Tax Break Everybody…..

By Jaston Binala.

I was going through the government 2014/15 budget speech last night when I discovered a very clever tax break; well timed, well calculated!

Now we all know it is easy to calculate profit and loss from easily verifiable revenue like salaries, the transportation business where all you do is count trucks and buses. It can get a little tricky calculating some business profits where the equity is kinda tricky. So, well, i guess I need to understand why some taxes and fees were not read! But…even the trading licence?

Why was the trading licence mumbled? But the Pay As You Earn (PAYE) announced with pomp and funfair? Elections blues isn’t it?. What amount is the Ministry of Industry and Trade wanting to impose as a trading license? Anybody know? 

Finance Minister Saada Salum Mkuya said in Parliament: the Ministry of Industries and Trade have submitted proposals to impose various rates of business licensing fees through the Business Licensing Act, No. 25 of 1972. I propose to make amendment to the Business Licensing Act, No. 25 of 1972 to enable the Government impose the proposed business licensing fees. How much is various rates?

Now watch how she becomes soft, kind and specific on those who will matter this coming October during local governments elections:

Madam Speaker, the fourth phase Government under His Excellency Dr. Jakaya Mrisho Kikwete has continued to improve benefits of public servants including salaries. As a continuation of these efforts, in 2014/15, the Government has planned the following: (i) Raise the minimum wage for public servants; and (ii) Review the Pay as you Earn (PAYE) structure by reducing the tax rate to 12 percent, from the rate of 13 percent in 2013/14, while the rate was 18.5 percent in 2005/06.

The Government is aware of the importance of retired employees who have contributed immensely to this Nation. Currently, the retired employees are divided into two categories that is Government retirees who did not contribute to Social Security Funds and are paid shillings 50,000 per month and retirees whose pensions are pegged on their respective contributions to the Funds.

The Government is aware that the current amounts do not reflect the real situation. In an effort to address this problem, the Government is reviewing these rates in order to improve them depending on Government’s budget ability and to ensure that pensions are paid timely. In addition, the Government in collaboration with Social Security Funds will continue to review and rationalize the formula for computing benefits with a view to harmonise benefits paid by all Social Security Funds. Any tax breaks for entrepreneurs? How much will those ‘various rates’ be?

You are going to say this writer wants cost free trading licences the business community has enjoyed in the past. Well, yes, you are right! I want free trading licenses brought back, but taxes are necessary. I have no problem with that…

Of course I’d rather have big business get higher taxes, but taxes should be paid. We need infrastructure, we need roads, we need health services we need passport control workers paid on time, etc. Taxes should be paid.

But I’d rather hear mining companies have no 5 year tax waiver. We have a comparative advantage in so much of the wealth we have in this country we don’t need no tax waivers to attract anybody around here.
Imagine a tax waiver to attract an investor in Tanzanite Mining! It’s a big joke!; an insult indeed to the human brain.

If you don’t give the Tanzanite Investor a tax waiver, where else can he go to mine Tanzanite? OK. Here is what I am trying to say:

We don’t need tax waivers for anything in the mining sector. Get good money out there and give us start-up entrepreneurs a break! We all can do with a little tax break!

The Minister said she wants to increase the rate of presumptive tax (that is to us little businesses by the way) from 2 percent to 4 percent for annual turnover which exceeds Shs. 4,000,000 but not exceeding Shs. 7,500,000 for record keeping businesses; and increase the current flat rate from Shs. 100,000 to 200,000 for non record keeping businesses. She then said these measures together are expected to increase Government revenue by shillings 31,504 million.

I’d say no….get 31 billion/- from elsewhere, say from big business or by nationalizing all the ill gotten wealth in this country. Leave us small entrepreneurs alone! And I am very serious about this…. Leave us alone!