MPs’ 50/- fuel levy proposal to start water fund rejected

DAILY NEWS Reporter in Dodoma

MOTORISTS and the general public should have reason to smile after Finance and Planning Minister Philip Mpango rejected suggestions by MPs to introduce a levy of 50/- for every litre of diesel and petrol to establish the Rural Water Fund.

The former World Bank economist reasoned that the proposed levy would increase production costs and eventually push-up the inflation rate, which has been maintained at single digit.

“The government is aware of water challenges in the country and that is why it has been increasing allocation of funds to the sector each year. In the next financial year the government has allocated 690bn/- from 373bn/- in the current year.

“We have decided not to increase any level on fuel this year to maintain the trend. Falling of oil prices in the world market have enabled us to record an inflation rate of 5.2 per cent and thus it is wise to remain with the current levies charged on fuel,” the minister explained.

In their contributions to the budget estimates for 2016/2017, a number of MPs proposed the levy to set up a fund to finance implementation of water projects in the countryside.

The lawmakers had argued the fund was the only way the government would be able to smoothly implement water projects in rural areas. Special Seats MP Rose Tweve (CCM) was hopeful that a total of 300bn/- would be realised per annum if the levy is introduced.

“Out of the funds 270bn/- should be channelled to water projects in rural areas and the remaining 30bn/- to improve health facilities,” the MP suggested. The proposed levy was also contained in the report of the Parliamentary Budget Committee on the budget presented by its chairperson, Ms Hawa Ghasia (Mtwara Rural-CCM), in the National Assembly on June 10.

For his part, Nyamagana MP, Mr Stanslaus Mabula (CCM) went further and recommended tax exemptions on all equipment used in water projects. “In his budget speech, Dr Mpango proposed a tax waiver on water treatment chemicals.

But I am of the view that the exemption should be extended to all equipment used in water projects countrywide,” he suggested. Meanwhile, Dr Mpango maintained as well that the budget allocation to the National Audit Office of Tanzania (NAOT) will remain at 44bn/- in the next financial year. The amount is down from over 70bn/- allocated to the office in the current year.

“An assessment was conducted on the needs of the office and the allocated amount has been proved to be sufficient for smooth implementation of its functions. The government has slashed other charges (OCs) allocation to all public offices and the same applies to the NAOT,” the minister explained.

Dr Mpango explained further that the government will conduct a mid-year assessment in the coming financial year after which it will pump in more funds to the office if proven that there is a need for more funds.