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- Jul 9, 2014
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The old-time banker who’s seen corporate wallets swell and shrink, has thrown shade at Tanzania’s new 10% tax on retained corporate earnings, a levy that’s hitting profits previously left untouched for reinvestment, unlike dividends, which already faced the taxman’s grip.
Bankers like him, who’ve watched businesses soar and fall like leaves, know this could choke our economic growth faster than an allergic reaction. Mwigulu and his gang need to chill and give this policy a hard squint. While others slash corporate taxes to 15-25% they did nothing than dishing out free Chapati at a campaign rally, Yet our new tax is like charging for air at a beach bash. Here’s why it’s a vibe-killer for investment.
This 10% tax is a fresh jab at retained earnings, profits companies used to keep tax-free to fund new gear, hires, or R&D. Before, we only taxed dividends, leaving those earnings as free as wild. Now, layering this tax on top of the 30% corporate rate is like snatching a farmer’s seeds mid-planting.
We can’t ignore that SMEs, Tanzania’s economic backbone, will be hit hardest, with less cash to grow when bank loans cost an arm and a leg. Big firms might dodge it by funneling cash to shareholders as dividends, but that’s like emptying the tank before a journey, less fuel for factories or innovation.
Foreign investors, eyeing Tanzania for mining or telecoms, aren’t here for the Kilimanjaro or Serengeti Instagram posts. They want returns, and this tax makes Tanzania look like the overpriced bar next 15% tax deal or any other incentive-stacked menu. MNCs, with their crafty accountants, will bolt to better deals, maybe laundering profits through Mauritius faster than you can say “tax dodge.” Opinions have dragged high taxes—like a 40% withholding tax elsewhere for killing investment. Tanzania’s 10% isn’t as wild, but taxing previously exempt earnings is like adding salt to an already spicy stew.
East Africa’s already in a tax-cut cage match, and Tanzania’s swinging with a dull blade. Others are wooing investors with 15-25% rates like vendors hawking fresh products. This tax risks capital fleeing faster than a Bajaji at rush hour, leaving Tanzania’s economy quieter than a bar on Monday. It could also nudge firms to borrow more, and the old-timers like Kimei know that’s a shortcut to defaults. The IMF’s muttering about tax competition sparking a race to the bottom, but we want to stuck in flip-flops while others sprint.
Mwigulu’s and his gang need to ditch that tax, it’s seriously a bad playlist and investors are not going to dance it. Or, exempt earnings reinvested in farms, tech, or tourism call it a “Mama’s” deal.
Also syncing with the EAC could dodge this tax-cut brawl, or Tanzania could polish non-tax perks, fix Dar’s port, slash red tape, make business smoother than an SGR ride. The OECD’s 15% global minimum tax screams: stay competitive, or investors will ghost you like a that partner who’s lost interest in romantic affairs.
Matter of fact, I’m not an economist and I don’t have a PhD and I really really hate to throw this opinions to those with academics credential , but I can surely see that a 10% tax on previously untaxed retained earnings is a self-own while neighbors write investor-friendly scripts. Old-timer’s alternative views on that tax must not be overlooked, he has a point and wisdom, forged from watching ventures live and die. We better rewrite this plot before our economy flops like a sequel nobody asked for.
I’m done here. Who cares?🚮
Bankers like him, who’ve watched businesses soar and fall like leaves, know this could choke our economic growth faster than an allergic reaction. Mwigulu and his gang need to chill and give this policy a hard squint. While others slash corporate taxes to 15-25% they did nothing than dishing out free Chapati at a campaign rally, Yet our new tax is like charging for air at a beach bash. Here’s why it’s a vibe-killer for investment.
This 10% tax is a fresh jab at retained earnings, profits companies used to keep tax-free to fund new gear, hires, or R&D. Before, we only taxed dividends, leaving those earnings as free as wild. Now, layering this tax on top of the 30% corporate rate is like snatching a farmer’s seeds mid-planting.
We can’t ignore that SMEs, Tanzania’s economic backbone, will be hit hardest, with less cash to grow when bank loans cost an arm and a leg. Big firms might dodge it by funneling cash to shareholders as dividends, but that’s like emptying the tank before a journey, less fuel for factories or innovation.
Foreign investors, eyeing Tanzania for mining or telecoms, aren’t here for the Kilimanjaro or Serengeti Instagram posts. They want returns, and this tax makes Tanzania look like the overpriced bar next 15% tax deal or any other incentive-stacked menu. MNCs, with their crafty accountants, will bolt to better deals, maybe laundering profits through Mauritius faster than you can say “tax dodge.” Opinions have dragged high taxes—like a 40% withholding tax elsewhere for killing investment. Tanzania’s 10% isn’t as wild, but taxing previously exempt earnings is like adding salt to an already spicy stew.
East Africa’s already in a tax-cut cage match, and Tanzania’s swinging with a dull blade. Others are wooing investors with 15-25% rates like vendors hawking fresh products. This tax risks capital fleeing faster than a Bajaji at rush hour, leaving Tanzania’s economy quieter than a bar on Monday. It could also nudge firms to borrow more, and the old-timers like Kimei know that’s a shortcut to defaults. The IMF’s muttering about tax competition sparking a race to the bottom, but we want to stuck in flip-flops while others sprint.
Mwigulu’s and his gang need to ditch that tax, it’s seriously a bad playlist and investors are not going to dance it. Or, exempt earnings reinvested in farms, tech, or tourism call it a “Mama’s” deal.
Also syncing with the EAC could dodge this tax-cut brawl, or Tanzania could polish non-tax perks, fix Dar’s port, slash red tape, make business smoother than an SGR ride. The OECD’s 15% global minimum tax screams: stay competitive, or investors will ghost you like a that partner who’s lost interest in romantic affairs.
Matter of fact, I’m not an economist and I don’t have a PhD and I really really hate to throw this opinions to those with academics credential , but I can surely see that a 10% tax on previously untaxed retained earnings is a self-own while neighbors write investor-friendly scripts. Old-timer’s alternative views on that tax must not be overlooked, he has a point and wisdom, forged from watching ventures live and die. We better rewrite this plot before our economy flops like a sequel nobody asked for.
I’m done here. Who cares?🚮
