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New HESLB clampdown now targets employers

Thursday December 29 2016
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HESLB Executive Director Abdul-Razaq Badru.

Dar es Salaam. The Higher Education Students Loans Board (HESLB) has formed a task force that will make sure employers submit deductions and the names of their employees who are HESLB beneficiaries.

The task force is set to start operating from Monday, about two months after the National Assembly passed amendments to the HESLB Act, 2004, which among other things, increased the amount of deductions from eight to 15 per cent for all beneficiaries in the formal employment system. The amendments also tightened the responsibilities of employers as they are now responsible for submitting the names of their employees, deduct the statutory percentage of their salaries and remit the money to the board.

Most employers, according to HESLB Executive Director Abdul-Razaq Badru, have been violating the law by failing to perform their statutory responsibilities.

“Because of these violations, starting on Monday, the task force will start going around to employers’ offices so that they can start complying with law,” he said.

Mr Badru noted that the task force consisted of HESLB employees and other individuals from outside the board, who he declined to disclose and added that they would have 14 days to complete their task.

According to the November amendments, the employers will be compelled in 28 days to submit the names of HESLB new employees for checking the loan status of the beneficiaries. The HESLB or its agent shall, after notifying the employer, have power to inspect any relevant record of the employer for searching the beneficiaries’ information.

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“Where an employer fails to notify the board without reasonable excuse that he has, in his employment a beneficiary within a specified period, that employer commits an offence and shall, on conviction be liable to a fine of not less than Sh1 million,” reads part of the amendments.

Where an employer fails to deduct or remit deductions to the board within the required time, the board shall charge such an employer 10 per cent of the total amount, which is due for repayment. When the employer is unable to pay the charge imposed, then he or she commits an offence and “is liable on conviction to a fine of not less than the amount un-remitted or to imprisonment for a term of not less than 36 months.”

“…where an employer is a body corporate, the chief executive officer or any other accountable officer of such a body shall be liable for the penalty,” reads part of the amendments.

In the event that any person is convicted of obstructing an employee of the board or its appointed agent from doing any act authorised by law shall face a fine of not less Sh7 million or to imprisonment for a term of not less than a year or both.

Since taking office a year ago, President John Magufuli’s government shook up the HELB administration to bring about effectiveness in collecting debts from beneficiaries and control fraudulent expenditures.

Already the board has published the names of some of the 142,470 former students, who are yet to clear their debts amounting to Sh239.3 billion and it has also threatened to take them to court.

The list of beneficiaries, who have not repaid their loans, include those, who took loans between 1994/95 and 2005, when the then Ministry of Higher Education was charged with the role of issuing loans to students.

When HESLB started operating in 2005, it took over the responsibility of pursuing payment of loans amounting to Sh51.1 billion issued by the ministry to 48,378 students.

By June this year, 379,179 Tanzanians had benefited from the loans, which started been disbursed to higher learning students by the government in June 1994. The amount issued to these beneficiaries adds to Sh2.6 trillion. A total of 238,430 former students were supposed to have started repaying their loans amounting to Sh1.4 trillion after the expiry of the grace period.

However, by November 15, the HESLB had only tracked and issued loan bills to 93,500 beneficiaries. But only 81,055 have repaid their debts, while the remaining 12,445 haven’t.

From July to November this year, Sh26 billion had been collected from some of the beneficiaries.

For the 2016/17 academic year, Sh483 billion has been set aside for the HESLB, while Sh56 billion will come from the revolving fund.

 

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