President Jakaya Kikwete has said the government is in the process of reviewing the current Tax Exemptions Act in order to increase revenue collections and improve workers’ welfare.
The President said that reductions in tax exemptions which increased to 1.05trn/- in the 2010/2011 fiscal year would help to boost Tanzania Revenue Authority’s (TRA) annual collections currently standing at 5.2 trn/-.
He made the remarks yesterday when addressing workers and Tanzanians during celebrations to mark the World’s Workers’ Day held at Mkwakwani grounds in Tanga City.
This year’s theme was ‘Low Salary, High Tax and Price Hike: A Big Blow to Workers’.
According to reports by the Controller and Auditor Generals (CAG) and parliamentary committees tabled in the just ended Parliament, granted tax exemptions increased from 680.7bn/- in 2009/2010 to 1. 016trn/- in 2010/2011, which is equivalent to 18 percent of the country’s actual revenue collections.
Elaborating, he said that despite some discrepancies, TRA has always surpassed its collection targets every year. He said when he came to power, the authority was colleting 1.9trn/- but now it rakes in 5.2trn/- per annum.
He said the government’s plan is to spend 3.2trn/- out of 6.7trn/- from its internal sources for salaries.
Tax exemption would also result in the reduction of income tax for workers, he said, adding that some measures have already been taken whereby in 2007/2008 income tax was reduced to 15 percent from 18 percent and in 2011/2012 from 15 percent to the current 14 percent.
Kikwete said the government is very much concerned on the low salaries paid to both public servants and those in the private sector, promising that it would work on the matter in accordance to the actual revenue collected.
He however, applauded the lawmakers for the job well done during the last meeting whereas saying they did justice when discussing the CAG report for 2009/2010. He said the government is working on their recommendations.
President Kikwete said the report has revealed disbursement of public funds by ministries and district councils, adding that whoever feels that the CAG report is unfair should appeal to the High Court.
“We gave powers to the CAG because we wanted every Tanzanian to enjoy the national cake,” he noted.
CAG has been given powers to immediately take legal measures against officials proved to have embezzled public funds, he said, adding that he can recommend for the police and Prevention and Combating of Corruption Bureau (PCCB) to investigate the culprits even before the report is tabled in Parliament.
Kikwete said that his government has taken measures to improve the National Audit Office so as to ensure proper auditing of public fund expenditures. He said so far over 378 auditors have been employed and allocated to different districts countrywide.
On employment, The President said that the problem has been growing globally, adding that in Tanzania 12 percent of youths are not employed.
To tackle the problem, he said the government has decided to form employment promotion committees at the ministry and district levels, starting with six ministries.
He mentioned them as Agriculture, Food and Cooperatives, Home Affairs, Industry, Trade and Marketing, Finance Affairs, Works and the Prime Minister’s Office (Regional Administration and Local Government).
As for the districts, he said, the government has instigated pilot projects for employment promotions through establishment of special employment desks.
The President also called upon Tanzanians to turn up in big numbers in airing their views to the constitutional commission towards getting the country’s new fundamental law.
The timetable for people to air their views will be issued soon by the constitutional committee which officially started its work yesterday, he said.
Meanwhile, the Trade Union Congress of Tanzania (TUCTA) secretary general, Nicholous Mgaya said workers were expecting to get the new basic salary of 350,000/- starting the next financial year.
“It is our hope that the basic salary would be increased when the government tables its budget for the 2012/2013 financial year next month,” Mgaya said.
He called upon the government to improve the performance of pension funds to enable retired servants to get their payments on time.