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1.47.2 Exports of Services Exports of services consist of the following services provided by residents to non- residents: transportation; travel; communications; construction; insurance; financial; computer and information; royalties and licence fees; other business services; personal, cultural, and recreational services; and government services not elsewhere classified.

1.48 Imports of Goods and Services Consists of purchases, barter, or receipts of gifts, or grants, of goods and services by residents from non-residents; the treatment of exports and imports in the SNA is generally identical with that in the balance of payments accounts as described in the Balance of Payments Manual.

1.49 Imports of Goods Imports of goods consist of imports of the following items from non-residents to residents, generally with a change of ownership being involved: general merchandise, goods for processing, goods procured in foreign ports by domestic carriers, and non-monetary gold.

1.50 Imports of Services Imports of services consist of the following services purchased by residents from non-residents: transportation; travel; communications; construction; insurance; financial; computer and information; royalties and licence fees; other business services; personal, cultural, and recreational services; and government services not elsewhere classified.

1.51 Cost, Insurance and Freight Price (CIF) The c.i.f. price (i.e. cost, insurance and freight price) is the price of a good delivered at the frontier of the importing country, including any insurance and freight charges incurred to that point, or the price of a service delivered to a resident, before the payment of any import duties or other taxes on imports or trade and transport margins within the country.

1.52 Free On-Board Price (FoB) The f.o.b. price (free on-board price) is the c.i.f. price less the costs of transportation and insurance charges, between the customs frontier of the exporting (importing) country and that of the importing (exporting) country.

10 1.53 Operating Surplus Operating surplus or mixed income is a measure of the surplus accruing from processes of production before deducting any explicit or implicit interest charges, rent or other property incomes payable on the financial assets, or tangible non produced assets borrowed or rented by enterprise.

1.54 Fixed Assets and Consumption of Fixed Capital Refers to the reduction in the value of fixed assets used in production during the accounting period resulting from physical deterioration, normal obsolescence or normal accidental damage. a) Fixed Assets Are tangible or intangible assets produced as outputs from processes of production that are themselves used repeatedly or continuously in other processes of production for more than one year.

b)
Consumption of Fixed Capital Refers to the decline in the current value of stock of fixed assets as a result of physical deterioration, normal obsolescence or normal accidental damage.

1.55 Non-financial Assets Non-financial assets are entities, over which ownership rights are enforced by institutional units, individually or collectively, and from which economic benefits may be derived by their owners by holding them, or using them over a period of time, that consist of tangible assets, both produced and non-produced, and most intangible assets for which no corresponding liabilities are recorded.

1.56 Non-produced Assets Non-produced assets are non-financial assets that come into existence other than through processes of production.

1.57 Valuables Valuables are produced assets that are not used primarily for production or consumption, that are expected to appreciate or at least not to decline in real value, that do not deteriorate over time under normal conditions and that are acquired and held primarily as stores of value.

1.58 Basic Price It is the price receivable by a producer exclusive of taxes on the product and inclusive of subsidies on the product.

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1.59 Producers’ Price It is the price receivable by a producer inclusive of taxes on the product (but not Value Added Tax) and exclusive of subsidies on the product.

1.60 Purchasers’ Price Refers to the price paid by the purchaser, excluding any deductible tax, in order to take delivery of a unit of a good or service at the time and place required by the purchaser. The purchaser’s price of a good includes any transport charges paid separately by the purchaser to take delivery at the required time and place.

1.61 Financial Intermediation It is a productive activity in which an institutional unit incurs liabilities on its own account for the purpose of acquiring financial assets by engaging in financial transactions on the market.

1.62 Financial Intermediation Services Indirectly Measured Financial intermediation service indirectly measured (FISIM) is an indirect measure of the value of financial intermediation services provided but for which financial institutions do not charge explicitly.

1.63 Social Accounting Matrix (SAM) It is a square matrix consisting of rows and columns accounts that represent different sectors, agents, and institutions of an economy at the desired level of desegregation. The SAM is a useful framework for consistent multi-sectoral economic data preparation, represents the expenditure-receipt flows among all actors and sectors of the entire economy, capturing both input-output and national income and product data.
It contains detailed information about the incomes and expenditures/outlays of institutions (household groups, enterprises/companies, governments and relevant accounts of the rest of the world); and about the production structure i.e. the input-output (I-O) structure of production in the economy.

12 General Structure of A Macroeconomic Social Accounting Matrix Activities Commodities Factors Households & Firms Government Savings Investment Rest of the World Activities D
Domestic Supply
E
Export Commodities C
Private
Consumptio G
Government Consumptio I
Investment
Demand Factors Y
Value-added Households & Firms Y
Household
Income Government TX
Indirect Tax TH
Income Tax Savings Investment SH
Private
Saving SG
Government Saving SF
Foreign
Saving Rest of the World M
Imports R E C E I P T S PAYMENTS

Key: Y =
Value-added (GDP at basic prices/ factor costs) TX =
Indirect production tax D

Domestic supply M

Imports (c.i.f.) C

Final private consumption TH = Income taxes SH =
Domestic private savings G

Government consumption SG

Government savings I

Investment demand E

Exports (f.o.b.) SF

Foreign savings

The designing and structure of any SAM depends on the socio-economic structure of an economy, policy needs, and data availability.

