No Tax Identification Number No government contract

Companies who get contracts from the government must have Tax Identification Numbers (TIN) from the Internal Revenue Commission.


This will be compulsory before any payment is made from district and provincial treasuries through the Integrated Financial Management System (IFMS).


IRC Commissioner General Sam Koim says it has administratively burdensome for the organisation to collect GST and allows a big non compliance gap.


He said IRC is taking a number of measured steps in closing that gap, starting with those who receive business from the government.


Minister for Finance Sir John Pundari today launched what is dubbed as “GST Section 65A Notice” to be configured in the Integrated Financial Management System (IFMS) to facilitate the direct transfer of GST components directly to IRC on account of suppliers.


“This is a monumental step forward in tax administration where available financial technology (IFMS) is being used as an intermediary to usher effective collection,” Koim said in a statement.
“Our tax administration system which we’ve adopted from abroad presumes that the taxpayer is always honest in assessing and declaring his/her tax liability and pay on time.
“Whilst this may work well in generally honest societies, it is challenging for a society such as ours.
Koim said while they are closing the gaps on non tax compliance, they feel that GST is broad based and its tax base is the entire country.
He said if GST collection generate much revenue, it may offer the government alternative to offset the foregone revenue from salary and wages tax (SWT).
“That is why we aim to make GST the number one revenue earner for the government,” Koim said.
“We share the cry of our working class concerning the high rates of taxes imposed on their salary and wages.
Under this new GST tax administrative compliance those who are engaged by the Government entities must also be aware that under this arrangement, all suppliers without a TIN number will have their payments on hold until being formally registered with the IRC.
The IRC has trialled the GST section 65A project with 15 agencies and have raised well over K20 million in the last six months, Koim said.

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