Tanzania has come under rare praise from the International
Monetary Fund for what the global lender terms “prudent legal reforms”
in its mining sector, land and microfinance.
These
changes have seen mining’s contribution to GDP rise to five per cent,
from 4.8 per cent the previous year, while gold and US dollar reserve
grew above the country’s bench mark—adequate to cover over five months
of imports.
Annual inflation trended below four per
cent for nearly 12 months, a stable exchange rate and an improved tax
collection to nearly 96 per cent of the target.
Now,
the IMF team, led by Enrique Gelbard, is urging the country to carry on
the targeted economic reforms but it must clear the business environment
of barrier that would otherwise the economic stability the country
experienced in the recent months.
The IMF team, which
visited Tanzania from February 20 to March 4, noted that cautious fiscal
and monetary policies that the country has made recently have borne
fruits of economic stability.
“The pace of economic
activity appears to have increased in recent months prompted by higher
public investment, a rebound in exports, and an increase in credit to
the private sector. As a result, real GDP growth is estimated to be
close to 6 percent, with activity buoyant in the construction and mining
sectors. Public debt has also been below 40 percent of GDP,” said Mr
Gelbard.
Despite the changes and achievements made, the Gelbard-led IMF
team suggested more tax reforms among other changes, saying they would
help sustain economic stability.
“We highly commend the authorities for their intention to improve governance in tax administration and the team emphasises the urgency to adhere to efficient means of tax collection and control, notably through the use of risk-based audits,” said Mr Gelbard.
“We highly commend the authorities for their intention to improve governance in tax administration and the team emphasises the urgency to adhere to efficient means of tax collection and control, notably through the use of risk-based audits,” said Mr Gelbard.
According to the IMF mission, the use
of risk-based audits will ensure better compliance and timely payment of
tax refunds and improve companies’ cash flows.
With
regard to government spending, the mission urged the authorities to
account and issue reports on implementation of planned measures on a
timely basis to avoid blocking relevant expenditure and decisions which
will be essential to improve businesses’ cash flows at that particular
time.
Tanzania approved the Blueprint for regulatory
reforms nearly two years ago for which the government set the official
kick-off in July 2019.
No comments :
Post a Comment