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Opposition: We can cut fuel prices by 40pc

Discussion in 'Jukwaa la Siasa' started by nngu007, Jun 2, 2011.

  1. nngu007

    nngu007 JF-Expert Member

    Jun 2, 2011
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    By In2EastAfrica - Wed Jun 01, 11:45 pm


    Finance and Economic Affairs shadow deputy minister Christina Mughwai briefs the media on the Opposition's alternative budget outlook in Dar es Salaam yesterday. PHOTO | MICHAEL JAMSON

    The opposition camp in Parliament has proposed a 40 per cent reduction in taxes for petroleum products to cushion Tanzanians against the rising cost of living.The deputy shadow minister for Finance and Economic Affairs, Ms Christina Mughwai, said the proposals would be contained in the alternative budget to be tabled next week in Parliament by the Opposition.

    Oil prices in the country have already hit a record high of Sh2,000 per litre due to increasing prices in the global market caused by the conflict in North Africa and the Middle East, apart from the falling Tanzania shilling. Currently a litre of petrol is sold for Sh2, 006 while that of diesel costs Sh2,060. Kerosene, a vital domestic energy source for most of the country's residents, is sold at between Sh1, 497 and Sh1, 590.

    Stakeholders have been urging the government to reduce taxes on petroleum products as a means of easing the economic hardship faicing wananchi. High oil prices have caused inflationary pressures, currently at 8.6 per cent. Specifically the petroleum products consumer consultative council affiliated to Ewura has been fighting against TIPER fees ($0.15 per metric tonne) and the two types of fees paid to TBS. These include application and testing fees ($0.38 per metric tonne) and certification fees ($1.52 per metric tonne).

    The Tanzania Private Sector Foundation (TPSF) has been saying that even the fees paid to Sumatra ($0.25 per metric tonne) and Ewura (Sh6.8 per litre) are unwarranted. It contends that this is because the agencies could very well find other sources of finance to pay for their operations.

    "We will propose a 40 per cent tax reduction in petroleum products when we table our 2011/2012 alternative budget. We want the 2011/2012 budget to address economic hardships," Ms Mughwai said.She told reporters at a briefing that apart from reducing the fuel taxes, the Opposition also proposed a reduction of other taxes.

    These include corporate tax for companies listed in the Dar es Salaam Stock Exchange (DSE) from the current 25 per cent to 20 per cent. According to Ms Mughwai, the reduction will help in attracting more companies to list their shares at the DSE, hence enhancing transparency.The Opposition will also suggest the abolition of presumptive tax. This is charged on small and medium enterprises (SMEs) for registration and currently stands at 4.5 per cent.

    "Under the current situation many SMEs shun registration because of the presumptive tax, something that denies the country a chance of collecting millions of shillings," she noted.According to Ms Mughwai, (Chadema Special Seats), the Opposition proposes a reduction of tax exemptions from the current 4.5 per cent to one per cent of the Growth Domestic Product (GDP). "There is also a need to form a new tax administration structure because currently there are companies which operate in the country, but do not pay tax simply because they have been registered in other countries," she said.

    The opposition camp also proposes that the tax payer base should be expanded so that local revenue collection should reach 20 per cent of the GDP from the current 16 per cent. It proposes six priorities for the 2011/12 Budget, including infrastructure, energy, and facilitation of rural growth. Other priorities are development of human resource capital, good governance and strengthening of public cooperation by introducing an office of public enterprises.

    In the infrastructure sector, the Opposition proposes the extension of ports, especially the Mtwara port, through public, private partnership. Improvement of the central railway line to meet international standards as well as investing enough money to revive Air Tanzania Corporation Limited (ATCL) are also among priorities proposed by the opposition. As for the energy sector, the Opposition said priority should be placed on generating 1800 MW from the southern power complex and Mtwara gas pipeline.

    Improving rural infrastructure, introduction of agro-processing in rural as well as farmers facilitation will be key for rural development, the opposition proposes.Concerning the development of human capital, the Opposition proposes that secondary school students should undergo vocation training so that they become self employed.
    By Frank Kimboy, The Citizen