Finance Minister Saada Mkuya
In Summary
Some Members of Parliament and economists have also
argued that the 2015/16 Government Budget projection is unrealistic and
offers no direction on what is required to fill the usual budget gaps.
Dar es Salaam. Stakeholders have criticised the
pre-Budget proposals that Finance Minister Saada Mkuya presented on
Wednesday, with some describing the estimates as “business as usual.”
She has also come in for criticism for allegedly not involving others in
making decisions.
Some Members of Parliament and economists have
also argued that the 2015/16 Government Budget projection is unrealistic
and offers no direction on what is required to fill the usual budget
gaps.
Addressing Members of Parliament in Dar es Salaam
on Wednesday, Ms Mkuya pegged Tanzania’s 2015/2016 Budget at Sh22.48
trillion as the government intensifies efforts to boost revenue
collection and reduce donor dependency. The amount, presented to MPs, is
Sh2.68 trillion more than the Sh19.8 trillion 2014/2015 budget that was
approved in June last year.
Ms Mkuya is out to collect at least Sh14.82
trillion of the Sh22.48 trillion locally. The Tanzania Revenue Authority
is expected to collect Sh13.35 trillion or Sh2.053 trillion more than
the Sh11.297 trillion the taxman garnered in the current financial year.
The government intends to collect Sh949.2 billion from non-tax revenue
and Sh521.9 from municipals while a total of Sh5.77 trillion will be
borrowed from foreign and domestic lenders. Some Sh1.89 trillion will be
raised from development partners.
But in a quick rejoinder, parliamentary Budget
Committee Chairman Festus Limbu said he was disappointed that the
estimates were not reached in a participatory way. “I learned this
figure (Sh22.48 trillion) here when the finance minister presented
them,” he said. “As chairman of this committee, I wonder what kind of
process the government used to prepare this year’s Budget.”
According to Mr Limbu, raising the estimates was
not a solution when implementation of the current Budget was still off
target. Twenty three ministries, departments and agencies have not
received any of the amount allocated for the development budget and
eight others received less than 10 per cent.
Mr Limbu added: “There is no budget discipline and
raising estimates is not the solution. It’s business as usual. I think
it should remain at the current level and, at the same time, the
government should reduce its lavish spending. That way, we could at
least relieve Tanzanians of increased taxes.”
Economics professors who spoke with The Citizen
yesterday said there was no way the country could collect Sh14.82
trillion internally without coming up with a new and holistic approach
to expand the tax base. Their views were based on the fact that TRA is
reportedly collecting funds below target during the current financial
year and this poses challenges in implementing some projects.
The taxman is on record as having collected
Sh4,934 billion against a target of Sh5,601 billion in the first half of
the financial year. Said University of Dar es Salaam’s Prof Humphrey
Moshi: “There has been a mismatch between the targets set in the
five-year development plan due to failure to allocate more funds to
development projects…if the trend in revenue collection is tolerated,
the pre-budget proposal can be good only in paperwork.”
Increased government borrowing should be directed
to productive sectors and not for recurrent expenditure, notably
consumption, he said. Moreover, debts to finance private sector dealers
have accumulated and have been carried over from the previous budget.
This clearly indicates that there is no rational spending of public
funds,” Prof Mushi added.
According to him, the 2015/16 budget reflects unrealistic figures that will not meet the people’s expectations and set targets.
Prof Haji Semboja of the same university echoed
those views, and added that budget guidelines and laws to guide budget
formulation and implementation were not followed. He said: “We must have
integrated regulatory frameworks to guide budget formulation and
implementation. This year’s budget projection depicts a chronic problem
of formulating and practising unrealistic budgets. The budget projection
is not realistic because most of the targets set in the previous year
have not been implemented and the 2015/16 budget carries over the same
cracks. The national budget is not mere paperwork. It is the
government’s commitment to bring about development.”
On the ceiling of Sh22.5 trillion set for recurrent and
development budgets, he said that given the size of the country and
population of about 50 million, the total budget projection should be at
least Sh70 trillion.
The “guesswork” in budget projection stemmed from
an inability to tax more of the ample natural resources rather than the
services and unproductive sector, he added, citing the case of sticking
to Pay As You Earn (PAYE) that reduces the employment generation rate.
Moreover, data showing a decreasing trend in donor dependency is not
realistic since the people must feel that the set development targets
have been met. “There is a need to grasp that Tanzania is not an island
which does not interact with other countries in the world,” said Prof
Semboja. “We still lack vital capacity to reduce donor dependency and we
are just cheating ourselves with unrealistic data.”
Since the major sources of revenue are tax and
non-tax sources, he added, there is a need to streamline non-tax revenue
sources and the executive agencies and big parastatals like Tanzania
Electric Company (Tanesco) should be managed well enough to raise more
revenue for the government’s coffers.
Reported by Ludger Kasumuni and Alawi Masare
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