and fraud. Due to the
importance of these works, reports were needed often to judge TRA’s performance.
Accountants were required to be quick and accurate in doing their works.

(5! - #"

The support and friendly environment of TRA Mbeya made us comfortable and have
fewer problems. However the only problem faced was at the beginning of training
were a single section was offered for training regardless of the many departments
within TRA. The internal supervisor just offered the Audit section as the immediate
and final placement.

The continuous stay at the Tax Audit Section rose awareness of such a situation. For
the sake of widening PT training, the other departments were also seen as equally
important. Proper consultations with the authorities were made and eventually
management allowed and effected rotation. Therefore, at the end of training three
sections in total were involved. These were the Tax Audit Section under the Tax
Investigations Department, Debt Management Section of the Domestic Revenue
Department and the Accounts Office of the Finance Department.

As a recommendation out of this situation, FCM should be advised to make students

produce plans out of their knowledge of the organisation they are going to work with.
This plan should state the departments they are interested to work to. Practical
training coordinator should pass the plans ready for submission at the organisation on
arrival. This should be used in the coming PT trainings.

(6! - :! "

2.7.1 Professionalism: before going for practical training it was expected that
interns would be treated as professionals and that the organisation is set to act
professionally and help employees build and develop their careers. As usual
government employees do not focus much on professionalism but rather on
mere performance of duties. TRA is quite different from other Government
institutions as management was seen to clearly focus on enforcing the pre-
stated core values for employees. However career development was not highly

Mbwile Patrick R | Practical Training Report 17

 emphasized but rather employees were highly restricted in furthering their
studies.

2.7.2 Cooperation and Involvement: any intern would expect a high degree of
cooperation from employees and management and involvement in several
decision making processes. At TRA a lot of cooperation from staff was seen
however, access to the organisation was limited. Interns we were not involved
in weekly conferences contrary to what was expected. Also cooperation from
management was by hierarchy. It was not easy to meet management unless a
high need exists.

2.7.3 Taxation: interest in knowing and learning taxation system in Tanzania rose
high expectations concerning taxation issues within TRA. Such knowledge is
good due to its inclusion in most of higher level studies. TRA was expected to
answer such aspirations. This urge was met due to the fact that TRA
administers all taxes in Tanzania. For this matter it was a perfect placement.

(8 > "-

(8 & ). &') ) ) < = )'; *

For the sake of career development, networking is very important. I learned this from
talking to employees and knowing their success story. Within TRA itself, it does not
only matter how hard one performs the duties but also how one communicates his
hardworking to the relevant people in his career field. This is best done through
networking and employees use it as a basic tool for advancing their career whether
within TRA or outside it. The behaviour of venerating managers and top staff also
speaks of the importance of a good relationship between key employees and people
higher in career ladder.

(8( %<

Attitude is a very important factor for success in any organisation. As I had observed
it, employees with bad attitudes and ways of conduct are not always successful, this is
true for interns as well. Good attitude is the key for employee promotion and
employment. A reputable organisation like TRA needs competent employees with
good attitudes therefore it should not be underestimated.

(8, ' '? ; < $ )&

In choosing an organisation for being employed, one should also see the possibility of
developing his/her career into a professional level. This is important for one’s success
and attainment of higher positions. TRA has a well defined scheme for educating its
employees. However it does not sponsor employees in several studies such as CPA.
Some organisations do not offer good opportunities for advancing career. TRA is also
good for career development due to the existence of competitive employees with
highest qualifications. This is good for challenging other employees to further their
studies.

Mbwile Patrick R | Practical Training Report 18

(82 /% %'

TRA is one of the organisations which have rich organisation cultures. One of the
most prominent practices is a compulsory act of men putting on neck ties and shaving
beads. The dress code was mostly dynamic and based on ones decision but with time
suits for both men and women became a common practice. It was also a culture at
TRA for a late coming employee to greet all fellow staff before continuing with
duties. The manager and other top officials would normally visit employees and greet
them at least once in a week.

I learned that in whatever organisation one is, he/she has to adapt into the dress code
of the area and maintain the organisation culture as a whole. This adaptation shows
how smart an employee is and his/her readiness for change. TRA values its
employees from the time of interview by assessing the ability of such persons to
adapt to the organisation culture. I learned that culture specific requirements should
be known well before interviews.

