SOME local construction companies have been getting penalties from Tanzania Revenue Authority (TRA) due to ignorance of financial management, tax laws and regulations.
This was revealed yesterday in Mwanza by Financial Expert, Wesley Nsomba when he was presenting a topic on financial decisions and working capital management to local contractors in three days of training that is organized by the Contractors Registration Board (CRB).
The training will also cover taxations and compliance, risk management, elements of financial statements and the importance of using the electronic system in procurement (Tanzania National e-Procurement System (TANePS).
Nsomba said all contractors must be familiar with tax laws and financial management so that they avoid unnecessary penalties and interest rates which are caused by their ignorance of the law.
He said many local contractors’ companies do not hire competent tax consultants, something which causes them to fail to comply with tax laws and eventually get penalties and tax interest rates from TRA.
“Owners of construction companies must be conversant with finance management and tax laws because when TRA knocks your door to audit your revenues, you fail to defend yourself, and sometimes they can take advantage of your ignorance to punish you. That is why CRB decided to conduct this training to enable you to become competent in tax laws and financial management,” he said
He urged owners of construction companies to make sure they audit their revenues by using tax consultants that are recognized by TRA to avoid unnecessary penalties.
“And if you hire a tax consultant, make sure you sign a contract with him so that it becomes easy for you to hold him accountable in case he messes up. It is risky to work with a tax consultant without having a contract because when things go wrong he might disappear,” he said
One of the training participants, Riziki Kyoba admitted that many construction companies have been slapped with penalties and tax interest rates from TRA because of using incompetent tax consultants.
He said usually when a tax consultant fails to answer some questions from TRA, they summon the owner of the company to the authority for tax clarifications.
“Most owners of construction companies are not conversant with tax laws, and they end up getting in trouble and face penalties simply because of their ignorance, so we need regular training on finance management and tax issues,” he said.