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Opposition offers ‘lesson’ on how to raise Sh 8.3 Trillion

Discussion in 'Habari na Hoja mchanganyiko' started by BAK, Jun 14, 2010.

  1. BAK

    BAK JF-Expert Member

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    Opposition offers ‘lesson' on Budget

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    Mr Hamad Rashid Mohammed presents the Opposition's alternative Budget in Parliament in Dodoma.

    By Tom Mosoba, Dodoma

    The Opposition in Parliament has offered what it says is a lesson to the government on how it could raise Sh8.3 trillion in domestic revenue without taxing the poor or resorting to expensive measures like borrowing from commercial banks.

    The Leader of the Official Opposition in Parliament, Mr Hamad Rashid Mohammed, has presented an alternative budget in which he listed sources that could earn an extra Sh2.37 trillion in the 2010/11 financial year. The government was not exploiting these sources, he said.

    Formalising the sale of cereals to East Africa Community (EAC) member countries alone could earn the government over Sh500 billion.

    Mr Mohamed said rice and maize exports could fetch Sh428.4 billion and Sh104.85 billion, respectively, if the country allowed unrestricted cereal exports to capitalise on its productive advantage over other EAC member countries.

    "We are currently not taking advantage of this opportunity, leaving Uganda to benefit by exporting 113,000 tonnes of cereals in the rest of the region. Kenya currently imports 270,000 tonnes of rice from Pakistan annually as Tanzania drags its feet," he said.

    The opposition leader's alternative list of revenue sources included the sale of a 25 per cent stake in mobile phone company Zain Tanzania for Sh250 billion. The government currently owns 40 per cent of the company.

    He said the Opposition could also raise Sh20 billion by floating a bond to the Tanzanian diaspora. The government has been accused of failing to fully utilise this opportunity, with remittances often failing to be captured.

    Mr Mohammed proposed an electronic procurement intervention, which, he said, could save another Sh250 billion currently being lost through corruption and highly inflated public purchases.

    The Opposition has also proposed a 50 per cent reduction in tax exemptions, saying this would make Sh350 billion available. Mr Mohammed said abolishing fuel tax exemptions extended to six mining firms could generate an additional Sh59 billion.

    The government provides for tax exemptions totalling Sh720 billion in the 2009/10 Budget, which the Opposition maintains are too costly for a country that heavily depends on donor support.

    The alternative Budget includes Sh200 billion in revenue from taxes on gold, tanzanite and other minerals. Echoing the government Budget, the Opposition says it would have earned Sh155 billion from gold royalties, whose rate has been raised from 3 to 4 per cent in the new mining law.

    Mr Mohammed said the opposition Budget targeted Sh54.5 billion in revenue from fishing licences, noting that this is the only area where the government had heeded advice.

    He added, however, that fishing royalties were not fully exploited, denying the government an opportunity to raise Sh130 billion.

    Other proposed revenue sources include the sale of NBC bank shares (Sh78 billion), hunting fees (Sh81 billion), tourism fees (Sh67.5 billion), sale of the executive presidential jet (Sh25 billion) and caps on seminar allowances (Sh6.1 billion).

    Also included in the alternative are Mtwara port (Sh 4 billion), deep-sea fishing fuel levy (Sh3 billion), land rent (Sh2.5 billion) and trade with the Comoros (Sh2 billion).

    Mr Mohamed said with the above proposals, it would be unnecessary to introduce taxes such as those levied on motorcycles, which, he added, provided employment for thousands of youths and eased transport problems in rural areas. The government has raised motorcycle registration fees by Sh20,000 in the Budget.

    The Opposition's alternative budget totals Sh11.3 trillion, of which Sh8.38 trillion is to come from domestic sources and Sh2.78 trillion from loans and foreign aid. It allocates Sh7.863 trillion to recurrent expenditure and Sh3.45 trillion to development projects.

    The government, on the other hand, plans to spend Sh11.6 trillion in 2010/11, according to the Budget presented last Thursday by Finance and Economic Affairs minister Mustafa Mkulo.

    Recurrent expenditure has been set at Sh7.78 trillion, while Sh3.81 trillion is to be set aside for development projects. Donors are expected to pump Sh2.45 trillion into the development budget.

    The government has come under heavy criticism for planning to spend Sh7.78 trillion against a projected Sh6 trillion in domestic revenue.

    Meanwhile, the opposition Civic United Front yesterday criticised the government for not making it clear how what role natural resources would play in the 2010/11 Budget.

    CUF chairman Ibrahim Lipumba told a news conference in Dar es Salaam that the government had not stated how much it expected to collect from gold mined in the country despite the prices of the precious metal having risen up to $1,200 (Sh1.68 million) an ounce on the international market. He said Budget was as "monotonous" as previous ones.

    He said the government could also have collected much more revenue by taxing timber products and curbing misappropriation of public funds and tax evasion.

    Prof Lipumba scoffed at suggestions that the government had come up with a budget for smallholder farmers, saying the slight increase in agricultural allocations would not pull peasants out of abject poverty.

    "We need to develop agricultural research centres if we are to revolutionise agriculture in this country," he said.

    He added that Tanzania had failed to implement the 2003 Maputo Declaration on agriculture that required African governments to increase public investment in agriculture to a minimum of 10 per cent of their national budgets.

    Additional reporting by Mkinga Mkinga
     
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