(@ !" > !

The basic gap between theory and practice is that theory provides a general and wider
base of knowledge to prepare one for practice in his/her profession; where as practice
provides one with the specific skills and knowledge to effectively handle whatever it
is that he/she is doing as a professional. Because of this, theory will often equip one
with much more than he/she might need in effectively carrying out his job. This is
essential in helping one to have broader perspective and hence be able to critically
analyze issues with a wider and deeper approach.

Theory does not include such issues as human relations for instance, how to relate
with fellow employees. Attitudes are also difficult to explain in theory and hence they
are underestimated. Practice has it all in matters of conduct whereas theory is
equipped with skills that are important for analysis and comprehension. It is good that
subjects that teach about relations, communication skills, etc like CL 108 have some
practical components such as physically visiting organisations to help students
understand better.

Another gap between theory and practice is mainly about coping with the changing
organisation aspects such as technology. Normally technology changes faster than
theory would do. Organisations are quick to introduce new discoveries as compared
to theory’s response to changes. Market operations also change fast and often as
compared to classroom teachings. Books should be updated at a rate that corresponds
to the changing business environments. At AC 204, no software use was taught, it
was good to visit TRA and see the lots of software they use to account for taxation as
it is the current technology rather than the old manual system.

The current university curriculum provides another gap between theory and practice.
An example of this is the timing of important subjects that are to be applied during
practical training. Auditing and financial accounting for instance are important for
one to know before heading to practical training. Also subjects such as government
accounting should also be considered for inclusion in the curriculum as the
government is the key business regulator.

Mbwile Patrick R | Practical Training Report 19

( # !- # ! "! "

TRA is the only institution which administers tax in Tanzania. This makes TRA a
competitive organisation. Challenging jobs, exposure and networking opportunities
which are good for developing one’s career are numerous at TRA, this makes it an
interesting place work at.

I believe that the organisation would not hesitate to have me as an employee, for they
really appreciated the level of cooperation, interaction and hard work I displayed
throughout my time with them. However my placement was merely a branch which
has no authority to employ. TRA staff appreciated my work and only advised me to
apply for a job as soon as I finish my studies.

( - !

PT attachment to TRA was relevant for training and it was a rewarding experience.
One of the things benefited was knowledge. As it was my aspiration to go to TRA
and learn a lot about taxation system, TRA offered a good opportunity for this.
Knowledge of taxation may help me in my career in many ways whether I am
employed in a taxation agent or in my further studies such as CPA and Masters
Degree. The new things I learned are evidences of TRA’s relevance.

TRA was also a good place for skills development. Theory itself is not enough, it has
to be accompanied with practice and TRA did this well. I had a good opportunity to
put into practice my AC 204 skills. This helped me to understand better the subject
and be competent in that field. Other skills include an opportunity to adapt into the
corporate environment and culture.

Mbwile Patrick R | Practical Training Report 20

 CHAPTER 3: CONCLUSION

A practical training experience is very important for linking theory and practice. TRA
training that lasted for two months was an opportunity for putting into practice skills
both academic and personal. This has helped in shaping a professional person any
employer would prefer. Tanzania Revenue Authority as a government institution
offered a kind of experience that would make competent to work with in many areas
both in public and private organisations.

Revenue collection, organisation culture, accounting, behaving in an organisation,

work experience, etc are the many things that TRA could offer for learning. A success
story of training at TRA is also attributed by the support received from TRA staff
which includes the challenging works they assigned. Generally, the works included
tax auditing, accounting and debt management.

As practical training is part of the third year B.Com programme under the Faculty of
Commerce and Management, it was itself important and compulsory for the course.
The practical training coordinator, Dr. Benjamin Mutagwaba, UDSM external
supervisor, Mr. Sanga and other FCM staff were also equally important in effecting
the training. For this case, regards goes to all people who have made it a success, this
includes TRA staff for their endorsement.

Career development is a necessity for any business student. TRA was a good place
for in advancing career. Networking, exposure and work experience from TRA have
all contributed in upgrading the most professional qualifications. Also while taking
further studies like CPA and Masters Degree, a lot of knowledge from TRA will be
employed, this ranges from knowledge of taxation to the knowledge of the
importance of such studies in career as seen at TRA.

