New tax bad for business, say banks

 


Finance minister William Mgimwa

By Sturmius Mtweve, The Citizen Reporter  (email the author)


IN SUMMARY

According to the Tanzania Bankers Association (TBA), the 0.15 per cent charge was neither in the 2013/14 financial estimates nor was it a part of the Finance Bill, which Finance minister William Mgimwa tabled in Parliament in June.

Dar es Salaam. Banks are opposing a new excise duty on money transfers through banks.Apart from faulting the way it was introduced, they say the tax will be a cost to them and will be an additional burden to customers.

According to the Tanzania Bankers Association (TBA), the 0.15 per cent charge was neither in the 2013/14 financial estimates nor was it a part of the Finance Bill, which Finance minister William Mgimwa tabled in Parliament in June.

Instead, the tax on any transferred amount exceeding Sh30,000 was introduced as an amendment to the Finance Act. TBA feels that was a wrong approach in dealing with such a sensitive business matter.

“This charge was neither announced in the Budget Speech nor included in the proposed Finance Bill. Subsequently, it was introduced as an amendment to the Act,” the bankers said yesterday in a notice to express their dissatisfaction.

“TBA first became aware of the charge following a communication dated July 16, 2013 from the Tanzania Revenue Authority, advising TBA members of the new requirement,” the organisation added.

This is another opposition to some of the measures introduced by the government in this financial year to broaden the tax base and increase the use of local resources to finance its budget.

Mobile phone companies have opposed the Sh1,000 fee that was to be levied on each Sim card monthly. Their disapproval got overwhelming support from the public, leading to President Jakaya Kikwete’s intervention.

The TBA announcement has come a few days after the government gave in to the mobile operators’ request by taking the tax proposal back to Parliament later this month for amendment. Like the mobile firms, the bankers want the tax to be reviewed, saying it was likely to impact negatively on the economy.

TBA said it had sought audience with Dr Mgimwa on the matter.

Yesterday Dr Mgimwa acknowledged receiving the letter detailing their concerns. The minister said the government was ready to discuss the tax with them and address areas of their concerns.

“We are looking at the weight of their arguments on this matter and their grievances,” he said.

He noted that the government had been receiving similar concerns and various proposals on several issues