Dividend rise secret revealed

DAILY NEWS Reporters

THE fifth phase government’s efforts to strengthen revenue collection and tightening loopholes for tax evasion is bearing fruits, with economic pundits attributing the 2017/2018 money paid in dividend by public entities as a major breakthrough towards the roadmap for development.

Although some public corporations and institutions were yet to remit their dividend to the treasury by Monday this week when President John Magufuli received 736bn/- from Finance and Planning Minister Dr Philip Mpango, what is certain is that dividend remittances are on an upward trend.

To Dr Magufuli, the 736bn/- was still not enough in a country that has invested over 49tri/- in over 90 public corporations, companies and institutions.

In the 2013/2014 financial year, the government received 107.2bn/- in dividend while in 2014/15, only 24 companies and institutions paid a total of 130bn/ as dividend to the government.

In the next financial year, 25 companies and institutions paid 249.3bn/-. The government’s efforts in strengthening revenue collection bore fruit after 38 companies remitted 677bn/-in the 2016/17 financial year, an improvement of 13 companies compared to the previous year.

In the 2017/2018 financial year, the amount rose to 736bn/- Dr Magufuli expressed optimism on Monday that he expected the figure to go up and that in the next financial year, he expects to see the number beginning from 1tril/-.

In separate interview with the ‘Daily News’, economists attributed the increment in dividend to President Magufuli’s serious administration that gives no room for loss of revenue.

University of Dar es Salaam senior lecturer Prof Delphin Rwegasira said that the increase in dividend was contributed by the fifth phase administration’s zeal in supervising the operations of public institutions.

He added that the statement by President John Magufuli that public institutions which failed to remit dividend should close up business, might be among the factors that contributed to an increase in dividend payments.

In June this year, Dr Magufuli directed the Treasury Registrar, Mr Athuman Mbuttuka, to ensure that all State-owned companies and institutions pay dividend to the government as the law requires.

He issued the directive when receiving a Sh1.5 billion cheque as dividend for the 2017/18 financial year from State-owned telecom- TTCL Corporation, which opened a new chapter by handing over dividend to the president publicly.

According to Prof Rwegasira, the directive that every institution should give 15 percent of its revenue to the central government was superb although its implementation was still down.

As per legislation, noncommercial State owned entities contributes 15 percent of its profit after paying all statutory taxes.

The entities that handed over cheques to the president include minority entities and commercial entities, non-commercial entities and parastatal organisations.

“Pushing for payment of dividend should be intensified because we witnessed this week that only 43 entities paid dividend, meaning, the amount is likely to shoot up once all institutions comply with the law,’’ said Prof Rwegasira.

His sentiments were echoed by another UDSM lecturer, Dr Ellinami Minja, who said: “definitely the institutions were making profits but failed to comply with the law in remitting dividend.”

Dr Minja further remarked that compliance with the directives would help the government to undertake its various development projects.