The Finance and Planning Minister Dr Philip Mpango yesterday announced government plans to abolish nuisance taxes imposed on various businesses to unleash the potential of Small and Medium Enterprises (SMEs).
Speaking to the business community in Dar es Salaam yesterday, Dr
Mpango pointed out that the plan to axe the unnecessary levies will be
realised during the 2016/17 fiscal year.
He expressed his disapproval of the taxes, saying they are not
friendly to the country’s development vision with the view of
transforming the country into a middle class economy.
He, however, did not go into specific on which taxes in particular
will be abolished but the minister cited the cashew-nut sub sector,
saying that he has been informed by a legislator from cashew-nut growing
area that there are 27 taxes charged on the crop.
“I was told by one of the legislators from cashew-nut producing
areas that the crop has about 27 nuisance taxes. This is not acceptable
if we are to empower our people and become a middle class economy,” he
said.
According to him, councils have been directed to submit their tax
regimes a task force made up of government officials and members from
the private sector has worked out on ways to get rid of unnecessary
levies.
“We have already received the team’s report and currently we are
working on it, their recommendations will be considered when preparing
the coming budget.
For instance, in the aviation industry, there have been calls to
re-examine value added tax (VAT), insurance and withholding tax, we will
work on such suggestions,” he said.
“Improving investment and business climate is the best way for a
developing country to boost growth, increase government revenue and
fight poverty. To do so, we ought to invest in improving government
administration (increase efficiency, increase transparency, eliminate
corruption), develop a simple and predictable tax regime, investing in
public and social infrastructures,” he added.
The minister told the business community that since tax exemptions
are not the best tools to efficiently achieve such results, the coming
budget will also deal with the matter.
“We need each other, so we should work and transact our businesses
in a manner that is beneficial to general public,” he further said.
Dr Mpango used the occasion to unveil government flagship projects
for the 2016/17 financial year whereby one of the priorities is the
construction of iron ore and coal mines in Mchuchuma and Liganga located
in Mbeya Region.
Other flagship projects include the use of public-private
partnership (PPP) model to revive defunct privatised industries that are
yet to be repossessed by the government as well as the construction of
the central railway to an international standards (standard gauge
railway).
Felix Mosha, chairperson of the Policy and Advisory Committee of
Tanzania Private Sector Foundation (TPSF), said the government should
work hard to restore investors’ trust and commitment but at the same
time protect local investors.
“The government should empower local businesses by creating a
window within the ministry that would help Tanzania businesses to tap
various business opportunities within SADC and East Africa member
states, we should also make sure we empower the agriculture sector as
stated in the Maputo declaration, investment in agriculture is
shrinking,” he explained.
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