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Public debt up by 38 per cent

13th April 2012
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  Tax exemptions reach 1.016 trillion/-
Controller and Auditor General Ludovick Utouh

The Public Debt has jumped from 10.5 trillion/- in 2009/2010 to 14.4 trillion/- in 2010/2011, Controller and Auditor General Ludovick Utouh said yesterday.

Addressing reporters in Dodoma Utouh said the annual financial audit report of the Central Government shows the debt increased by 3.9 trillion/- during the period, which is equivalent to 38 per cent jump.

The jump was contributed by borrowing from banks, mainly the Bank of Tanzania (BoT).

The report shows a total of 461.59bn/- as government guarantees for loans amounting to 579.28bn/- saying on average, the amount guaranteed by the government as of June 31, 2011 accounted for 96.8 per cent of the total loans.

Utouh noted that the trend violated Section 13(1) (b) of the Government Loans, Grants and Guarantees Act of 1974 (revised 2004) which stipulates that the guaranteed amount should not exceed 70 per cent of the amount borrowed.

In the same report, Utouh raised alarm over the persistence of tax exemptions granted by the government to various institutions, saying the practice was one of the impediments to the efforts to increase government revenue.

According to the report the Tanzania Revenue Authority (TRA) statements reported tax exemptions of 1.016trn/- granted to various institutions.

The trend, according to the report, shows that exemptions increased by 335.65bn/- or 49 per cent, rising from 680.67bn/- reported during 2009/2010 financial year.

Tax revenue accounts for Tanzania Mainland closed with the actual collection of 5.550trn/- against approved estimates of 5.849trn/-, resulting in under collection of 292.89bn/-.

Had the exemptions of 1.016trn/- been collected, which is 18 per cent of the actual collections, the reported under collection of 292.89bn/- for Tanzania Mainland would have been offset, leaving a surplus of collection of 717.43bn/-.

“Generally, exemptions in respect of Tanzania Mainland have shown a rising trend in the year under review, compared to the previous years which in turn, posed a negative impact on the overall revenue performance,” the report reads in part.

The report states that during auditing several findings were noted including non compliance with International Public Sector Accounting Standards (IPSAS) - cash basis of accounting and non compliance with procurement laws and related regulations.

Utouh also stated that payments of more than 8.08bn/- were made without proper supporting documents and information to substantiate their authenticity.

It was also revealed in the report that goods valued at 31.03bn/- were procured and paid for but not delivered up to the point when the document was being prepared.

The problem of ghost workers still haunts the central government with the report showing that in the year under review salaries amounting to 142.72m/- were paid to non existing employees.

SOURCE: THE GUARDIAN
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