The importance of practical training should not be underestimated by anyone. It

should be emphasized above most of other courses as FCM has done so far by giving
it a 6 unit value. Students in their side should recognize the essence of its importance.
At TRA it was always considered a good learning experience and an important
milestone in the career ladder.

Mbwile Patrick R | Practical Training Report 21

 CHAPTER 4: RECOMMENDATIONS, REFERENCES AND APPENDICES

2 ## "

A lot of things were experienced as part of training at TRA. Some were absolutely
new while others were common. It is good that those areas that were not covered in
class should be included then so as to improve gaps between theory and practice.
Practical training placement process was generally good due to the good management
at the Office of The Practical Training Programme. However there are few things
seen as gaps which need some consideration. Listed below are the recommendations
concerning handling gaps in teaching theory and practice and those concerning the
placement process.

2 #! !" !

1. Regular visits to organisations; Some courses at the university should have a

certain program for linking theory and practice. That is, business teaching
should be research based such that theory is well linked with the real situation
through regular visit to organisations. For example, AC 204 which teaches
taxation theory should include TRA visits. As seen at TRA, taxation is so
wide that it can be difficult for students to understand it in one semester. EC
courses should include cases from the Tanzanian context rather than how it is
done now.

A program that will enable students visit physically areas of practice like
TRA, will help them comprehend and grasp theory easily. Other subjects like
Accounting which teaches about tools which are used practically like balance
sheets, bank reconciliation, etc should be accompanied by vivid examples of
such tools.

2. Inclusion of software packages into syllabus; most of subjects being taught

at the university are based on manual operations contrary to the current level
of technology. All organisations nowadays have personalized software that
automates most of the routine activities. Software packages and computer
should be taught so as to prepare students to meet such programs in their work
setting. Popular packages are like MYOB, Tally, MS Excel, etc and
personalized software includes such software as the one I used at TRA i.e.
ITAX, ASYCUDA++, TIN, etc.

3. Early teaching of subjects relevant for Practical Training; TRA PT

training partly included auditing works. Prior to going for practical training,
auditing was not taught yet. This in some ways makes practical training in the
field of auditing illogical just because practice is being put where there is no
laying theory. FN 202 is an example of an important course which was taught
prior to going for PT. Some students applied it in advising management on
issues such as investments during weekly conferences. Financial Accounting
is another subject important for teaching prior to PT.

Mbwile Patrick R | Practical Training Report 22

 4. Duration; Practical training duration should be extended from 4 weeks to 12
weeks for comprehensive learning. The four weeks we spent were very
interesting but unfortunately not enough to learn all the organisation aspects
such as departments, culture and politics. Those who were lucky to rotate in
the organisation did not cover the whole organisation. Organisations will not
experience any reduction in the work load if students stay for a short time; at
least a long time will help make a significant change in the organisation. A
long duration will also help organisation judge students’ performance for
employment consideration.

2 ( - !" !- # ! ""

1. Opening career centre at FCM; when it comes to practical training most

students underestimate the importance of proper placements for their career.
The same thing happens to graduates, they need a lot of career information
after they complete their studies. Most popular Universities have such centres
already established; it is good that FCM considers establishing one. Such
centres should be responsible for securing practical training placements as
well as giving critical advice to students and graduates concerning career.
This centre should have full time working staff.

2. Internship plans; The Office of the Practical Training Coordinator should

make sure students submit plans prior to going for PT. Such plans should
indicate departments within an organisation where the student is willing to
work. I suggest this because it has been a common situation that students
encounter in their practical training. They find themselves ending up in one
department contrary to their expectations. The same thing happened to me.
Such plans should be signed by PT Coordinator ready for submission to the
organisation management upon arrival.

3. Partnership with organisations; most of the organisations students apply to

are reluctant when it comes to considering students for training. FCM should
establish well defined partnerships with organisations for easing placement
process. The government should be asked to provide permanent places for
training in its institutions. Private enterprises should be asked for partnership
with the University in matters concerning PT. The future of such undertaking
is easing students’ troubles they face when looking for placements.

