- The move is in response to the directives issued by President Samia Suluhu Hassan aimed at building more investor confidence on Tanzania
Dar es Salaam. In a bid to improve the climate for investment with a view to attracting investors, the government is preparing the national investment development strategy and a new investment law.
Speaking yesterday in Parliament, during the winding up of his budget, Prime Minister Kassim Majaliwa said the strategy would set the stage for strengthening coordination, promotion and a follow up on investment matters.
The move was in response to the President Samia Suluhu Hassan’s directives that she issued earlier this month when she was swearing in permanent secretaries and their deputies, as well as the heads of public institutions at State House.
To improve business environment, the Head of State directed responsible authorities to enhance policy predictability by working on the issues of complications in the issuance of work permits, red tape, delays in payments of Value Added Tax (VAT) refunds and harsh taxation system.
Premier Majaliwa said the national investment strategy would enhance the competitiveness of Tanzania as an investment destination, facilitate the entry of the private sector into the country’s national economy and create a strong competitive economy.
Furthermore, it would provide room for preparation of the electronic system for receiving and addressing complaints from investors.
He directed all ministries and institutions interlinked in dealing with investment to facilitate investment by cutting bureaucracy and distancing themselves from corruption.
“We need to build trust between the public and private sectors. This is the best way to attract investors,” said Mr Majaliwa.
On the question of work permits, he said, unfavourable conditions in the issuance of work permits were impeding investments.
Investors, the premier said, were frustrated by conditions like limiting the validity of work permits to not more than five years even if the completion of the project was taking more than ten years.
They were also discouraged by the red tape in acquiring work permits following the requirement that needed applicants to collect from the responsible institutions the certificate of confirmation for their academic certificates. The institutions include the National Examinations Council of Tanzania, National Council for Technical Education (Nacte) and Tanzania Commission for Universities.
Minister of State in the Prime Minister’s Office (Policy, Parliamentary Affairs, Labour, Employment, Youth and the Disabled) Jenista Mhagama said the government would soon launch a new system meant for speeding up the issuance of work permits to foreigners. “We’ve established a joint system that would involve officials from immigration, ministries of Investment, Industry and Trade and the Prime Minister’s office,” revealed Ms Mhagama.
Noting that the process of the issuance of permits was characterised by corruption, she said the new system would seal loopholes for the misdeeds because the responsible officials would be able to monitor the whole process online.
Minister of State in the Prime Minister’s Office (Investment) Geoffrey Mwambe said the review of the Investment Law of 1997 was at the final stages and would soon be taken to Parliament for discussion and deliberation.
“Sometimes the law itself acts as an impediment to investment,” said Minister Mwambe.
“For us to attract investors, we need a new law that will incorporate numerous issues recommended by MPs,” he said.
He added that the new law would shape the way the one stop centre at the Tanzania Investment Centre (TIC) was operating--and thus cutting the red tape.
Mr Mwambe said they would post at the Centre officials who have powers to make decisions on behalf of their institutions, instead of relying on decisions from their headquarters.
Currently, the one stop centre at TIC has 25 officials from 14 different institutions.
In another development, Minister Mhagama said upon receiving actuarial reports from the Public Service Social Security Fund (PSSSF) and the National Social Security Fund (NSSF), the government would be in a position to end problems that the funds were grappling with. Especially, she added, PSSSF, of which she pointed out that the government would come with a new sustainable pension formula for the benefits of members and the fund in general.
Minister Mhagama was reacting to lawmakers who challenged the government to provide the position on pension formula to retirees.
On Thursday Special Seats lawmaker Ester Bulaya suggested: “retirees deserve more than 25 percent lump sum payments suggested by the government and leave the remaining 75 percent for future payments.”
She also said the government should repay debts owed to social security funds.
The recent Controller and Auditor General (CAG) report shows that 26 percent of domestic debts were secured from the fund.
Noting that social security funds were in a good shape, Ms Mhagama said the total value of PSSSF, NSSF, National Health Insurance Fund (NHIF) and Workers Compensation Fund (WCF) stood at Sh11.51 trillion.