JPM reads from Nyerere script to tax his pension

Dar es Salaam. It is now official. President John Magufuli, the Vice President, Prime Minister, cabinet ministers, the Speaker, Deputy Speaker and other top government officials’ retirement packages will be taxed.

President Magufuli took the decision to tax his send-off package and that of his assistants after legislators bade for blood in the tax row during debates on the budget speech.

As they protested the decision to tax their send-off packages, MPs said if the issue was equality then everybody, including the President, the Vice President, the Prime Minister and cabinet ministers should be subjected to the same taxes.

It seems they hoped that their insistence would scare the government from going on with its plan to tax the retirement packages.

And so the decision by President Magufuli to grant their wishes might have come as a surprise, if not a shock, to many of them.

In deciding to chop his own retirement package, however, President Magufuli has borrowed heavily from President Julius Nyerere’s script in 1966 when he reduced his salary by 20 per cent in a bitter confrontation with students from the University of Dar es Salaam. The students, who had marched to the State House to present their complaints to the “highest authorities in the land”, were protesting against compulsory National Service that had just been introduced. 

They objected to the government’s decision to pay them 40 per cent of what they would earn in civilian life. They told President Nyerere to, either pay them in full if they accepted national service, or reduce the salaries of senior civil servants to bring equality in treatment.

They told President Nyerere that if their demands are not met they “ shall not accept National Service in spirit… and the battle between the political elite and the educated elite will perpetually continue,” according to a book entitled Nyerere of Tanzania: The first decade 1961-1971 by William Edgett Smith.

President Nyerere, incensed by the students’ attitude and their failure to understand the direction he was taking the country -towards socialism and self-reliance - announced that he was slashing his salary and that of senior government officials immediately.

“You are right when you talk about salaries. Our salaries are too high. You want me to cut them? I’m willing to slash salaries. Do you want me to start with my salary? Yes, I’ll slash mine,” President Nyerere told the students. 

It is fair to say the students had expected some form of compromise from President Nyerere but they were shocked by his decision to cut his own salary. Cries of   “No, No” could be heard from the students as the President announced he was cutting his own salary first.

But President Nyerere continued: “I’ll slash the damned salaries in this country. Mine, I slash by 20 per cent, as from this hour… this damned country! The salaries are too high! Too high for Tanzania… These are the salaries which build this kind of attitude in the educated people…” Edgett Smith says in his book.

He also dismissed the students from the University with immediate effect.  

The students’s mistake was the failure to understand and, even, appreciate the introduction of the National Service. And this disturbed President Nyerere.

It may be the same thing troubling President Magufuli. He has repeatedly wondered why some government officials fail to understand the need for spending cuts.

The other day he said he had heard that a cabinet minister was complaining about the reduction of the OC budget (other charges) which is usually allocated for entertainment, travel etc. He called the minister, President Magufuli narrated, and asked him to tender his resignation if he felt he could not live without the OC budget. The minister did not tender the resignation.

The lesson that President Nyerere learnt, and President Magufuli seems to have also learnt, however, is that if you want to chart a new course of direction you have to show an example.

Tax your income first, if you want others to follow suit. Slash your salary first, if you want others to slash theirs.