Employer group asks Tanzania for tax waivers

The Tanzania Employers Association is negotiating for tax waivers to cushion manufacturers and other businesses as the pandemic hampers economies. FIL PHOTO | NMG 

In Summary

• The national private sector umbrella organisation for employers (ATE) is negotiating with the government to reduce value added tax from 18 per cent to 16 per cent as a cushion for manufacturers and other businesses.
• The association is also pushing for a reduction in Pay As You Earn, Probation tax and bank interest rates.

By APOLINARI TAIRO
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The Tanzania Employers Association (ATE), the national private sector umbrella organisation for employers, is now asking the government for tax relief to help businesses stay afloat as the economic effects of the coronavirus pandemic start to bite.

ATE executive director, Aggrey Mlimuka, told The EastAfrican that the organisation is negotiating with the government to reduce value added tax from 18 per cent to 16 per cent as a cushion for manufacturers and other businesses.

“We are also pushing for a reduction in Withholding Tax from 33 per cent to 20 per cent and Corporate Tax from 20 per cent to five per cent,” he said.

The association is also pushing for a reduction in Pay As You Earn, Probation tax and bank interest rates.

ATE is also asking the government to exempt employers from the Skills and Development Levy (SDL) and the Workers’ Compensation Fund (WCF) levy for at three months to reduce the cost of doing business .

Employers in Tanzania have for a long time been asking for the elimination or reduction of the SDL, currently being charged at 4.5 per cent of the monthly payroll paid to skilled workers.

If the levy can’t be removed, ATE wants it reduced to two per cent. The levy is collected directly by the Tanzania Revenue Authority under the Vocational Education Training Act and Income Tax Act on payroll, which is paid by employers with more than four employees.

Firms in the country, under the Tanzania Private Sector Foundation, formed a crisis management committee to monitor the effects of the Covid-19 pandemic on key sectors such as tourism and the hospitality industry.