Thursday, June 14, 2018

Spare us fresh tax rises, Mpango told


By Samuel Kamndaya and Ludger Kasumuni

Dar/Dodoma. Today is the budget day when, a few hours from now, the Finance and Planning Minister, Dr Philip Mpango, will table the 2018/19 budget proposals.

The speech carries tax policies, proposals on revenue and expenditure proposals as well as other measures that are meant to boost the economy.

Stakeholders who spoke to The Citizen in separate exclusive interviews  say they hope Dr Mpango’s speech will come up with policies that will directly translate into improved climate for businesses to thrive.

The consensus, among stakeholders, is that any attempts to increase tax will be detrimental at the time when local industrial and agricultural production as well as consumption has been affected by various policies under-taken by the government in the past three years.

The executive director of the Tanzania Private Sector Foundation (TPSF), Mr Godfrey Simbeye has already engaged the government, as it does every year, about taxes and other policies that have to be reviewed.

He mentioned some of these policies as according strate-gic investors a 10 years tax holiday; reducing excise duties for industrial products and increasing value added tax registration threshold for firms with turnover of Sh500 million from those with turnover of Sh100 million.

Other proposals include reducing corporate tax rate to 15 per cent for companies with annual turnover of less than Sh500 million; scrapping Skills Development Levy for companies with turnover of Sh500 million or less or those with less than 50 employees. “Reducing corporate taxes will encourage many unregistered busi-nesses to formalize and boost their chances of growth. Government revenue will also increase because the newly formalised businesses will start paying taxes,” Mr Simbeye noted.

MPs who spoke to The Citizen will also say they do not expect any increase in taxes. “My expectation is that we will have a budget that is not tax-oriented but rather one that is production-oriented,” said Mr Hussein Bashe (Nzenga Urban CCM).

He added: “When the fifth phase administration came to power in 2015, the focus was on cutting costs and collecting taxes. During the peri-od, some companies have recorded declining customer numbers, hence their failure to repay the loans….I do not expect new taxes this time around.” Stimulating industrial production should also include dropping the 15 per cent in additional import duty on industrial sugar.

The duty was introduced due to the fact that some importers used to import the product but instead of using it for industrial production, it was being channelled to domestic use. “Since we now know who the culprits are, we could simply remove it and punish the offenders. By doing so, we will be stimulating industrial production,” he said. Mr Rashid Shangazi (Mlalo  CCM) said he also expects the government seriously consider reviving the agro-processing. “We need a budget that will stimulate the setting up of agro-processing industries.

With millions of cows and water bodies that are conducive for fishing, I also expect that the budget should create a conducive environment for the setting up of meat and fish processing factories,” he said, expressing dismay at the knowledge that there is not even a single fish processing factory throughout Tanzania’s Indian Ocean coast from Tanga to Msimbati in Mtwara.

Mr Mohamed Mchengerwa (Rufiji CCM) said: “We expect a budget that will start showing progress of what the ruling party pledged during the 2015 elections, including access to electricity.” The country, said Ms Saada Mkuya (Welezo-CCM), will need a quick win budget. This, she said is the one that puts emphasis on delivery of social services. “I do not mean to say that we should shun implementation of mega projects but I am for the type of a budget where citizens will be able to see the impact within the shortest possible period,” she said insisting that money should go towards water, health, electricity and rural roads.

Ms Mkuya, who served as Finance Minister during the days of former President Jakaya Kikwete, said people tend to view development basing on projects that reach them during a short time.

Mr Cosato Chumi (Mafinga-CCM) said a budget that will work is one that will create an enabling environment for the private sector to thrive.

This, he said, should include a reduction of taxes and fees that businesspeople are exposed to in their various investment projects. “These taxes and fees are, at times, discouraging investors so we surely need to look at ways of reducing them and that is the type of a budget that we need,” he said, insisting that much of the spending plan has to be directed towards projects that have stalled.

Meanwhile, other stakeholders were cautious and warned against having high hopes on the today’s budget. An economist, Mr Joseph Matala, says he expects nothing new and substantial in the 2018/19 budget, because there is continuity of taking the same approach of framing unrealistic budget. “Nothing new will happen, because the sources of revenue collection are the same and the economy is yet to attract more Foreign Direct Investments,” said Mr Matala.

The Chairman of National Constitutional Forum, Mr Hebron Mwakagenda, also said that there is nothing new under the 2018/19, because its structure is the same as the previous national budget. “There is nothing new. Budget credibility has fallen in the country.

Even the Controller and Auditor General has exposed that weakness,” said Mr Mwakagenda. The new budget has nothing to do with what people want in terms of improving their living standards, he added.