Pay dividend or opt out

KATARE MBASHIRU

PRESIDENT John Magufuli yesterday directed the Treasury Registrar (TR) to act tough against public corporations, institutions and companies not paying dividend to the government as the law requires.

Equally, Dr Magufuli directed Tanzania Revenue Authority (TRA) to control transfer pricing, which many multinational companies use to evade tax.

Transfer pricing is used when subsidiaries of multinational groups are treated and measured as separately run entities. President Magufuli was speaking in Dar es Salaam on receipt of 736bn/- dividends from 43 public entities at the ceremony which was attended by Chief Executive Officers (CEOs) and board chairpersons of over 90 public entities.

Dr Magufuli took to task all CEOs and board chairpersons whose institutions didn’t pay dividends, challenging them to reassess themselves and see if they fit on their positions or quit their jobs.

“It is a shame when you have trusted people but it appears they have failed even to contribute to the country’s GDP,’’ he said, directing the TR to apply the law in dealing with institutions that failed to pay dividend.

The Head of state however expressed dismay over the 736bn/- that was presented yesterday as dividend, saying the amount was too low compared to over 49tri/- that the government has invested in public institutions.

The institutions that topped the list of large dividend payers include Tanzania Ports Authority (TPA), Tanzania Forest Services Authority (TFSA) and Tanzania Bureau of Standards.

According to Finance and Planning Minister Dr Philip Mpango, there were three other institutions that surpassed their targets in dividend payment.

They are Ngorongoro Conservation Area Authority (NCAA), which paid 22.35bn/-, surpassing its 13.24bn/- target. Others are Tanzania Communication Regulatory Authority (TCRA), which paid 59.86bn/- from its 30.69bn/- target and Tanzania National Park Authority (TANAPA) whose 30.77bn/- target was surpassed by paying 34.74bn/-.

According to the TR, Mr Athuman Mbuttuka dividend revenues have been on the increase year after year. During the 2013/2014, the government received 107.2bn/- and as of yesterday, the government had received 717.56bn/-, an increase of about 600 per cent in five years.

He said out of 67 public entities doing business in the country, 48 did not provide dividend due to poor performance as a result of administrative ineptitude.

“Some institutions are operating on unnecessarily high costs, management fees, high costs of loans that do not receive blessings from the Bank of Tanzania (BoT) while others have not been holding board meetings with shareholders,’’ he said.

Puma Energy Tanzania Limited Operations Manager Lameck Hiliyai said his company will continue working with the government by paying dividend as required.

The government, through the TR controls 50 per cent shares in Puma Energy. According to Mr Hiliyai, the company recorded a profit before tax of 31bn/- and paid 9bn/- as dividend to the government, yesterday.

Dr Magufuli called for collaboration with the private sector in a transparent manner.

According to him, some private companies that jointly own shares with the government have been providing false information to avoid paying sufficient dividends.

He directed TRA to make close follow ups to seal all loopholes that the companies use to deny the government its rightful share of revenues.