Opposition Parties ‘spin-dance’ as Tanzania’s 2018/19 Budget  Incorporates Public Interest Views from ‘Minority’

Upendo Peneza

By TZ Business News Staff.


Two Tanzanian political opposition parties are ‘spin-dancing’ to celebrate inclusion into the Tanzania 2018/19 Government budget a public interest proposal tabled by the minority in Parliament.

The business community is also likely to be celebrating as a myriad of nuisance taxes are proposed to be scrapped off. “The Government is committed to improve the business environment,” the Government Spokesman Dr. Hassan Abbas told TZ Business News.

The Minister for  Finance and Economic Planning, Dr. Philip Mpango  announced in Parliament on  Thursday, June 14, 2018 the Government had proposed to scrap Value Added  Tax on women’s sanitary pads to make the product available and affordable to women and girls across the country, particularly school girls and rural women.

Zitto Kabwe

The Member of Parliament for Kigoma Urban on the opposition ACT party, Zitto Kabwe, described the announcement as a significant win for the opposition because the item in the Government  2018/19 budget is based on a submission  by member of Parliament  for Geita (Special Seats) from Tanzania’s lead opposition party Chama Cha Demokrasia na Maendeleo (CHADEMA), Upendo Peneza.

In a statement on social media, Zitto Kabwe praised the MP Upendo Peneza for originating the public interest idea to help women in Tanzania. In a seperate statement, also published on social media, CHADEMA expressed surprise and excitement their idea has been incorporated into the 2018/19 Government budget proposal.

CHADEMA distributed on social media a photograph of the MP Upendo Peneza asking the public to “like this picture to congratulate our Member of Parliament for the excellent job she has done because it is very difficult to convince members of Parliament from [the ruling Chama Cha Mapinduzi] CCM”

“Upendo, despite having only two years of experience in Parliament, managed to present this motion in Parliament and to unify  MPs from all political parties,” Zitto Kabwe  said.

Upendo Peneza holds pad on left with Dr. Philip Mpando in Parliament.

Dr. Mpango has meanwhile announced a sweeping overhaul of nuisance taxes to improve the business environment while punishing imports. Tariffs will be increased on imported alcohol, cooking oil and betting machines to protect domestic products. Imported mineral water will attract 60% import duty, up from 25% while imported meat and sausages will attract 35% import duty, up from 25%. Biscuits, chocolate and tomato source will also attract 35% import duty, up from 25%.

Value Added Tax  is to be waved on animal and poultry feed additives. The export fees charged on locally produced salt will be reduced markedly.  Taxes on betting will be increased as follows:  an increase from 6 per cent to 10 per cent on gross sales in sports betting operations; from $14 to $44 per machine/month on slot machines; from 15 per cent to 18 per cent on gross gaming revenue for casinos.

Dr. Mpango has  proposed amendment of  the Income Tax Act to reduce corporate tax from 30 per cent down to 20 per cent for new investors in the pharmaceutical and leather industries for five years from 2018/19 up to 2022/23.

The economy  is planned to grow by at least 7.2 per cent  during 2018/19 financial year. The Government budget deficit is  projected to be 3.2 per cent of GDP. The Finance and Economic Planning Minister outlined five priority areas in the Tsh. 32.5 trillion 2018/19 Budget as Government pushes the country toward industrialization with the financing largely sourced from tax.

The Minister identified agriculture as  priority number one, adding that more funds will be allocated to improving irrigation, warehousing and marketing.

The government will also strengthen the supply of agricultural inputs and implements, improve extension services, improve research and dissemination of findings to the people and development of livestock and fisheries sub sectors. The sector employs nearly 70 per cent of Tanzania’s working population and provides 65 per cent of industrial raw materials.

The second priority will be industries with special focus on textiles, leather industries, meat and fish, edible oils, medicines and medical equipment, food and animal feeds
and mining.

Social services especially water is the third priority area. Distribution of lean water, financing of free education and allocation of resources to increase distribution of medicines, medical equipment and reagents in health facilities will be the main focus as the country looks to build a more healthy and effective labour force.

The government also aims to construct and rehabilitate supportive infrastructure especially increasing electricity generation from different sources, to continue with the construction of the new central railway to standard gauge, construction of roads connecting regions and rural roads and to improve air and marine transport.

The minister praised the decision by President Magufuli to acquire new aircraft now being operated by Air Tanzania Company Limited. Other priorities include ease of land acquisition and ownership, to improve communication services, finance and tourism and to improve defence and security, good governance and justice.