MPs furious over govt failure to cut fuel taxes

Chairman of Parliament’s Budget Committee Andrew Chenge presents the team’s views on the Finance Bill yesterday. PHOTO | FIDELIS FELIX 

By Peter Nyanje  

In Summary

• Sources from within the committee told The Citizen yesterday that there was hot debate when the committee met with the Finance ministry as well as Tanzania Revenue Authority (TRA) officials when reviewing the bill.

Dodoma. MPs yesterday joined the Budget Committee in voicing disappointment at the government’s failure to live up to its promise to reduce fuel taxes and levies.

Lawmakers were surprised when Finance minister William Mgimwa, tabled the Finance Bill 2013 which showed that changes made on fuel taxation would increase prices of the sensitive commodities, instead of reducing them.

The Budget Committee chairman, Mr Andrew Chenge (Bariadi West-CCM), asked Parliament to shoot down Dr Mgimwa’s recommendations and adopt the committee’s proposals which directed the government how it could raise more money without increasing fuel taxes.

Sources from within the committee told The Citizen yesterday that there was hot debate when the committee met with the Finance ministry as well as Tanzania Revenue Authority (TRA) officials when reviewing the bill.

“We worked until midnight on Wednesday… we proposed to ministry and TRA officials, to no avail, how the government could get more money in other areas.

And this is because we know more taxes on fuel would hurt not only individuals, but also the economy,” said a source who preferred to remain anonymous because he was not the committee’s spokesperson.

Dr Mgimwa did not cut fuel taxes as he had promised when winding up the Budget debate on Monday. Instead, the changes he announced would increase fuel costs.

He said the government has agreed to slash a Sh2 per litre increase in excise duty on diesel but he maintained the proposals to increase taxes for petrol from Sh339 to Sh400.

What shocked some MPs is the move to increase kerosene duty from Sh430 to Sh475 per litre, a move which Dr Mgimwa said aimed at ensuring that the cost of the three types of fuel do not differ considerably.

He said this move would still check the problem of fuel adulteration.

Mr Chenge informed Parliament that if taken in total, the changes would result in the increase in prices of diesel, petrol and kerosene to enable the government collect Sh1.2 trillion.

He indicated in his speech that government could collect more money from introducing a three per cent royalty in deep sea fishing, as well as 10 per cent levy on lapsa (raw material used to make soap) and export levy for sunflower seeds and oil cakes.

Tanzania loses about $8.2 million each year, according to Mr Chenge, by not imposing export levy on some products mainly sunflower seeds and oil cakes.