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Budget for 2008/09 should be balanced
2008-05-05 09:11:03
By Editor
FACT: Tanzania is a very poor country by most income and non-income indicators. Fact: We are not alone in that category of underdevelopment.
Fact: We have not been managing our financial matters as efficiently, accountably, caringly and successfully as some of the countries we are in the same category with.
Question: Why, and why for all this long? Question: Do we have any plans to act and behave better? Question: How and when?
Any financial budgeting process, whether for personal, corporate or state use, has two dimensions - revenue and expenditure.
In the case of government budgets, provisions are made for recurrent and development expenditure covering one solid fiscal year.
The so-called recurrent spending caters for the government`s regular administrative expenses like salaries for public servants and the maintenance of law and order.
Development expenditure goes towards meeting the cost of financing things like the construction of roads, railways.
Mainly because of the poverty we are so closely associated with, a huge chunk of the government budget has always been financed by bilateral and multilateral donors.
But reports say even part of the government`s recurrent spending, including public service salaries, is covered by foreign donors.
This amounts to being excessively dependent on these donors.
Fortunately, this undesirable state of affairs has jolted the very inner circles of the Treasury into realising the danger ahead.
We now hear it is contemplating more stringent austerity fiscal measures for the coming financial year to ensure that, at the very least, the entire recurrent budget is financed locally.
However, the implementation of these measures should not mean even further hiking the already too heavy taxes.
There is every possibility that any extra rate imposed would be counterproductive because, if the truth be said, tax payers in these categories actually qualify for tax rebates.
What is clear is that there are ample taxable areas, mostly in the form of natural resource exploitation, which even state tax specialists agree have not adequately been drawn into tax dragnets.
Examples include logging and lumbering, hunting and fishing.
A glaring anomaly is that the expansive informal sector boasts a handsome 30 per cent contribution to the national cake but it is hardly taxed, the tax officers` eyes and ears focused only on the formal sector. This is wrong.
There is also an urgent need to review the eligibility benchmarks used in granting tax breaks to impostors masquerading as investors, some now dotting our urban streets hawking fake wares or running retail flower and sanitary ware shops.
We need to identify investors that really merit tax incentives.
We have lately managed to block the notorious Zanzibar tax haven route, once preferred by unscrupulous importers dodging and evading taxes.
We must do the most we can as a nation to turn Tanzania into a strong, self-respecting and highly regarded country that meets most of its administrative costs by putting in place realistic and effective tax measures.
We could expand the tax base when appropriate - without inflicting needless pain on the national economy.
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