Civil society organisations (CSOs) say the government can adopt an alternative way in its budget 2012/13 allocations by using a formula rooted on utilisation of resources to ensure fair distribution of resources across the country.
The formula which has never been on use since its introduction eight years ago, takes into account four different factors, they say.
They include aspects that 70 percent of health grants should be distributed according to districts population since the poor tend to require health services more frequently than the wealth people.
A statement issued by the Policy Forum Budget Working Group yesterday, which represents over 100 civil society organisations, said that in order to enhance development in energy, agriculture, infrastructures, health, water and education sectors, the government should follow-up on its budget allocation commitment made under the General Budget Support (GBS) framework of allocating 58.7 percent (approximately 8,831.9bn/-) as a share of the total actual expenditure.
According to the CSOs the formula affirms that at least 10 percent of the grants should be distributed with respect to districts’ poverty count.
Besides, it also recognizes that higher operational costs in rural areas and the districts’ burden of diseases should observe other factors such as mileage and mortality rate.
The forum maintains that, the mentioned sectors which are key for the daily lives of the citizens should be dealt with seriousness so as to ease hardships facing many households.
Therefore, the government should apportion substantially resources towards the development components and reduce emphasis on wages and allowances.
On issues concerning honouring commitment to reduce tax exemptions, the CSOs state that the government should reduce the ratio of tax exemptions as a share of GDP to 1.2 percent by 2014 to enable the government to boost domestic revenue and gradually move towards lesser dependence on aid.
The government provides tax incentives to businesses to attract greater levels of Foreign Direct Investments, however it has been learnt that the incentives lead to huge revenue losses and may not necessarily be needed to attract or retain foreign investors, they say.
In 2009/10, Tanzania collected 4.45trn/- in taxes, which were 14.6 percent of the GDP.
Yet the International Monetary Fund (IMF) estimates that the country has the potential to collect taxes to the tune of 20.9 percent of the GDP.