FISCAL policies under the 5th phase government led by Dr John Pombe Magufuli and engagements reaffirmed by the Minister of Finance and Planning in his submission in the just ended budget and overwhelmed by 355 votes, where 260 said YES and 95 said NO for 2017/8 national budget execution, will tackle key barriers to growth in Tanzania only if each one of us correctly works towards a common goal.
Even though detractors will always be present in such circumstances for the reasons known to themselves, a state of affairs revealed itself during the national budget approve process, the government’s fiscal roadmap singled with, among other things, measures of abolition of VAT on hunting and other related permit will not only promote business but at macro level will address barriers to growth, which will promote get-up-and-go productivity, generate employment prospects and broaden wealth creating activities across various value chains and hence opportunities to achieve inclusive growth.
Dr Magufuli’s administration no doubt is strong-minded to convert Tanzania into a long term productive economy that will open opportunities for both public and more on the private sector to grow relatively than one that is consumption driven.
Indication of good things to come are beginning to sprout out, and this can be testified by the president’s activities in the coastal region, where the president has once more opened up a number of strategic projects that include global packaging with a capacity to employ 100 people, 60 men and 40 women on permanent basis.
The factory has benefited from a loan from TIB Development Bank (TIB–DFI), where 58 per cent of TIB loan and 42 per cent is owner’s equity i.e. private sector.
Beforehand through TIB, many manufacturing sectors and industries received loans, guarantees and equity that saw multiplying of the then manufacturing sector that the president has threatened to repossess should those who acquired them fail to restore them as per agreement.
Such ventures and many more to come will hold the infrastructure deficit and hence unlock productivity opportunities, improve business competitiveness for the private sector, local and international and create employment opportunities that Tanzania needs to accommodate graduates coming from universities and colleges.
On-going industrial activities in Kibaha industrial zone is evidence that the Magufuli administration is actively partnering with the private sector to achieve strategic manufacturing options for development projects that may include PPP projects.
Supportive and dedicated encouragements enclosed in the Finance Bill 2017 presented to the house for the second and third readings proposing amendments of about 15 legislations related to the country’s tax regime including introducing, modifying, reducing or repelling the rates of various taxes, duties, levies and fees as well as improving tax collection further gives manufacturing industries and taxpayers in general a reason to smile.
More important, there will be legal support in the execution of the budgeted 31.7tri- for 2017/8 fiscal year. Based on Dr Mpango’s suggested Bill, the amendment will now permit collective tax relief such that companies will be able to jointly undertake endeavours aimed at supporting the country achieve its anticipated development goals.
This will be particularly attractive to firms in clusters such as industrial estates, many of which are plagued by financial infrastructure. The role of infrastructure boosting around the county in creating inclusive growth will further benefit the current political will as the drivers of inflation continue to be addressed through the focus on power, rail and road infrastructure.
For our economy to remain on the right trajectory, for the above measures to be implemented there is need to deal with the badly behaved hidden liabilities, which are affecting the banking sector and determinations to revive the economy.
The CAGs proposal for best practices if implemented accordingly will introduce rigorous audit process that will ensure validity and mitigate against fraud and the impact of past corrupt practices on government resources.
Notwithstanding the current economic challenges facing the Tanzanian economy both internal and external, the outlook is positive due to the strong fundamentals of Tanzania and the on-going reforms, including the mind-set championed by the 5th phase government administration.
Determination reiterated in the last day of the three days state visit at the cost region by President Magufuli shows that the government is resolute to create an enabling environment and put in place supportive policies to return Tanzania on trajectory growth counting on greater alignment of monetary and fiscal policies.