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| Mr Mkulo |
The government has recorded a
budget deficit of about 214bn/- in the first six months of this financial year
partly due to failure of donors to meet their commitments.
Finance and Economic Affairs minister Mustafa Mkulo said in a speech at
the Annual National Policy Dialogue meeting over the weekend that the deficit
was also because of shortfall of collection for non-tax and local government authorities’
revenue.
The government spent about 6.05trn/- between July and December 2011 out
of total revenue of 5.83bn/- from both domestic, aid and commercial loans,
according to Mr Mkulo.In a quick reaction, shadow minister for Finance Zitto
Kabwe said the deficit was less than what it had been in the first four months
as donors have started releasing some funds.
Mr Kabwe told The Citizen in
a telephone interview yesterday that by October 2011 the deficit was 690bn/-,
and government reached a stage in which it could not pay salaries.
“Now the government can pay salaries because domestic revenue
collections have improved; the only problem has remained in development
projects,” Mr Kabwe said.
In order to reduce the deficit, the government has announced that it
plans to reduce spending by more than 500bn/- this financial year in
anticipation of low aid commitment from donors.
According to Mr Mkulo, failure by donors to meet their obligations
resulted into a hole of 640bn/-between July and December 2011. In fact donors,
who are supposed to offload funds to the government at the beginning of the
financial year, according to some agreement with the government, only remitted 1.32trn/-
in the first six months out of the promise of remitting 3.92trn/- for the
financial year 2011/12. This was equivalent to meeting obligations by 34 per
cent.
“The Eurozone crisis is partly to blame for failure by donors to honour
their commitments,” he said, adding that failure by government officials to
present projects implementation reports to donors in time has also led to
reluctance by donors.
According to figures released by Mr Mkulo, donors had only released
about 382.5bn/- out of 2.36trn/-promised
for development projects, which was equivalent with 16 per cent of the total
commitment.
The government collected only 66 per cent of targeted non-tax revenue
for the first six months. It had planned to collect about 247.6bn/- but ended
up collecting 172.1bn/-.
The reason for failure to meet the target was technical problems caused
by “lack of integrated and interfaced systems,” in government departments
according to Mr Mkulo.
Local government authorities revenue collections were short by 21.2bn/-
due to delay in charging business licence fees, which were re-introduced by the
government in the last budget. When contacted for comment yesterday on how the
government financed the deficit Mr Mkulo decline to comment citing wrong timing
by the reporter.
“You should have asked me soon after I had finished delivering the
speech last weekend. I am now in Dodoma and I do not have the speech in hand to
crosscheck what you are asking me,” Mr Mkulo.
In his speech, Mr Mkulo said that during the first six month of this
financial year, the government managed to collect 3.472trn/-, which is 99 per
cent of the target in the first half of the year.
However, the average revenue collection has increased to 289.4bn/- per
month from 230bn/- collected in the preceding year.
The tax revenue collection amounted to 3.145trn/- as compared to 2.555trn/-
that was collected in the similar period of the last budget, which is about 101
per cent of the target set in the first half.
“The good trend in tax revenue collection has been triggered by
administrative measures taken by the tax collector (Tanzania Revenue Authority)
to get revenue including the introduction of the Electronic fiscal devices to
the registered businesses,” the minister said in the Macro-economic Indicators
report issued last week.
Non-tax revenue amounted to 172bn/-, which is 69 per cent of the 247.6bn/-
target. However, the minister said that a poor performance of this type of
revenue collection was partly caused by lack of integrated and interfaced
systems for controlling revenue collection.
Revenue from Local Government (LGAs own source) stood at 154bn/- in the first six months, which is 88 per cent
of 175.2bn/- of the projected amount in the period under review.
From July to December, 2011, grants and loans of General Basket Support
(GBS) amounted to 610.1bn/-, which is 70 per cent of Sh869.4 bn/- that was
expected to come from the development partners this financial year. However,
there have been several challenges in coordinating the grants and loans in the
GBS arrangement, the minister said.
Source: The Citizen,www.thecitizen.co.tz, reported by By Al-amani Mutarubukwa
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