BY LUSEKELO PHILEMON
28th June 2013
Call for a budget that is pro-poor Govt to issue its stand today
Following the MPs’ threat the government is today expected to issue its stand on the matter.
Debating the bill in the House, lawmakers called on the government to explore other sources of revenue rather than relying on taxing fuel, noting that its sensitivity will scale-up inflation.
Ubungo MP, John Mnyika said for the government to continue increasing the imposed tax on fuel every year has a negative impact to the country’s economy and ordinary Tanzanians and as such, suggested the need for the government to look into alternative sources of revenue.
“Tax on fuel, mobile phones…is a thorn to the economy and hikes the cost of living…there are many other areas to be tapped,” the MP said, pledging not to support the budget.
Luhaga Mpina (Kisesa, CCM) also urged the government to reduce tax exemption as an alternative means to boost the country’s coffers.
“It is high time for the government to reduce tax exemptions for the betterment of our people from increasing tax burden,” he said.
Kigoma Urban MP, Peter Serukamba, said air transport is no longer a luxury in the country hence there is no need to impose more tax on leasing airplanes.
“Airline industry is still young in Tanzania and needs to be nurtured,” Serukamba said, noting “…chartered airlines are not performing well because of the high taxes and some operators are considering closing down their businesses…,”
Nominated MP, James Mbatia seconded the other lawmaker noting that higher fuel taxes will raise the costs of living and he too suggested the government explores alternative revenue sources and he suggested taxes be levied on export of semi-processed sunflower seeds and cakes instead of fuel.
“In the export of semi-processed sunflower seeds and cakes the government will collect 16bn/-, which will be a big relief to our people…” and that “…next year we’re projecting to receive over two million tourists but we’ll not meet that target if we impose too many taxes on the sector,” he said.
Kawe MP, Halima Mdee (Chadema) also discouraged tax on fuel, cigarettes, beer, and soda, saying: “….this repeated gesture every year shows how public officials are reluctant to think of new sources of revenue.” Alternatively, he asked government to reduce tax exemptions on individual companies.
“This will pose a very big and negative impact on the lives of our people. The government seems ‘deaf’ on this issue. Don’t touch fuel...” asserted Mbozi East MP Godfrey Zambi. Chairperson of the Parliamentary Budget Monitoring Committee, Andrew Chenge also asked the government to put a hold on the increase of taxes on imported used vehicles.
“It is the opinion of the parliamentary committee that a car is no longer a luxury but a necessity vital for the nation’s economic development…” he said.
The committee also opposed the government’s plan to impose taxes on mobile phone users, saying there are lots of untapped taxes and not these sectors (fuel and mobile phones) that directly increase the cost of living.
Presenting recommendation of the opposition camp in the House, Special Seats MP, Christina Mugwai (Chadema) asked the government to come up with a budget which is pro-poor. She said the current budget adds burden to Tanzanian tax payers, while there are countless areas which are suitable for tax increase without having such profound and immediate negative effect on the public.
Earlier tabling the bill, Minister for Finance Dr William Mgimwa expressed the government intentions to amend some of the important areas to broaden government’s tax base.
He said the bill proposed amendment on the Excise Act, with a view to increase rates of Excise Duty on Non-Utility Motor Vehicles from 20 to 25 percent for the vehicles aged more than ten years and also by introducing a new Excise Duty of 5 percent for the Utility Vehicles aged more than ten years to be identified by a given HS code.
The bill proposed tariff modification on petroleum by introducing new a tariff and modifications on various goods like carpets, perfumes, water, beer, juice, wine, cigarettes, cold drinks, furniture and non-oil products. The proposal introduces new Tariff on Telecommunication services at the rate of dutiable value and the monthly Duty on SIM cards.
According to the bill proposal, every SIM card owner will be required to pay an accumulation of 12,000/= per year. On mobile phone money transfers, the phone user will start paying taxes when doing transactions which is over 30,000/-.
The minister said the bill also intends to amend the Executive Agencies Act, (Cap.245) in section 12 by imposing duty on each Agency of ten percent of its annual gross revenue to be submitted to the Consolidated Fund.
“The amendment is aimed at increasing Government revenue,” he said, adding that other amendments are on Energy and Water Utilities Regulatory Authority Act, with a view to imposing a requirement on the Authority to submit 10 percent of its annual gross revenue so as increase government revenue.
“We also plan to amend the Income Tax Act, with a view to widening the tax base and reducing income tax on employment.”
The government also intends to introduce withholding tax on service fees payable to residents, service fee on technical, management services rendered to a mining business by non-resident persons, commission derived from money transfer services rendered through mobile phones, income derived from leasing of aircraft and payment derived from supply of goods to a government institution.
Under the bill, the government is proposing amendment to the National Parks, Ports and Public Finance Acts with a view to imposing a requirement on agencies, authorities or government institutions to submit 10 percent of its annual gross revenue so as increase government revenue.
The bill also proposes to amend the Public Private Partnership Act, in an effort to attract investors into development projects for the growth of the country’s economy.
Road and Fuel Toll Act have been amended to add the amount of fuel levy from Two Hundred Shillings to Two Hundred and Sixty Three shillings per litre. “This amendment aims at improving the collection of Government revenue.”
According to Mgimwa, the bill proposes the amendment of the Tanzania Investment Act by amending section 19 with the view to delete the list of goods entitled to get exemption. “The amendment aims at reducing the number of exemption granted to the major investors.”
SOURCE: THE GUARDIAN
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