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MPs want tax resolution refined

3rd February 2012
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Finance minister Mkulo

The Parliament yesterday rejected a government resolution to amend the Excise Management and Tariff aimed at reducing tax charges on bottled and packed water produced in the country from 69/- to 12/- per litre.

 

The majority of the sitting legislators voted against the motion, tabled by Finance Minister Mustafa Mkulo, when Deputy Speaker Job Ndugai rose to take a vote of those who were in favour of the motion or those opposing it.     

 

Charles Tizeba MP for Buchosa (CCM) was the one who signaled the fall of the motion in the House when he requested Finance minister Mkulo to withdraw the motion, saying it had a number of shortfalls.

“Honourable Speaker as per Section 58 of the parliamentary standing orders this proposed resolution has to be withdrawn so that all the shortfalls can be amended and be re-tabled later on,” said the MP.

Minister Mkulo had sought the House to pass a Resolution; a blessing to minister’s order number 332, gazetted on 30 September 2011 for amendment of the Excise Management and Tariff that aimed at reducing tax charges on bottled and packed water produced in the country from 69/- to 12/- per litre.

In his earlier presentation Mkulo said the 69/- tax charges per litre imposed on the bottled and packed water through Finance Act No 5, 2011 were deemed to be high and had negative impact on the product and local industries as they were subjected to stiff and unfair competition from imported water.

“This tax has resulted in hiked prices of water produced by local industries compared to imported water thus making local industries uncompetitive. This trend will lead to a drop in the production of local industries resulting in drop in internal revenues and jobs,” noted Mkulo.

 

Mkulo said the government had projected to collect 15.54 billion/-, and had in the last six months collected 6.73 billion/-. Reducing the charges would cause a deficit of 7.719 billion/- which he said   

 

 

would be covered by reducing government recurrent expenditure mainly of allowances, workshops, purchase of vehicles, purchase of furniture, running of office, training within and outside the country, local and out of the country trips as well as repair of buildings      

 

The areas where money was to be deducted to cover the deficit was one of the major points of contention as legislators who debated the motion faulted the proposal.

 

MP Tizeba argued that it was unthinkable that locally produced wines were taxed at 420/- compared to 122/- for imported wines. Woods from Mozambique and Malawi were cheap compared to the local woods due to low taxation on the imports.   

 

Henry Shekifu Legislator for Lushoto urged the ministry to look for other sources of revenues by imposing taxes on unnecessary products such as imported water instead of cutting down the OC a decision he said would mean to paralyse the government.

Deputy Opposition spokesperson for Finance Christina Mughwai said the government should refrain from rejecting everything proposed by the opposition as in the proposal there are positive issues as revealed by minister Mkulo’s proposals.

Chairperson of the Parliamentary Standing Committee for Finance and Economic Affairs, Dr Abdallah Kigoda had supported the proposed amendment but said changes in policies related to finance, taxes and levies were necessary to ensure increased government revenues.

SOURCE: THE GUARDIAN
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