Zanzibar govt raises budget to Sh2.5 trillion to fund 13 crucial areas

Wednesday June 15 2022
Saada Mkuya

Minister of State in the President’s Office (Finance and Planning) of Zanzibar Saada Salum Mkuya opens a briefcase carrying Isles’ budget speech for the next financial year 2022/2023 in the House of Representatives in Zanzibar yesterday. PHOTO | CITIZEN CORRESPONDENT

By Gadiosa Lamtey

Dar es Salaam. Zanzibar government will focus on 13 key priorities as it raises its budget for the financial year 2022/23 in an effort to change the face of the semi-autonomous Indian Ocean archipelago.

Zanzibar will spend a total Sh2.5 trillion in next financial year.

The amount is an increase of over Sh700 billion compared to the Sh1.8 trillion that was spent during the 2021/22 financial year.

Presenting Isles’ budget in the House of Representatives in Zanzibar yesterday the Minister of State in Zanzibar President’s Office (Finance and Planning), Dr Saada Salum Mkuya, said out of the Sh2.5 trillion, Sh1.353 trillion will be directed into development expenditure while the remaining Sh1.220 trillion will go into the recurrent expenditure.

Detailing the priorities, Dr Mkuya said special focus will be on energy, investment, infrastructure, education, access to clean and safe water and the blue economy.

Other priority areas are: public empowerment, finance, communications, agriculture and tourism and natural resources development. She said during the coming financial year, the government will spend Sh89.66 billion on activities that are linked to the blue economy. Some of the issues to implemented include construction of boats for normal use and deep sea fishing.

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The government will also start initial stages of setting up oil and gas reservoirs. It will also construct oil and natural gas exploration and extraction centers.

In efforts to strengthen the health, education and water sectors, said Dr Mkuya, the Zanzibar government will foster its efforts in implementing existing and new projects. The government, she said, was also allocating a total of Sh588.61 billion for consolidating social services and promoting human development.

The Zanzibar government was in talks with companies that own social networking platforms in an effort to see how the government could collect Income Tax and Value Added Tax (VAT) on service businesses offered online (Digital Services).

“In addition, the step aims to simplify the procedure for registration of taxpayers who provide digital services without having residence here in the country. For the next financial year 2022/23, the government proposes to start collecting VAT on the services provided online. A total of Sh6.0 billion is expected to be collected in this particular area,” she said.

Zanzibar will put special emphasis on the promotion of the domestic economy by encouraging consumers to buy locally manufactured goods.

In that regard, the government is recommending to raise its VAT relief from 80 percent to 100 for Non-Strategic Investors at the time of procurement of goods in the country for construction.

Zanzibar will also start collecting a five percent income tax on foreign based companies that transport cargo and passengers. This will see the country raising its revenues by Sh1.3 billion.