Dar es Salaam. President John Magufuli yesterday gave a seven day-ultimatum to businessmen who have evaded tax to pay up or risk arrest and court charges as he intensified efforts to raise revenue to fund government budget.
President Magufuli said those who have not paid tax for any reason should voluntarily come forward or face the long arm of the law.
“Go and pay now so that we can leave you in peace. You can’t hide the containers like a needle. But when the ultimatum expires, stern legal measures will be taken against all those who will have failed to cooperate,” said the President during a State House meeting with members of the business community who paid him a courtesy call.
The President spoke even as Prime Minister Majaliwa Kassim Majaliwa separately revealed that more than 2,300 containers had been cleared from the Dar es Salaam Port without paying the necessary duties since March 2014. (See story page 3).
Dr Magufuli told the delegation that he was acting in order to collect enough revenue to fund local development as currently available money was only being spent on recurrent expenditure, like paying salaries and on government operation.
Revealing the dire financial situation in which his administration finds itself, the President said that not a single cent had been released for development projects since the current budget was approved in June. He said he had only this month released some Sh120 billion as the first payment for development budget.
“You know, it could be we are being hard on some of you, but all we need is the money to drive the economy and build the nation together. I urge you to pay your taxes, apply for another business opportunity and you will be granted,” said Dr Magufuli as he appealed for support from members of the business community.
An investigation is currently underway to find the owners of more than 340 containers that vanished from the Dar es Salaam Port without paying Sh80 billion in taxes. Yesterday’s revelation by the PM would suggest that the investigations are now likely to be extended.
Since coming to power in October, Dr Magufuli has implemented a number of cost-cutting measures, including scrapping off Independence Day celebrations next Wednesday and directing that Sh4 billion saved be used to expand the usually gridlocked Bagamoyo Road.
He has also banned all but essential foreign travel by public servants and restricted first class and business class tickets to the President, Vice President and Prime Minister.
The President also slashed the 11th Parliament inaugural cocktail party budget from Sh250 million to just Sh15 million and sent the balance to buy beds and mattresses for the cash strapped Muhimbili National Hospital. Dr Magufuli has further banned government meetings and workshops in hotels as a move to reign in unnecessary public expenditure.
Yesterday, he told the businesspersons: “When we take these (cost-cutting) measures, it doesn’t mean that we are heartless, we do so in good faith, so that the poor Tanzanians can get their needs,” he said of the austerity measures that have earned him local and international acclaim.
The team to State House was led by the CEO Round Table chairman Mr Ali Mufuruki and Mr Reginald Mengi of the Tanzania Private Sector Foundation. Through the Tanzania National Business Council (TNBC), they presented to the President a memorandum on issues they would like his administration to address to enhance the business environment and attract more investments.
Dr Magufuli said he envisions Tanzania turning into a donor country in the next few years if the government and the private sector played their respective roles efficiently.
“With the abundance of natural resources in our country, I believe if we form a stronger partnership in exploiting the available opportunities, our country will create a self-sufficient economy and end aid dependence,” he said.
He said the government will drop nuisance taxes and levies to attract more investments and empower the smallest in the private sector including farmers to flourish.
The President said he was ready to address the challenges that inhibit trade and investment and also lock out of the mainstream economy many Tanzanian traders.
He said during his campaign for the presidency, he avoided receiving contributions from businesspeople because he wanted to work with all of them. “If there’s any of you who contributed even 2 cents raise your hands...there’s no one. I did that because I wanted to work fairly with you all, and the time for work is now.”
He warned that he won’t tolerate bureaucratic officials in his administration.
“If you want to invest in any project and have all that is required but a government official becomes a stumbling block in a manner of soliciting bribe or for whatever reason, please report him/her to me or the Chief Secretary, if the employment of the officer is under my appointing powers, I will sack them straight away, because such behaviour will be delaying us in reaching destination,” he said.
Dr Magufuli challenged local businesspeople to invest in all sectors including gas, “I don’t have any problem with it, the room is there.”
“There is no country which did not support its own. When you empower the locals they will eventually collaborate with foreign investors, we can’t say that locals can’t invest in big sectors. I want you to believe in yourselves and take on opportunities but you should be patriotic first and foremost.”
He said through rightful investment, jobs will be created for the masses and the government will get revenues. “That is the way to survive for any serious government.”
President Magufuli said he knew all businesspeople are after profit maximisation but they should pay all the required taxes.
He said tax collection is the vital area of partnership and warned those evading: “You can do it temporarily, not permanently.”
With regards to small scale traders, President Magufuli said he was aware of the woes facing the use of electronic fiscal devices (EFDs), and said he had already suggested to Commissioner General of TRA to see if they can provide them free of charge to traders.
“The only cost that we will incur is Sh12 billion, but if you use a simple mathematical logic, you will see that we will collect more than that in taxes because all traders will be using the machines, and thus we will collect revenues from all of them.”
Dr Magufuli threw a jab at a businessman he said had used his wealth to encroach on a public beach to suppress the poor users. He did not name the said businessman.
“It really disturbs me to see a wealthy businessperson bribing officials to encroach public land for his own interest. Then the people from poor neighbourhoods are blocked from accessing the beach to swim and have fun. I know you are all aware of the place that I am talking about,” he said adding “You can run to court to justify that action, you can even buy the State House but that is not going to happen during my presidency.”