Tanzania budget rises to 22.5tri/-

Finance Minister Saada Mkuya (pictured) yesterday pegged Tanzania’s 2015/2016 budget at Sh22.48 trillion as the government intensifies efforts to boost revenue collection and reduce donor dependency.

The amount, presented to Members of Parliament in the city, is Sh2.68 trillion more than the Sh19.8 trillion 2014/2015 budget that was approved in June last year.

At least Sh14.82 trillion of the Sh22.48 trillion will be sourced internally, with efforts being directed towards enhancing the use of Electronic Fiscal Devices in order to seal loopholes for revenue leakages.

Tanzania Revenue Authority alone will be required collect Sh13.35 trillion, reflecting 90.1 per cent of the total domestic revenue.

The money will be Sh2.053 trillion more than the Sh11.297 trillion that the taxman is expected to garner in the current financial year.

The government will also reduce tax incentives to collect much-needed revenue as the country moves towards a donor-free budget, Ms Mkuya said. “We will also take measures to improve the business climate so as to attract informal business operators to formalise and help the government collect tax from them,” she added.

Part of the money will also be sourced through a review of various tax rates. Property owners will also start contributing immensely to government revenues during the 2015/2016 financial year as a plan is in the offing to start charging them based on the value of the property.

Property owners currently pay a uniform tax that does not take into consideration the value of the property in question.

According to Ms Mkuya, the government plans to collect Sh949.2 billion from non-tax revenue and Sh521.9 from municipals.

This is expected to help government institutions, agencies and independent authorities collect enough revenue to finance their operations instead of depending on the central government for their financial requirements.

The government plans to borrow a total of Sh5.77 trillion to finance its budget and raise Sh1.89 trillion from development partners. “We have decided to significantly reduce donor dependency and put more effort into mobilising domestic revenue,” said the minister.

But the proposed budget came in for immediate criticism from some MPs. Parliamentary Committee on Economic Affairs, Industry and Trade Chairman Luhaga Mpina said Ms Mkuya’s figures sounded good but there was little to show how the plan would be implemented.

Said Mr Mpina: “The current budget has not seen even half of the promised funds being released. How can the government come up with bigger figures? We are waiting to get clarification on exactly what this means.”

He accused the government of having a tendency to come up with many project ideas that do not materialise ultimately and added: “We have been urging the government to select a few projects to implement rather than come up with very many and fail to implement them.”

Even the five-year development plan had failed, he added, and most projects were either at the initial stage or had not been touched at all.

Babati Rural MP Jitu Soni said the government had given no indication of plans to boost the number of processing industries that could add value to goods for export. 

“By continuing to be a net importer,” Mr Soni said, “the country will continue to lack funds to implement its development projects.”

He also expected to hear more on improving sectors that would offer direct jobs for more people in areas such as agriculture, fishing and livestock keeping. 

But, he complained, the government had failed to indicate a single plan aimed to improve agriculture, Mr Soni added: “In doing so, the government will continue to see all its projects never fully implemented as it will continue to lack funds.”

Minister of State in the Prime Minister’s Office Mary Nagu told the House that the government had failed to implement development projects due to lack of funds. Up to March this year, the government had released only Sh2.4 trillion, reflecting 38 per cent of the estimates for the year 2015/2016.

According to Ms Mkuya, the government plans to spend Sh16.71 trillion on recurrent expenditure and Sh5.77 trillion on development expenditure. This amount is lower than the Sh6.31 trillion that was meant to beef up development projects in the financial year that is ending.

Of the development budget, the government plans to raise 75 per cent from domestic sources.The government’s priorities in the 2015/2016 budget include financing the General Election in order to complete current projects and push for rural electrification, access to water for the rural population and to improve human capital.

 The 2015/2016 budget is the last budget for the Fourth Phase government. It comes at a time when the Millennium Development Goals and the Five-year Development Plans come to an end.
Source: The Citizen, reported by Veneranda Sumila, from Dar es Salaam, Tanzania
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