Make policies predictable, TZ told

Sunday January 1 2017

 

By Alex Malanga @ChiefMalanga amalanga@tz.nationmedia.com

Dar es Salaam. Business leaders have called on the government to improve policy predictability, ensure legal transparency and remove bureaucracy to attract more investors.

“Tanzania needs to compete for capital and investment in the world. That won’t happen just by saying it but by making the country more attractive and predictable,” CEO Roundtable chairman Ali Mufuruki told The Citizen. “There is a plenty of capital in the world and places to invest it are being sought.

According to Mr Mufuruki, it is critical for the government to convince investors that it will not alter the policy environment. More investor-friendly laws should be embraced by reducing barriers to doing business.

He said a predictable and stable regulatory framework was crucial as it forms the bedrock of a modern rulemaking process by creating the predictability, consistency and transparency to foster investment and trade.

“I’m hopeful the government will make it though it still has a long way to go. The shaking of businesses that we are currently experiencing is transitional.”

He said the government was supposed to be keen on political statements touching on business policies to win the confidence of investors. He cited the government’s decision to force telecommunication companies to list their shares on the Dar es Salaam Stock Exchange (DSE), cautioning that it would scare away investors.

On Tuesday, the government ordered telecommunication companies licensed before July 1, 2016 to abide by law and float their 25 per cent of shares on DSE in three days.

Mr Mufuruki said the companies were not prepared for the changes as some of them were not making profits, making it difficult for others to buy their shares. “This was supposed to be optional as it used to be. The plan just used to be on papers, I am not so sure if when telcos entered the market, were told about the plan.” But Finance and Planning minister Philip Mpango recently denied that the decision was a reversal of the country’s previous strategy.

Confederation of Tanzania Industries (CTI) chairman Samuel Nyantahe said administrative burden on businesses should be reduced.

He spoke about so many regulatory bodies, including those of food and drugs, product standards, energy and water Utility Regulatory Authority, occupation health and safety as well as the Tanzania Revenue Authority (TRA). Regulatory burden, he stressed, left businesses with less time and money for their actual activities “The government is suppossed to ease the burden by reducing the number of compulsory permits — by simplifying or scrapping them altogether,” noted Dr Nyantahe.

He called for clarity on regulations and more active consultation with business stakeholders before new rules are passed.

“The rule of law needs to be strengthened to make investors certain that their investments will not be threatened.”

Dr Nyantahe believes that money for development projects should all and in time be disbursed to spur investment.

Tanzania Business Community chairman Johnson Minja has asked TRA to focus more at the Dar es Salaam Port for tax collection.

Tax collection agencies should plug all tax loopholes to ensure that revenue is collected accordingly.

He called on the government to establish systems which integrate all tax agencies to speed up tax administration.

However, Mr Minja cautioned that tax reforms and policies alone were inadequate to increase revenue.

He instead said it was imperative for tax collection bodies to have mechanisms to plug revenue leakages.

He also suggested that a drive be stepped up to educate the public on the importance of paying taxes. He called for improvement of cargo clearance system at ports to lower the costs of running businesses and deliver products to markets in time.

Tanzania Shipping Agents Association chairman Peter Kirigini recently told The Citizen that it took seven days for domestic goods and 10 days for transit goods to be cleared.

He suggested that the dwell time be reduced to below five days to lower costs of doing business. According to him, a ship paid $20,000 (44.5 million) on each day that it spends at the port. This burden is passed on to final consumers.

“To lower these costs, the government should have a more effective customs clearance system to expedite cargo clearance and reduce the dwell time,” said Mr Minja.

Industry, Trade and Investment minister Charles Mwijage told the Tanzania Industries Exhibition here last month that up to October 2016 the government missed the revenue of at least Sh317 billion due to undervaluation of imports.

Tanzania Private Sector Foundation executive director Godfrey Simbeye said the Dar port was not utilised optimally.

He advised the government to do away with red tape on value-added tax refunds on imported raw materials to reduce the tax burden. His call came a few days after CTI policy and advocacy director Hussein Kamote appealed to the government to remove VAT on imported raw industrial materials to increase competitiveness of locally produced goods.

Media Owners Association of Tanzania executive secretary Henry Muhanika faulted the government for its increasing involvement in commercial activities rather creating a friendly business environment.

Mr Muhanika called on the government to reverse its decision on cutting advertising spending on private media, saying it would have a devastating impact.

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