PAC decision on illegal cash outflows laudabLE

OPINION/EDITORIAL





By The citizen

IN SUMMARY

Tanzania, like most other countries in Africa, needs more foreign investors for its growth, but when scrupulous multinationals consider our need a licence for them to fleece our struggling economy, our relationship ceases to be amicable.

Finally, the Parliamentary Public Accounts Committee (PAC) has launched investigations into tax evasion and illegal money transfers by multinational companies doing businesses in Tanzania. PAC chair Zitto Kabwe reveals that there is massive tax evasion and illicit money transfers that are costing the country dearly.

The ongoing probes are in compliance with the declaration made in Arusha in September last year by the Sadc-Public Accounts Committees directing PACs in the region to initiate checks into the extent of tax dodging and illicit money transfers.

For example, foreign direct investments (FDIs) to Tanzania in 2011 reached $1.2 billion according to a Bank of Tanzania (BoT) report, but during the same period, illicit financial outflows from the country was $917 million (about Sh1.5 trillion).

The PAC notes that investigations by TRA on a certain mining firm which claimed it made losses in 2011, while it did in fact get a $327 million profit!

We aren’t certain whether PAC has enough skills and resources to chase the dodgy multinational firms, but the intention alone by our lawmakers, to embark on the mission deserves a pat on the back.

It is our hope government agencies like Bank of Tanzania (BoT), Financial Intelligence Unit, TRA and the PCCB will give a hand to the determined Parliamentary watchdog.

Tanzania, like most other countries in Africa, needs more foreign investors for its growth, but when scrupulous multinationals consider our need a licence for them to fleece our struggling economy, our relationship ceases to be amicable.

It is true there are numerous, honestly run foreign firms in Tanzania that create jobs for our youth and pay due taxes. We applaud these.

However, if a thorough and genuine audit were to be conducted in some, the public would be shocked by the fact that there are just too many well fronted foreign firms that are simply here to plunder. We expect that PAC’s effort currently underway will go a long way in putting these in check.