In the same manner, PT placement should be the sole responsibility of The

Office of The Practical Training Coordinator. By use of interviews or
academic performances, all students should be allocated places which were
found beforehand by the office. This will add meaning to the office’s
existence and help students smoothly secure placements.

Mbwile Patrick R | Practical Training Report 23

2( "

Tanzania Revenue Authority website – www.tra.go.tz

TRA, (2008), The Employer’s Guide to “Pay as You Earn”, TRA

TRA, (2006), Audit Manual, TRA

TRA, (2003), TRA Second Corporate Plan at Glance, TRA

FCM, (2006), Guidelines for Practical Training, University of Dar es Salaam

Mbwile Patrick R | Practical Training Report 24

2 , !! "

2, !! : A! ! ! " -

This document was a letter I wrote to TRA management asking for rotation within
TRA departments.

UNIVERSITY OF DAR ES SALAAM

FACULTY OF COMMERCE AND MANAGEMENT
OFFICE OF THE PRACTICAL TRAINING PROGRAMME

PRACTICAL TRAINING PROPOSAL

The practical training programme supervision will consist of an internal supervisor

from TRA and an external supervisor from University of Dar es Salaam. Each of
them, among other things will be required to assess the proper work schedule given to
the students. We present you with a proposal on how our eight (8) weeks programme
can be organized.

Proposed Area of study Proposed Duration

Audit section, Domestic Revenue
Department 2 weeks (1st July to 11th July)
Debt management 2 Weeks (14th July to 25th July)
Accounts office 2 Weeks (28th July to 15th August)
Customs 2 Weeks (18th August to 26th August)

• Please we ask you to accept and correct it as you see relevant.

Mbwile Patrick R | Practical Training Report 25

2 , ( !! : A! " "9 !-

This was a letter submitting a rotation plan to the Human Resources Manager as he
requested us to do after I asked for rotation.

Practical Training Students,

Tanzania Revenue Authority,
Mbeya Regional Office.
28th July 2008.

Human Resource Manager,

Tanzania Revenue Authority,
Mbeya Regional Office,
Mbeya.

Dear Sir,

RE: STUDENTS’ PRACTICAL TRAINING ROTATION PLAN

The above heading is highly concerned.

Owing to your practical training rotation plan request, we arranged and spread ourselves
within Tanzania Revenue Authority in the following manner;

Student 28th July-8th 11th August-22nd

No. Institution Current Location
Name August [2 Weeks] August [2 Weeks]
Mbwile Debt Management
1 UDSM Audit Section Accounts Office
Patrick R Section
Mgabe Debt Management
2 UDSM Audit Section Accounts Office
Lameck Section
Debt Management
3 Victor Owen IFM Audit Section Accounts Office
Section
Zainab Debt Management
4 IFM Audit Section Accounts Office
Dawood Section
Debt Management
5 Lucy Lucas SAUT Audit Section Accounts Office
Section
Njobele Debt Management
6 IFM Accounts Office Audit Section
Francis Section
Lillian S Debt Management
7 UDSM Accounts Office Audit Section
Shauri Section

Students from IFM and SAUT will still be remained with one extra week ahead of this plan,
it is expected that they will remain in their final allocations as indicated in the plan.

We would also like to thank you for your concern on the whole matter and helping us to
make it a success. We are hoping for your further assistance as we are going to report any
problem or progress when it occurs.

Faithfully yours,

Mbwile Patrick R,

Representative, PT Students
Mbwile Patrick R | Practical Training Report 26
 2 , , !! : A > !-

Plan designed for my training at TRA as proposed before to the management.

TANZANIA REVENUE AUTHORITY

UDSM PT STUDENTS
WORK PLAN

Period Location Type of Work Details of Works To Be Done

Auditing
Examining customers’ documents, physically
1st July to 28th Audit
customers’
visiting customers’ business areas, checking
July[1 Month] Section
business records
compliance to various laws, etc
28th July to 8th Accounts Cash Bank Reconciliation of various cash
August [2 Weeks] Office Management
collections, issuing allowances, etc
Debt Registration, assessment and collection of
11th August to 26th Debt collection
Management tax. Debt enforcement and physically visiting
August [2 Weeks] and enforcement
Section customers who fail to pay tax.

Mbwile Patrick R | Practical Training Report 27