587bn/- ‘lost’ in tax waivers

[BAK]

Saturday May 30, 2009

587bn/- ‘lost’ in tax waivers

PIUS RUGONZIBWA, 30th May 2009 @ 00:28​

The government has given away over 587bn/- in tax exemptions in the past 10 months alone, it has been learnt. The Tanzania Revenue Authority (TRA) Board Chairperson, Dr Marcellina Chijoriga, told the Parliamentary Committee for Finance and Economy yesterday that the exemptions were made between July, 2008 to April, this year – some 18.38bn/- of the total amount was given away in Zanzibar.

Dr Chijoriga told the MPs that projects under the Tanzania Investment Centre (TIC), accounted for most of the exemptions or 83 per cent of the total – valued at 362.6bn/-. Other beneficiaries included state-owned organisations (5.97bn/-), government institutions (8.8bn/-), religious and other non-governmental organisations (34.7bn/-), while donor-funded projects got exemptions amounting to 21.1bn/-.

Internal revenue channels lost about 154.2bn/- in exemptions, mainly through duty-free shops, special exemptions and zero rated exemptions. “The exemptions on the Mainland were equal to 30 per cent of the total 1.45tr/- collected by the Customs Department for those ten months only,” she lamented.

In Zanzibar, she said the exemptions ate up to 18.38bn/- against actual collections of 28.1bn/- or 65 per cent of the total collections over the same period. Dr Chijoriga told a news briefing session that the Authority had reported the matter to the government since 2007. “We are still waiting for the government reply on this crucial issue,” she said.

Contacted for comment, the Minister of Finance and Economic Affairs, Mr Mustafa Mkulo, said he was aware of the problem and that he had ‘started’ working on it. He admitted to have received various concerns from key stakeholders, including TRA and that he had already ordered a strict review of the exemption's policy. Mr Mkulo said the trend was seriously affecting the nation, recalling last financial year where about 1.8trl/- was lost through tax exemptions.