It is D-Day for government budget today
MEMBERS of Parliament are scheduled to vote for the 2023/24 government budget today after winding up discussion on Friday last week.
The Minister for Finance, Mwigulu Nchemba is expected to wrap up the discussions before legislators vote to approve or disapprove the Finance Bill for 2023/24 financial year, according to a revised timetable of the 11th Parliamentary Meeting.
The meeting was revised to end on Wednesday 28th June instead of Friday 30th June to pave the way for the Members of Parliament to celebrate Eid el Haj on Thursday 29th June.
The National Muslim Council announced last week that Eid el Haj will be held on Thursday that will be a public holiday.
The government plans a 7.O per cent increase in overall government expenditure in the next fiscal year during which it will prioritise spending on the construction of the standard gauge railway, the national airline, electricity production and natural gas.
The overall spending will reach 44.39tri/- in 2023/24 financial year starting on the 1st of July, up from 41.5tri/- in the current year. Over two-thirds of the budget will be raised from domestic revenue estimated to reach 31.38tri/- or about 70.7 per cent.
Tanzania Revenue Authority is expected to collect 26.73tri/- tax revenues while non-tax revenue is expected to be 4.66tri/-.
Other sources will be grants and concessional loans from development partners estimated to reach about 5.47tri/- or 12.3 per cent of the total budget.
The government also expects to borrow 2.1tri/- from non-concessional sources to accelerate implementation of development projects.
Presenting the government budget proposal on 15th of June, the Finance Minister said the government plans a 20 per cent increase in excise duty on beers and tobacco products and a 10 per cent increase in duty rates for non-petroleum products.
However, domestically manufactured wines, spirits and confectionery products have been spared basing on the National Strategy to enhance the growth of industrial economy.
He said the current rates of non-petroleum products were lastly adjusted through the Financial Act, 2016 for domestically manufactured excisable goods, and the Finance Act, 2018 for imported excisable goods due to economic recession caused by among others, Covid – 19 pandemic which affected change in consumer behaviour.
The Minister said the government would introduce an excise duty rate of 30 per cent to cigarettes and other tobacco products including water tobacco, electronics, cigarettes vape products and shisha and increase excise duty rate on imported energy drinks from 589.05 to 600/- per litre.
It would also introduce excise duty at the rate of 20 per cent on imported and domestically manufactured gambling machines and increase gaming levy from 10,000/- to 30,000/- per slot machine in bar sites (clubs/places selling liquor).
Other measures would be to introduce excise duty at the rate of shilling 20 per kilogramme of imported and domestically manufactured cement, he said.
Mr Nchemba said the government intended to exempt all precious minerals, gems, and other minerals sold in local refineries or mineral markets established by the country’s mining commission from value-added tax.
It was also proposing to scrap excise duties on electric vehicles to promote use of electricity and natural gas in Tanzania to save foreign reserves which are used to import oil, he said.
The government intends to grant income tax exemption on revenue generated from investment returns (such as dividend from shares, treasury bonds and bills) of the National Health Insurance Fund so as to facilitate the provision of medical services to retired members and their partners who do not contribute to the fund after retirement.
The government plans VAT deferment on domestically manufactured capital goods in the list of capital goods that qualify for deferment, he said.
According to him the government will zero rate Value Added Tax (VAT) on textiles products manufactured using domestically produced cotton for period of one year.
It intends to introduce excise duty at the rate of shilling 20 per kilogramme of imported and domestically manufactured cement.
It proposed to raise Value Added Tax (VAT) registration threshold from 100m/- to 200m/- and gradually increasing to 500m/- to enhance administrative efficiency and promote voluntary tax compliance.
He said the government would also extend Value Added Tax (VAT) exemption on sale and lease of aircraft, aircraft engine or parts by a local operator of air transportation.
