THERE are mounting concerns over unpredictable tax regime, which is allegedly increasing the cost of doing business in the country.
Some Members of Parliament have publicly voiced the concerns, citing a recent crackdown on big companies accused of tax evasion as a source of mistrust between the government and the business community.
The legislators disapprove the crackdown, blaming it on dysfunctional relationship between the government and businesses, subjecting all parties to substantial loss should the economy deteriorate. Tanzania Revenue Authority (TRA) stands accused, with its officials reportedly intimidating traders and using abusive language in the process of collecting tax.
But, the government, through the Minister of Finance and Planning, Dr Phillip Mpango, reaffirms its commitment to improve the business climate and nurture business confidence. It however cautions against anybody flawing the rules of the game.
President John Magufuli has assured that his administration has confidence in the private sector, which he describes as the engine of economic growth. Both President Magufuli and Dr Mpango acknowledge the critical role that the private sector plays in promoting the country’s economic growth.
The private sector indeed plays a substantial role in poverty reduction efforts. It offers millions of jobs to Tanzanians who work in service, manufacturing and agricultural companies.
Besides, the impressive contribution of the private sector to the economy, it’s equally undeniable fact that there are some traders who abuse the government trust on private sector for their selfish gains. It’s on record that some big companies have been evading taxes or unashamedly disregarding the principles and rules of doing businesses in the country.
Tanzania Bureau of Standards, National Environmental Management Council, Weight and Measures Agency as well as other regulatory agencies had been compelled to take stern legal measures against some dishonesty companies over violating of the laws.
Some companies had to suspend production due to littering of the environment and failure to comply with the agreed production quality and standards. The government, in 2009, established the Public-Private Partnership (PPP) frameworks as a vital instrument to attract investments.
The PPPs are effective mechanism to address the constraints of financing, managing and maintaining the public goods and services. True, the government is duty-bound to avail the private sector with conducive environment for flourishing businesses that operate efficiently and profitably.
But, too, the private sector has the responsibility to adhere to the rules and regulations governing their operations, especially the cardinal rule of paying all the relevant taxes to the government. Let the private sector collectively resolve to clear itself of some few dishonest elements that tarnish the good image of the country’s engine of economic growth.