Summary
·
The cost
of cement and fuel were among issues that took centre stage when Parliament
debated the Sh44.4 trillion Budget, which was presented on June 15
Dar es Salaam. You will pay Sh1,000 more for a 50-kilogramme bag of cement starting this Saturday, while a litre of diesel and petrol will cost you Sh100 more.
This is after the government
defended all its proposals in the 2023/24 Budget, which Parliament passed
yesterday after several days of debate.
The cost of cement and fuel were
among issues that took centre stage when Parliament debated the Sh44.4 trillion
Budget, which was presented on June 15.
Parliament’s endorsement of the
Budget means that unless the Finance Bill is amended, the provisions will
become part of the Finance Act, 2023 and thus be legally binding with effect
from July 1, 2023.
Presenting the Budget earlier this
month, Finance and Planning minister Mwigulu Nchemba proposed the introduction
of an excise duty of Sh20 on every kilogramme of imported and locally
manufactured cement.
As part of efforts to speed up the
implementation of strategic projects, Dr Nchemba also proposed the amendment of
the Roads and Fuel Toll Act, CAP 220 with a view to increasing the Road and
Fuel Tolls by Sh100 per litre of petrol and diesel.
But soma MPs argued when debating
the Budget that the move would be counterproductive.
Mr Mrisho Gambo (Arusha Urban-CCM)
was among those who opposed the decision to charge an additional Sh100 on every
litre of petrol and diesel.
He said 22 taxes, levies and fees
were already being levied on fuel.
“When Sh100 is added, it is the
final consumer who will bear the burden. What the operators of commuter and
upcountry buses will do is just to transfer the additional costs to
passengers,” cautioned Mr Gambo.
“Let us be creative in seeking new
sources of revenue instead of focusing on the areas that directly hurt ordinary
citizens.”
On cement, Mr Gambo said the
additional duty on would push up construction costs.
“The government needs to go back to
the drawing,” he said.
Mr Venant Protas (Igalula-CCM) aired
similar sentiments.
“The additional cost on cement is of
no help to our citizens, most of whom are low-income earners.
“The government should look at other
ways of increasing revenue. In fact, essential items like food and cement
should enjoy tax relief, Mr Protas said.”
But responding to the concerns in
Parliament yesterday, Dr Nchemba said in the course of bringing about
development, it was inevitable that some people would have to bear the burden.
He said the government’s intention
was to build a prosperous Tanzania.
On the issue of additional cost on
cement, Dr Nchemba wondered where the government would get the money required
to take Tanzanians to tertiary colleges.
The government has abolished tuition
fees for Form Four leavers selected to join vocational training colleges.
The institutions include the Dar es
Salaam Institute of Technology (DIT), Mbeya University of Science and
Technology (MUST) and Arusha Technical College (ATC), which offer national priority
courses.
This initiative aims to increase the
number of experts required for the Fourth Industrial Revolution.
“We want to serve our citizens
better and that is why we deem it logical to take Sh20 from those who are
better off so that we can enhance free education in tertiary colleges,” said Dr
Nchemba.
“We must help each other. Of course
it might increase your costs, but there is no any other option. We need to take
good care of the children of Tanzania.”
On the additional Sh100 on fuel, Dr
Nchemba asked Tanzanians not to be worried and that the government would always
be there for them.
“There was a time when prices
soared, not because of the additional Sh100, but due to external factors. The
government stepped in by providing subsidies. Why should you worry today? What
is wrong with charging an extra Sh100 on every litre of fuel and channel the
money into strategic projects at a time when fuel prices in the global market
are low?”
Other items whose prices could
potentially rise starting Saturday include beer and tobacco products, as well
as cigars, cheroots, cigarillos and cigarettes.
The government had proposed an
excise duty rate of 20 percent on beer and tobacco products.
The government also had proposed the
introduction of excise duty at the rate of 30 percent on other cigars,
cheroots, cigarillos and cigarettes.
Responding to MPs who were
complaining over high tax rates, Dr Nchemba urged them to convince their voters
to be compliant when it came to tax.
This, he explained, will widen the
tax base and eventually put the government in a position to cut tax rates.
Today, he said, tax rates were high
due to the fact that taxpayers were few.
Available data show that in the
2021/22 financial year, for-instance, there were 4.5 million registered
taxpayers and out of which only 1.6 million had business Taxpayer
Identification Number (Tin).
“We need money for development
projects and social services. But it is a few taxpayers who bear the burden,”
said Dr Nchemba.
However, he said, if everyone would
use Electronic Fiscal Devices (EFDs), issue receipts and a customer demand for
receipts, it would be the beginning of the journey for tax cut.
“Today every trader sees the tax
rates as high. But this vicious circle will be cut if everyone pays tax,” said
Dr Nchemba.
He said the government was going to
implement in a full swing, the blueprint for regulatory reforms meant to create
an enabling business environment
“We consider the private sector as
the government’s partner and not an enemy. With this approach, we believe it
will stimulate investment and broaden the tax base,” said the minister.
On the complaint about duty
remission on imported wheat from 35 percent to 10 percent on the grounds that
it will encourage imports than local production, Dr Nchemba said that was not
the way it was viewed by MPs.
“This duty remission will be applied
to importers who import to fill the deficit gap. It will be applied to the ones
who buy wheat in the country but need more than what is available,” he
clarified.
Official data have it that demand
for wheat in the country is one million metric tons.
However, the local production
accounts for only 20 percent of the figure.
Like the government has been doing
in importing sugar to fill the gap between supply and demand in the country, Dr
Nchemba said at a time of deficit, producers or importers will always get
relief.
“We have not reduced the rate to
discourage local manufacturers and encourage imports. The one who does not buy
from local producers first, will not benefit from the duty remission”
The process, he said, will be
coordinated by the ministry of Agriculture.
On the other hand, debating the high
costs of cooking oil, MPs urged the government to go back to the drawing board
and come up with a solution to a problem.
Mr Stanslaus Nyongo (East
Maswa-CCM), said the government needed to look at the best way to handle the
matter so that Tanzanians could not feel the pinch of high prices.
“We all know that the cooking oil
crisis trickles down to ordinary citizens. We need to address this challenge,”
recommended Mr Nyongo.
Going by official data, demand for
cooking oil in the country is 680,000 tons against the production capacity of
300,000 tons.
This suggests that the deficit needs
to be imported.
In a swift rejoinder, Dr Nchemba
said the government had resolved to bring a relief to local producers so that
they could up production and avoid the local market being flooded by foreign
goods.
“The relief is included in the
schedule of amendments that will be tabled here later on,” said Dr Nchemba.
He also expressed the government’s
commitment to sealing all loopholes for smuggled cooking oil that were flooding
in the local market and thus causing unfair playing ground.
“We will have a meeting with
producers and security organs to ensure that this problem is contained,” said
Dr Nchemba.
In a nutshell, a total of 374 MPs
voted during the Budget approval process yesterday, according to National Assembly
Speaker Tulia Ackson, who read out the results.
"This is equal to 95 percent of
all votes cast by members of parliament," sai Dr Ackson. Out of the
number, 20 abstained while the remaining voted in favour of the revenue and
expenditure plan.
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