Tax exemption policy for review

Nanu · 2010-03-22T12:00:55+00:00

PIUS RUGONZIBWA, 21st March 2010 @ 16:00, Total Comments: 0, Hits: 340 THE government has decided to undertake a full review of the present tax exemption system in order to identify gaps that lead to massive loss of billion of taxpayers money every year. The Minister of Finance and Economic Affairs, Mr Mustafa Mkulo, said in Dar es Salaam yesterday a task force has been formed under Dr Marceline Chijoriga of the University of Dar es Salaam, who is also the Board Chairperson of the Tanzania Revenue Authority (TRA). He said the strategies are now being set on how to reduce them to decrease the burden to taxpayers. The government is concerned over the tax exemptions trend but we can not reverse it overnight. We must tackle it carefully considering the interests of various parties including that of investors, he said. One of the issues currently raised by workers is the burden of taxes payable from their monthly salaries. They urge revenue collectors to extend tax bases and revisit tax exemptions policy. Presenting TRA performance report last year, Dr Chijoriga told the Parliamentary Committee on Finance and Economy in Dar es Salaam that about 47 per cent of collectible tax revenue last year was waived to tax exemption in customs duty and internal taxes. In 2006/07 financial year alone, according to the Parliamentary Public Accounts Committee, the government lost about 850bn/- (equivalent to 30 per cent of the projected tax revenue) to tax exemptions. It is also estimated that the government lost over 300bn/- in last financial year to exemptions routinely granted to Non-Governmental Organizations (NGOs), religious and charitable organizations as well as other institutions. According to Treasury, the government aims for a tax system which is broad based with as few exemptions as possible. However, it says, exemptions are granted for a variety of reasons, such as to adhere to international norms for those with diplomatic status, to remove tax burden from donor funded projects, to respect government commitments in legal agreements and to implement certain policies such as support for NGOs or for certain economic sectors. Of late, there has also been exemption for Tanzania Investment Centre (TIC) certified investors for purchase of initial capital goods for their projects, exemptions for vehicles for public officials which are administered through the Treasury Voucher system. Other beneficiaries are companies listed under the Export Processing Zones (EPZs). "WILL THEY SUCCEED THIS TIME OR THEY WILL BE OVERSHADOWED THROUGH STRONG LOBBYING BY CHAMBER OF MINES AND OTHER INT'L ORGS? IS IT NOT ONLY GOING TO AFFECT THE NGOs AND THE MINING SECTOR LEFT UNTOUCHED?" FOR THOSE WHO HAVE CLUES PLEASE TELL US!!

Thread starter Nanu
Start date Mar 22, 2010

Nanu

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Tax exemption policy for review

Nanu

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