13 1.64 Input-Output Table It is a tabular summary of the flows of goods and services between industries and final demand of an economy with the output of each sector being the inputs of the other sectors. It is an important analytical tool for analyzing the structure of production in an economy. It also shows the relationship between inputs of raw materials and output of final product.

1.65 Supply and Use Tables These are tables in the form of matrices that record how supplies of different kinds of goods and services originate from domestic industries and imports and how those supplies are allocated between various intermediate or final uses, including exports.

1.66 Taxes on Products Taxes on products, excluding VAT, import and export taxes, consist of taxes on goods and services that become payable as a result of the production, sale, transfer, leasing or delivery of those goods or services, or as a result of their use for own consumption or own capital formation.

1.67 Taxes on Production and Imports Taxes on production consist of taxes payable on goods and services when they are produced, delivered, sold, transferred or otherwise disposed of by their producers plus other taxes on production, consisting mainly of taxes on the ownership or use of land, buildings or other assets used in production or on the labour employed, or compensation of employees paid.

1.68 Taxes and Duties on Imports Taxes and duties on imports, excluding VAT, consist of taxes on goods and services that become payable at the moment when the goods cross the national or customs frontiers of the economic territory or when the services are delivered by non-resident producers to resident institutional units.

1.69 Deductible VAT Deductible VAT is the amount of VAT payable on purchases of goods or services intended for intermediate consumption, gross fixed capital formation or for resale which a producer is permitted to deduct from his own VAT liability to the government in respect of VAT invoiced to his customers.

14 1.70 Non-deductible VAT Non-deductible VAT is the VAT payable by a purchaser which is not deductible from his own VAT liability, if any.

1.71 Export Taxes Export taxes are taxes on goods or services that become payable when the goods leave the economic territory or when the services are delivered to non-residents; they include export duties, profits of export monopolies and taxes resulting from multiple exchange rates.

1.72 Public Sector The public sector is comprised of government and parastatal sub-sectors. It includes establishments under the central, regional or local governments and other government institutions.

1.73 Private Sector The private sector comprises formal and informal establishments, which are not part of Government. These establishments can be individual, joint or cooperatives.

1.74 Production Sector These are sectors, which produce goods such as agriculture, manufacturing, mining and quarrying, electricity, and water.

1.75 Service Sector These are sectors, which renders services such as trade, transport, communication, public administration, finance and other business.

1.76 Additional Concepts The three methods (approaches) used for calculating Gross Domestic Product (GDP) according to the System of National Accounts (SNA) are Product approach, Expenditure approach and Income approach.

a) Product approach is aggregated based on the production accounts. GDP is Sum of Gross Value Added of all industries (or all economic activities) Plus Taxes on products Less Subsidies on products.

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b) Income approach, which is aggregated based on the generation of income accounts. GDP is sum of Compensation of employees, Operating surplus, Consumption of fixed capital, Taxes on products net subsidy.

c) Expenditure approach, which is aggregated based on the goods and services accounts. GDP as sum of expenditure categories:
Government final consumption expenditure
Household final consumption expenditure
NPISHs final consumption expenditure
Change in inventories
Gross fixed capital formation
Export of goods and services Less Import of goods and services. Gross Domestic Product of Tanzania is mainly compiled using production and expenditure approaches.

16 CHAPTER TWO TAX STATISTICS 2.0 Introduction Tax is a compulsory levy or charge imposed by the state on her citizens or non-citizens that is usually payable in monetary terms. Taxes are compulsory financial contributions to state revenue made by a person or body of persons towards workers’ income and business profits or added to the cost of some goods, services and transactions expenditure of a public authority.

Tax statistics refers to the data that are related to taxes collected by the authorized institutions in the country. Basically, there are two types of taxes namely, direct and indirect taxes. Each type is classified according to the legal and effective incidence to the final payer.

2.1 Direct Taxes These are taxes levied directly on people’s income from employment, business or ownership of property or investment. They include income tax, corporate tax, property tax, Pay as You Earn (PAYE), Basic Skills and Development Levy, Individual tax, withholding tax Rental and Gaming tax.

2.1.1 Income Tax Refers to type of tax governments impose on income generated by businesses and individuals within their jurisdiction. Income tax is used to fund public services, pay government obligations, and provide goods for citizens.

2.1.2 Imposition of Income Tax It is charged and payable for each year of income by every person who:- § Has total income, which is the sum of employment, business and investment income; § Has a domestic permanent establishment that has repatriated income for the year of income; or § Receives final withholding payments for the year of income.

2.1.3 Corporate Tax It is levied on all the corporate taxable profits, accruing to all companies carrying on business in Tanzania. It is generally applied to a company' operating earnings, after expenses such as Cost of Goods sold (COGS), Selling General and Administrative expenses (SG&A) and depreciation have been deducted from a company revenue.