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Source: thecitizen
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Dar es Salaam. President John Magufuli's Cabinet which is yet to be constituted is likely to face a cash crisis, with signs that the government is running on a shoestring budget while things are not sitting pretty with the taxman.
The President's freeze on foreign travel, which he announced on Saturday, was the first and strongest pointer by the country's new chief executive that State coffers couldn't sustain such activities at the expense of other pressing needs as funding healthcare and education, which were his key campaign promises.
Dr Magufuli's predecessor, Mr Jakaya Kikwete, apparently left a huge budget deficit, with mounting debts-some unpaid for the last two years-coupled with underperformance by Tanzania Revenue Authority (TRA), has raised concern over the new government's ability to implement promises on key infrastructure projects and social sector funding.
Sources within government told The Citizen that concern was growing over TRA performance, with the tax agency reporting, albeit internally, its worst performance in recent years. Financial and public sector analysts are also puzzled over the failure by the agency to publish its performance results since the start of the new financial year - 2015/16.
Normally, revenue collections form part of what the Bank of Tanzania (BoT) publishes in its Monthly Economic Reviews (MERs) but for some yet to be given reason, this has not been the situation this time around.
Four months down the line, TRA has failed to show what they have collected during the four months or at least for the first quarter, leaving the nation to only speculate about the state of the national coffers. The BoT has so far published two MREs since the dawn of the current financial year but with nothing on what the taxman and other collectors of non-tax revenues have netted from July, 2015.
"During June 2015, domestic revenue amounted to Sh1.13 trillion, which was 83.3 per cent of the target. Domestic revenue collected by the central government was Sh1.075 trillion, which was 81.6 per cent of the target. Tax revenue amounted to Sh1.039 trillion, accounting for 92.1 per cent of total domestic revenue," reads a statement in the September MER.
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And, the August 2015 MER reads: "During June 2015, domestic revenue amounted to Sh1.128 trillion, which was 83.3 per cent of the target. Domestic revenue collected by the central government was Sh1.075 trillion, which was 81.6 per cent of the target. Tax revenue amounted to Sh1.039 trillion, accounting for 92.1 per cent of total domestic revenue."
No explanation was forthcoming from TRA in the last two days, with officials reluctant to share the data which is actually meant for public consumption.
Impeccable sources have told The Citizen that revenue collections were trending on a new low, raising fears that the new government-which is just one week in office-may be forced to slash capital spending so as to free cash for recurrent expenditure and miscellaneous demands. The silence on the part TRA is also creating speculations among the public whether collected funds could have been diverted to funds the ruling party's campaigns in the just ended General Election.
It was instructive that one of Dr Magufuli's early act on the first day of his presidency was to visit Treasury where he gave orders against tax exemptions and laxity in non-tax revenue collection. The following day the president summoned TRA Commissioner General Mr Rished Bade and BOT governor Prof Benno Ndulu during a meeting with permanent secretaries at the State House where he announced the clampdown on expensive foreign travel by technocrats.
Huge debts, including expensive foreign and domestic commercial loans running from the Kikwete administration would set back Dr Magufuli's pace as he looks to assemble his administration. The country's foreign and domestic debt is at its highest peak, reaching a staggering Sh41 trillion currently. The debt was Sh11 trillion in 2005. It jumped by a whopping Sh7 trillion during Mr Kikwete's last year in office.
Already, the new President has experienced first-hand how dwindling funding in the health sector had affected service delivery at the Muhimbili National Hospital, where life-saving equipment are unserviceable for lack of repairs.
The government could further run into trouble with university students who have threatened to strike should the Higher Education Students Loans Board fail to give loans for over 70,000 new entrants this academic year. This cost is besides what Dr Magufuli promised in free primary and secondary education for all students enrolling in January 2016.
Source: thecitizen
