This year’s Budget speech by Honourable Saada Mkuya Salum came against a challenging backdrop of revenue collections for the current year. In particular, although collections for the nine months to March were 20% up on the preceding year, they were still approximately 10% behind the ambitious budget that had been set.
Last year’s budget had included a number of controversial new taxes – including the 0.15% excise duty on money transfer, the significant increase in taxes on telecommunications, and the 5% resident withholding tax on services.
A very commendable move in this year’s Budget is the removal of the 0.15% excise duty on money transfer. This is now replaced with a 10% excise duty on bank charges
Actual GDP growth of 7.0% in 2013 compared to 6.9% in 2012
Annual inflation rate in 2013 was 7.9% but had declined to 6.3% by April 2014
Tax collections was 10% behind budget
Removal of 0.15% excise duty on money transfer
The lowest PAYE marginal tax rate reduced to 12%
increase in Domestic Borrowing
Reduction of withholding tax rate on payment of directors fees to 15%.
•• Enhance the role of the private sector in development.
•• Widen and enhance revenue collection.
•• Implement energy sector projects to plug the deficit in electricity
•• Improve transport infrastructure to accommodate a growing economy
To implement the 2014/15 budget, the government will continue to focus on the initiatives in place and their respective priority areas in order to achieve the objectives of the Tanzania Development Vision 2015. On the basis of this, the Government will continue to focus on mainly on these key strategic areas:
* Resource mobilization *Agriculture * Water *Education
* Energy, and Transport
I will be posting more Reviews on Tax and Fiscal Measures Shortly