Govt moves to rescue the Budget

Faced with the threat of a possible rejection of the 2012/13 Budget, the government beat a hasty retreat yesterday and formed a special committee to review the proposals and make changes to bring it in line with the five-year development plan. 

The Citizen has reliably learnt that Prime Minister Mizengo Pinda formed the committee of six ministers after it became apparent that the government side was up against strong opposition.

This came on the heels of an earlier government move to change the budget approval system that allows the passing of the Finance Bill at the end of the budget meeting in August. This would allow for a major overhaul of the budget speech and various ministerial budgets that would then be tabled in two months’ time.

This is intended to rectify an anomaly whereby, after passage of the main budget, any proposed changes related to ministerial budgets arising from debates on the main one were literally left hanging as incorporating them in the already endorsed budget would be  a breach of procedure. 

This meant, then, that the proposals would be kept pending for debate and probable inclusion in the subsequent budget the following year. 

The changes came against the backdrop of heavy criticism from MPs, who said the Budget had failed to reflect the requirements of the development plans they endorsed last year.

Making the announcement after the question-and-answer session, Speaker Anna Makinda said the changes to the Finance Bill would enable the government to take into consideration contributions by MPs and various parliamentary committees and improve the main budget before debate on it is concluded on Friday.

If Parliament did not approve the Finance Bill by June 30, she said, the government would, in the normal course of events, have no legal basis to collect taxes. But a review of existing laws and regulations appears to have established that there were other means for the government to collect revenue beyond the Finance Act.

Ms Makinda added: “After reviewing the activities of Commonwealth parliaments, we have established that they usually pass the Finance Bill at the end of the budget session. The only difference is that they start their sessions early and finish them before June 30 to enable the new law to be used by the government when the new financial year starts on July 1 each year.”

The new system means the debate will run for five days instead of four and the budget will be passed the same day. The system was adopted in order to give the government time to incorporate the views of MPs and committees and make appropriate changes. 

According to the information by The Citizen yesterday the immediate task of the Prime Minister’s team is to rescue this budget. The team will also help in drafting the 2013/14 Budget. Among other things, the team of six ministers is required to come up with new revenue sources to be used to boost government coffers.

The government wants to raise more money to compensate for taxes that will be scrapped following criticism by the Parliamentary Committee on Finance, the shadow minister for Finance and other MPs who have debated the budget so far.

Some of  the taxes likely to go, according to sources who preferred anonymity, include the airtime levy, which has been increased by two perc ent from 10 per cent. 

Measures to adjust various taxes are expected to be announced tomorrow, when Finance Minister William Mgimwa winds up the budget speech to pave the way for the appropriation committee before lawmakers vote for the Budget.

Other charges which will be dropped include proposed levies on people who conduct motorcycle business, popularly known as bodaboda.

Members of the Prime Minister’s team, which conducted its first meeting on Tuesday include Dr Mgimwa, the Minister of State in the Prime Minister’s Office (Policy, Coordination and Parliament) Mr William Lukuvi, and the Minister for East Africa Cooperation, Mr Samuel Sitta.

Other members of the team, which was formed during the Cabinet working meeting conducted here last Saturday, are deputy Minister for Communications, Science and Technology, Mr Januari Makamba, Deputy Minister for Food Security, Agriculture and Cooperatives, Mr Adam Malima and the deputy minister for Home Affairs, Mr Pereira Ame Silima. Before this new portfolio, Mr Silima served as deputy minister for finance.

Since the Budget debate started on Monday, MPs have been criticising the government for diverting from the requirements of the five-year development plan adopted last year.

Among other things, the plan directs that share of the development budget should not be less than 35 per cent of the entire budget and that not less than Sh2.7 trillion of it should be from local revenue.
Source: The Citizen,, reported by Neville Meena and Peter Nyanje

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