The opposition has unveiled a list of demands it wants the government to fulfil in the coming budget. They want to see more concetration on raising domestic revenue in the next budget, taming the inflation rate and spearheading national economic growth. The analysis was presented by Mr. Zito Kabwe, MP, who is the shadow minister for finance at Dar es Salaam news conference on Tuesday 05th June,2012.
1. Tax Exemptions
The Budget presented by the Shadow finance minister Zitto Kabwe; also asked the government to reduce tax exemptions, widen the tax base on the Skills Development Levy (SDL) and increase revenue collection from mining, oil exploration and mobile phone operators. Mr Kabwe said the government failed to deliver on an earlier promise to reduce tax exemptions from three per cent to one per cent of the Gross Domestic Product (GDP).
“We want explanations from the government and will continue demanding an increase in revenue collection. We also want all tax exemptions to be approved by the finance committee.” said Mr. kabwe in a press conference.
The value of tax exemptions now stands at Sh1.03 trillion, equivalent to three per cent of the GDP—and also the same amount offered by donors in general budget support.Mr Kabwe also wants the Tanzania Revenue Authority (TRA) to collect tax effectively from oil exploration, mining and mobile phone firms, which he accuses of evading taxes.
2. Skills and Development levy (SDL)
On SDL, Mr Kabwe proposes that all employers, including public organisations, pay up at four per cent. Only private organisations pay SDL currently, and at six per cent of salaries.
Hon.Kabwe also identified infrastructure—power and roads, especially in rural areas—as a priority in improving food production and transportation, which will help tame the fluctuation of inflation.There have been concerns that there are plenty of food grains, especially maize, in some parts of the country but they cannot be delivered to other areas due to poor roads.
4. National debt
Mr Kabwe called for a special audit in the national debt account following its rapid increase, reaching Sh22 trillion in April this year. He said: “This is a serious issue that the opposition camp will follow very closely. We will seek clarification and audit the national debt account. We want to know why the government continued to borrow and see if the money goes to targeted expenditures.”
4. Reduction of Import taxes on Food
The opposition budget proposes that the government reduce or remove import tax on food, especially rice, for a specific period in order to tame inflation. Food and non-alcoholic beverages account for 47.8 per cent in the national consumer price index.
On Inflation and Other Issues:
The inflation rate now stands at 18.7 per cent, down from 19.8 per cent last December. “If we improve infrastructure in rural areas, they will attract big economic projects which will employ more youth in the rural areas and push the country’s economy,” added Mr Kabwe.
Other priority areas include rehabilitation of the railway, including the central line, Tanga, Moshi and Arusha railways. The MP also spoke of raising domestic revenue to 20 per cent of the GDP, preparing the nation for the gas economy, reducing pay as you earn for minimum salary from 14 per cent to nine per cent, regulating education and reducing taxes for local industries which use domestic raw materials like cashew nuts, cotton and sisal.
The opposition camp will press for the removal of sitting allowances as it did last year, although the government did not accept the proposal.Mr Kabwe, who is also the chairman of the Parliamentary Committee for Public Organisations Accounts (Poac), said the country may have lost huge sums of money in the transformation of the Presidential Parastatal Sector Reform Commission (PSRC) to Consolidated Holding Corporation (CHC), given the lack of records on the assets of public companies.
The CHC has been asked to compile a list of all assets of public organisations before and after transformation of the PSRC.The Poac has already formed a task force to probe the number of assets that the National Milling Corporation (NMC) had before and after the transformation.
What do you think about the Opposition’s Budget ideas/analysis ; Comments ?
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