Bunge passes Budget after government clarifies thorny issues

Wednesday June 23 2021
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By Alex Nelson Malanga
By Rosemary Mirondo

Dar es Salaam. Parliament yesterday passed the 2021/22 Budget after the government clarified a number of issues raised during debate on the financial plan.

The final Budget was raised to Sh36.68 trillion from the Sh36.3 trillion plan that was proposed by Finance and Planning minister Mwigulu Nchemba in his speech to Parliament on June 10.

Apart from raising the Budget, the government also clarified that the new monthly Sim card levy ranging from Sh10 to Sh200 would depend on the ability of users to recharge their balances.

It also said that despite complaints that the cost of electronic tax stamps (ETS) was too high, the government needed them in its revenue collection endeavours.

The government also spoke about poor road networks and failure of eligible applicants to access loans from the Higher Education Students Loans Board (HESLB).

Other hot subjects were ring-fencing the money disbursed for development projects and the use of prepaid electricity meters (Luku) to determine who should be responsible for paying property tax.


Winding up debate in Parliament yesterday, Dr Nchemba said MPs had not clearly understood how the government intended to levy the Sim card charges, adding that the money would be deducted on a monthly basis.

“Because this was not clear, it was thought that if a person does not recharge their phone, the outstanding sum will be deducted the day they do so,” he said.

However, Dr Nchemba said that was not true because the recommendation was made based on statistics on the number of phone users.

He said eight million people who recharge their Sim cards with Sh1,000 worth of airtime would be deducted Sh5, while more than 60,000 people spending at least Sh100,000 monthly will pay only Sh222.

People recharging between Sh7,000 and Sh10,000 will have Sh76 deducted, while those recharging between Sh10,000 and Sh25,000 will pay Sh112. Those recharging Sh50,000 monthly will pay Sh186.

Dr Nchemba said it was time Tanzanians accepted that they had a noble obligation of contributing to their country’s development.

“This country will be built by Tanzanians because that is their responsibility.”

He said the country had major strategic projects that needed trillions of shillings to execute, including the standard gauge railway, Julius Nyerere hydropower station and roads, adding that it would be imprudent to take loans for them and leave a huge burden for future generations.

His deputy, Mr Hamad Masauni, reacted to the issue of ETS, saying a team of experts had concluded that while costs were high, the stamps were currently indispensable.

“We have recommended that the Tanzania Revenue Authority (TRA) meet with stakeholders to find ways of reducing costs, which are a big burden to the public,” he said.

Furthermore, Mr Masauni said the government was also conducting a study on the matter with the aim of collecting enough evidence before meeting with investors.

On the issue of poor roads, especially in rural areas, Dr Nchemba said the government would invest Sh322 billion in the construction of roads in areas where they are impassable.

This is in addition to Sh400 billion that was approved for the Tanzania Rural and Urban Roads Agency (Tarura) budget, which would be used for spot and periodic maintenance.

“It is awkward to see that some areas have public primary schools and dispensaries, but no roads to reach them,” said Dr Nchemba.

During the budget debate, some lawmakers sought to know the government’s position on students who missed out on loans from HESLB despite having all the required qualifications.

Dr Nchemba said in response that the government would issue Sh70 billion to 21,000 students who failed to join university after they failed to secure loans, and their parents and guardians were unable to pay for their studies.

At least 11,000 students missed out on loans last year, and 10,000 this year.

“We are going to provide Sh70 billion in addition to the Sh500 billion we have disbursed so far,” Dr Nchemba said.

“If a child passes an exam, it brings joy to a family, but grief if he or she fails to join university due to not being able to get a loan.”

MPs were also unhappy with the government’s plans to start using the Luku system to expedite payment of property tax.

They challenged the government by asking questions such as: how should a tenant pay property tax? What about buildings with several electricity meters, or those that have no electricity?

In response, Dr Nchemba said everything was in place to ensure that the project was successful.

“Automation of property tax collection is all about programming,” he said.

He added: “The Energy minister has assured us that with programming, the government can know a house with more than one meter, the usage trend, and who is supposed to pay.”

On the issue of ring-fencing, which was raised by the majority of MPs who debated the Budget, Dr Nchemba assured legislators that the government of President Samia Suluhu Hassan would ensure that funds allocated for a particular purpose would not be spent on anything else.

Ninety-four percent of MPs voted in favour of the Budget. A total of 361 legilsators voted “yes”, 23 abstained and five were absent.