Lawmakers expect ‘realistic’ budget

Dodoma/Dar es Salaam. With only three days remaining before Finance and Planning minister Phillip Mpango tables the government’s 2018/19 Budget, MPs expect he will come up with realistic numbers.

Lawmakers interviewed by The Citizen were also of the view that Dr Mpango, a former World Bank senior economist, will come up with fiscal measures that will stimulate industrial growth.

With domestic revenue collections falling short of target for over six consecutive years, Ms Halima Mdee (Kawe-Chadema) said it would make sense if the government would refrain from seeking to impress Tanzanians with high-sounding figures and instead go for realistic numbers. She added that only Sh14 trillion was collected in 2016/17.

“This was not enough to implement all development projects that had been planned. I expect Dr Mpango to come up with realistic figures this time around,” said Ms Mdee, who doubles as the Shadow Finance and Planning minister.

Her Kigoma Urban counterpart, Mr Zitto Kabwe (ACT-Wazalendo), voiced similar sentiments.

“I hope that this year’s budget will be a realistic one,” he said, adding that revenue and expenditure plans for the past two financial years had been “very unrealistic”.

Citing reports of the Controller and Auditor General, Mr Kabwe said Parliament passed a Sh29.5 trillion budget for 2016/17, but only Sh25.3 was realised for the plan. Despite this significant shortfall, the 2017/18 budget was raised to Sh31 trillion, with the figure to be proposed for 2018/19 expected to increase further, the ACT-Wazalendo party leader said.

“The government’s budget estimates remain off the mark by between 15 and 20 per cent. It’s time the Finance minister presented a realistic budget.”

Business-friendly budget

MPs also said Tanzania needs a business-friendly budget that will stimulate economic activities and put the country on the track to attaining its industrialisation goals.

“In my view, we need a budget that will create an enabling environment for the private sector,” said Mr Mshimba Ndaki (Maswa West-CCM). This, he added, should include implementation of the blueprint endorsed recently by the Cabinet, and which is meant to improve Tanzania’s business climate.

The blueprint – which was announced by Industry, Trade and Investment minister Charles Mwijage – was prepared after thorough consultations with various private sector stakeholders and the World Bank.

Under the blueprint, the government is expected to initiate amendment of various laws, including those governing value added tax (VAT), indicative prices for imports, immigration, labour, social security and environmental management, among others, with a view to attracting more investors.

The government is also expected to establish a single regulatory body that will combine the operations of regulatory agencies such as the Contractors Registration Board (CRB), Engineers Registration Board (ERB) and Architects and Quantity Surveyors Registration Board (AQRB). This will make it possible for investors to obtain all the requisite construction permits under one roof.

Similarly, the functions of the National Environment Council (Nemc), Operational Safety and Health Authority (Osha), Tanzania Food and Drugs Authority (TFDA), Tanzania Bureau of Standards (TBS), Fire Department, Weights and Measures Agency (WMA) and Energy and Water Utilities Regulatory Authority (Ewura) are to be put under one roof to simplify the issuance of permits to investors. Fees charged by the agencies will also be reviewed.

Mr Ndaki said the government should start to implement some of these business-friendly reforms during the 2018/19 financial year.

“It’s my expectation that the government will roll out the implementation of the blueprint during the coming financial year,” he said, adding that the blueprint would make Tanzania a highly competitive investment destination in the region if well implemented.

Mr Nape Nnauye (Mtama-CCM) said it was time the government started working out a plan that would see the private sector being involved in the implementation of mega-projects.

“The private sector should be given a greater role in the execution of such projects from 2018/19,” he said, adding that the government should nurture the growth of the private sector.

Mr Nnauye also said the government should change its approach as far as tax compliance was concerned.

“Instead of concentrating on taking punitive measures against those who fail to pay tax, the focus should be on making it convenient and attractive for people to pay tax voluntarily as required by law.”

Mr Sixtus Mapunda (Mbinga Urban-CCM) said: “We need to feed the cow so that we can milk it. We need to create an enabling environment for businesses to thrive so that we can come back and collect our fair share of tax.”

Mr James Mbatia (Vunjo-NCCR-Mageuzi) said Tanzania needed a budget that would take into consideration the interests of both the government and the business community.

That way, he added, liquidity in the economy would improve and the multiplier effects would benefit all Tanzanians, irrespective of their economic standing.

Low-income earners such as food vendors and hawkers also deserve some sort of a tax waiver, Mr Mbatia said.

Where to invest

While supporting the industrial drive, Mr Mapunda is of the view that for industries to thrive, the country needs electricity, skilled and cheap labour as well as raw materials.

“Much as we want to industrialise, it makes sense for the budget to be balanced,” he said, noting that the industrialisation drive should give priority to products that have a ready domestic market.

Mr Mapunda added that the various national zones needed to identify their competencies and be helped to develop specific industrial products.

“For instance, the Central Zone could be entrusted with the task of producing enough sunflower to produce adequate amounts of cooking oil that will be sold on prices that are more affordable than imported ones…that’s the way to industrialise.”

The textile industry, according to Mr Mapunda, was another point of focus in the industrialisation agenda if the government came up with the right tax incentives.

Mr Kabwe also believes that the country needs to focus on the textile industry because of its potential to employ many people at a go.

He said Tanzania needed to adopt fiscal measures that would ban the export of raw materials and provide an incentive for finished products for export by giving exporters tax breaks.

“We should also introduce tax measures that focus on reducing production costs in some key manufacturing areas producing goods such as textiles, edible oil, sugar and cement.”

Mr Peter Msigwa (Iringa Urban-Chadema) said funds collected through tax should be spent only on projects approved by Parliament.

Mr Joseph Mbilinyi (Mbeya Urban-Chadema) said: “My only worry is that the fifth phase government’s style of leadership is against parliamentary procedures. The government allocates sufficient funds for the implementation of development projects without consulting Parliament or bothering to seek its approval. This is unacceptable.”