DODOMA: MEMBERS of Parliament yesterday endorsed the Finance Bill, 2024 to allow the government move on with its 2024/2025 budget after it is assented to by President Samia Suluhu Hassan.
The MPs passed amendments to the bill which contains key changes to help the government implement its revenue and expenditure plans for the next financial year.
The government has increased spending to 49.35tri/- in the next financial year up from 44.39tri/- in the current year, equivalent to 11.2 per cent increase to continue financing strategic energy, transport and water infrastructure, debt service as well as preparations for the forthcoming local government elections later this year and general elections next year.
The budget is also projected to finance preparations for hosting the Africa Cup of Nations (AFCON) tournament in 2027 as Tanzania is one of countries chosen to host the tournament.
The government has projected to collect 34.6tri/- as domestic revenue, accounting to 70.1 per cent of the budget, where 29.4tri/- will be tax revenue and 5.2tri/- non-tax revenue.
Among key changes, the government will give the National Food Reserve Agency exclusive mandate to import, store and supply sugar for domestic consumption to cover sugar gap. The measure will bring to an end the period where seven domestic sugar producers enjoyed exclusive rights to import the commodity.
The government abandoned plans to extend fuel levy to the Compressed Natural Gas (CNG) following recommendations by Members of Parliament that it will be counterproductive to efforts to promote natural gas as alternative fuel for motor vehicles instead of the traditional petrol or diesel fuel.
The government had also proposed fuel levy extension to Compressed Natural Gas (CNG) used in motor vehicles of 382/- per kilogramme.
However, the Parliament Budget Committee and Members of Parliament faulted the plans and proposed the government to provide incentives to promote use of natural gas for vehicles.
The Parliament Budget Committee commended the government for abandoning the idea, advising to scrap tax on equipment used in conversion of motor vehicles to run on gas so as to reduce conversion costs which range between 2.0m/- and 3.0m/-.
The government will also broaden sources of funds to enable Contingency Fund to finance urgent repairs of road infrastructure damaged by climate change effects.
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The Cashewnut Industry Act has been amended in the new bill to enable the government remit export levy of the crop to the Cashewnut Board for five years. This measure aims to stimulate the cashewnut subsector, providing funds for subsidies, research and enhancing the sector’s contribution to economic growth.
The bill has amendments to the Banking and Financial Institutions Act, Bank of Tanzania Act, and Microfinance Act to enable banks, financial institutions, and microfinance companies to offer interest-free loans.
The Railway Development Levy on imported goods has been increased from 1.5 per cent to 2.0 per cent, with the revenue to be split equally between the Railway Development Fund and the Road Fund.
Under the new bill the mandate of Tanzania Ports Authority to collect wharfage has been reinstated. Before that it was being collected by Tanzania Revenue Authority through the customs declaration system (TANCIS).
Several tax administration measures will be implemented in the next financial year including Value Added Tax (VAT) exemption on importation of Video Assistant Referee equipment and accessories to ensure Tanzania gets necessary sports equipment in preparations for the Africa Cup of Nations (AFCON) tournament in 2027 it co-hosts with Kenya and Uganda.