Budget fuels optimism on private sector growth

BANKERS and researchers have hailed government for commitment to promote private sector growth by making efforts to improve the business environment which have direct impact to banks the real estate and the banking sector.

Speaking at the breakfast debate organized by Ernst and Young (EY) in Dar es Salaam to brainstorm on the next financial year budget tabled before the parliament last Thursday, they cited scrapping Tanzania Revenue Authority (TRA) officers of powers to close businesses over tax disputes as an example of the commitment to support private sector development.

A Microfinance Officer from CRDB Bank, Isaac Shao, said the intention to scrap TRA officials of powers to close businesses over tax dispute would help not only an individual tax payer but also the whole chain of businesses associated.

“When an officer closes a retail shop over tax disputes, it means that the proprietors cannot pay back a bank loan if he or she has one and this affects the banks directly,” he said.

Mr Shao said rampant closure of businesses has knock on effects on so many areas like banks for loans which cannot be repaid and hence limiting the ability to provide more loans and curtail growth prospects.

Tabling the budget last week, the Minister for Finance and Planning, Dr Phillip Mpango proposed to extend the period for the tax amnesty for another six months up to December 2019 to taxpayers who had already applied for amnesty.

Dr Mpango said the government intends to improve the business environment by abolishing various fees and levies which were imposed by various regulatory authorities and institutions that will be effected through the Finance Bill 2019 and Government Notices.

The total number of fees and levies that will be abolished amounts to 54 for the first phase of the implementation.

Apart from the review of the fees and levies, the focus will also be on the elimination of the existing duplication of responsibilities among the ministries’ regulatory authorities and institutions, he said.

The minister also proposed six-month relief from tax payments for investors and businessmen after obtaining the Tax Identification Number (TIN) to enable the businesses to undertake the necessary preparations.

A business researcher from the University of Dar es Salaam, Dr Hilda Mwakatumbula said the new measure must go in hand with changing habit of TRA applying strict measures like hunting and closing down business and fining business proprietors which caused animosity.

The researcher said long queues and lack of fast ways of Paying taxes at TRA offices were another reason prompting tax avoidance in the country where she advised that there must be simplified ways of paying tax which saves time and money.

“TRA must embark on using modern technology like mobile and online forms of tax payment where a tax payer shall not have to waste time and money to visit Tax offices.”

Professor Honest Ngowi of Mzumbe University advised that the changes must go together with efforts to expand tax base by capacity building for the tax officer to tax international business and the digital economy.

Prof Ngowi said that there were the ever growing digital economy and transaction which if well tackled can expand the tax base through voluntary compliance which will solve the misery of landing below target collection in next fiscal year.

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