Tanzania private sector lines up 50 proposals on tax reforms
TPSF's Executive Director, Mr Raphael Maganga
What you need to know:
- The proposals, which cut across key economic sectors, will be discussed by different stakeholders, including business leaders, investors, tax policy experts and practitioners, research institutions, and others, before submission to the government taskforce on tax reforms.
Dar es Salaam. The Tanzania Private Sector Foundation (TPSF) has listed about 50 consolidated proposals for tax and other charges reforms in an attempt to reduce operating costs, stimulate investment, and increase the competitiveness of local products.
The proposals, which cut across key economic sectors, will be discussed by different stakeholders, including business leaders, investors, tax policy experts and practitioners, research institutions, and others, before submission to the government taskforce on tax reforms.
TPSF's Executive Director, Mr Raphael Maganga named the focus areas as agriculture, manufacturing, banking and financial services, tourism and hospitality, trade and commerce, construction, mining, and transport and logistics.
“We are proposing a reduction in production costs to increase the competitive edge of our local strategic products against imported products,” he said.
Some of the costs proposed for reduction include the electronic tax stamp (ETS) cost, which TPSF said should be reduced by 55 percent to lower production costs in the manufacturing sector.
In the agriculture sector, he said, they are proposing preferential treatment by reducing corporate tax from the current 30 percent to 10 percent for agribusiness for three years to compete with countries in the East African Community and SADC regions.
According to him, they are proposing a review of tax on packaging materials to reduce post-harvest losses in the agriculture sector.
Other areas include gradually reducing the Skills Development Levy (SDL) from 3.5 percent to two percent and expediting audits to avoid delays on value-added tax (VAT) refunds.
TPSF notes that some agriculture companies have been seeking VAT refunds that remain unsettled since 2017.
Other proposals include the removal of the levy on mobile money withdrawals to reduce costs.
He said the proposals have been accurately analysed by the commissioned consultants and the policy team.
TPSF is expected to submit the tax proposals to the taskforce on reforms on April 6, 2024. Mr Maganga recalled some of the previous success stories in reducing advertising tax on billboards by 30 percent, while the SDL reduced from four percent to 3.5 percent.
The VAT registration threshold was also increased from Sh100 million of gross revenue to Sh200 million per year.
