Budget: Exemptions for review

Aim is to raise more revenue
  Economy set to grow by 7.0 pct
  PAYE slashed to 13 pct, to give relief to workers

Minister for Finance, William Mgimwa

The government has pledged to review tax exemptions which have been costing the nation trillions of shillings, retarding social and economic development.

Tabling the 2013/2014 budget estimates in Dodoma yesterday, the Minister for Finance William Mgimwa said the move was among strategies aimed at raising more revenue.

He said the exemptions would be reviewed with a view to reducing them in order to save the money for other economic activities, he said, adding that Value Added Tax exemption on tourism was being scrapped.

According to one report Tanzania loses revenues between 1.35trn/- ($847 m) and 2.05trn/- ($1.29 bn) per year.

Dr Mgimwa said the government would continue with its efforts to establish one stop centre at the Dar es Salaam port and one stop border posts at Holili, Mutukula, Sirari, Horohoro, Kabanga, Tunduma, Rusumo and Namanga.

He said the government would also build capacity of the workers of Tanzania Revenue Authority (TRA) to deal with tax evasion by some dishonest companies.

“The government through TRA will establish a new system known as revenue gateway which would become operational on 1st July this year”, he said.

He said the system which included paying tax online, would help to improve collection.

Dr Mgimwa said the government expects to raise a total of 18.249trn/- for expenditure in the next financial year.

The central government revenue is expected to be 11.154trn/-from both tax and non-tax revenue sources.

Local authorities will contribute 383.452bn/- while grants and external loans will bring in 2.693trn/- . Domestic and non-concessional loans will make available a total of 2.982 trn/- .

He said the government plans to spend 5.674 trn/-, equivalent to 35 per cent for development activities and 12.6 trn/-,or 65 per cent of the total budget for recurrent expenditure, which includes 4.763trn/- salaries for government employees, 3.319trn/- for the Consolidated Fund and 4.492trn/- for other charges.

Minister Mgimwa the next government budget would give priority to six areas namely water, energy, transport, agriculture, education and income generation.
During the year 2013/14 the government has set aside 747bn/- to solve water problems in urban and rural areas.

In improving transport infrastructure, he said the government has set aside 2.1trn/- up from 1.9trn/- allocated last year. Out of the money, 196.8bn/- will be spent in improving rail infrastructure.

On energy and mines, he said more efforts will be directed to increase production and distribution of power whereas a total of 1.1trn/- has been set aside for the work.

Dr Mgimwa thanked development partners who have been supporting Tanzania in economic development.

He mentioned them as Canada, China, Denmark, Finland, Hispania, India, Ireland, Italy, Japan, South Korea, United States, Norway, Sweden, Belgium, France, Holland, England, Germany and Swiss.

Others are African Development Bank (AfDB) World Bank, BADEA, Global Funds, OPEC Fund, Saudi Fund, European Union, International Monetary Fund (IMF) and UN agencies.

Mgimwa said this year’s budget has been directed at pushing economic growth which will be 7.0 percent this year and 7.2 percent in 2014.

He said the budget aims to bring down inflation to 6 percent by June next year.
He said the government would make sure that there is enough foreign exchange equivalent to four months imports at any one time.

We will reduce the interest charged on loans and deposits and enhance the value of the shilling.

He further said in the 2013/2014 budget, the government intends to reduce unnecessary spending in various areas, citing seminars, local and foreign travel, purchase of furniture, exhibitions and purchase of motor vehicles.

“We will reduce the number of seminars and workshops while purchase of motor vehicles would be controlled by the office of the Prime Minister”, he noted.
Dr Mgimwa called for increased cooperation, monitoring, management and use of financial resources more efficiently.

“It is my hope that all of us will work hard to improve our economy so as to achieve the Nation’s Development Plans of the year 2015 which aims to move Tanzania from a basket of poor countries. 

SOURCE: THE GUARDIAN