Private sector wants piece of pie in easing national debt

10Jun 2016
Dickson Ng`hily
The Guardian
Private sector wants piece of pie in easing national debt

WITH the national debt stock soaring at US$20.94 billion, an increase of 6.34 percent from June last year, experts are concerned about the country’s long-term debt problems saying the government needs to invite the private sector onboard.

DR MPANGO

Speaking at the Ernest and Young (EY) Budget Breakfast, an event held in Dar es Salaam yesterday, the firm’s Managing Director Joseph Sheffu said: “If we are to do some calculations on the national debt compared with per capital income, then each Tanzanians will need to pay at least 786,200/-.”

Sheffu explained that he was aware with what triggered the increase which is off course due to by the government borrowing to finance development projects. But the involvement of the private sector would have helped lessen the debt’s burden.

It is said that among the projects financed by the money borrowed includes; construction of roads and bridges, strategic cities development project and construction of 400 kV transmission line from Iringa to Shinyanga.

Others are the financing of the Dar es Salaam Bus Rapid Transit (BRT) project, natural gas processing plants and pipeline, construction of Julius Nyerere International Airport terminal three as well as Upper Ruvu and Lower Ruvu water projects.

The EY boss is of the view that despite the fact that debt is sustainable in the medium and long term which is according to international standard, but some of projects would have been implemented by the private sector.

“There was no need for the government to borrow for some of the said projects, as the private sector would have done it...the government shouldn’t go back to the 80s whereby the government owned almost everything, they should create a conducive environment that the private sector can get inn,” he observed.

Adding: “In fact, there is no need for the government to engage in business...it should focus on its core functions and leave a room for private sector to flourish, this would grow the economy, and there would be more job creations.”

According to him, the 2016/17 budget seems to meet criterion in which people’s lives would be improved. “The budget is promising because it tries to reflect on its commitments in order to fulfil wishes and expectations of Tanzanians although we are not sure whether the money will be available.”

Delivering his speech on the estimate of the government revenue and expenditure for the fiscal year 2016/17, Minister for Finance and Planing Dr Philip Mpango told the national Assembly on Wednesday that the budget has two major objectives.

“The budget set to address challenges facing Tanzanians so as to bring new hope for better life to our people, especially to low income earners.

This objective will involve major reforms in Government’s undertakings particularly restoring discipline and accountability and to get rid of the culture of doing business as usual, as well as strengthening integrity and management of public expenditure and national resources,” he said.

Adding that: “It will also transform the economy into real middle income status through sustaining macroecomic stability and developing industries that will foster job creation particularly for the youths, and enhancing agricultural productivity in order to increase income for the majority who depend on this sector”

EY Director for Tax Lauzian Justinian is worried on the government move to amend tax legislations that would require tax exemption beneficiaries such as religious organisation and others to pay taxes and apply for refunds which will be reimbursed upon verification.

“There is a big challenge on this issue as for instance, investors in the Economic Processing Zone (EPZ), donors and regroups organisations need such incentives...but if they are to pay up front and thereafter claim for a refund, do we have in place an effective refund processes,” he enquired.

“Just reflect on VAT refund claims, how long it takes to have your refund...and again there isn’t a separate fund to cater for refund as all the money are channelled to treasury, this creates more bureaucracy,” he added.

Moreover, EY Tax Director seconded the government move to improving domestic revenue collection, reducing tax evasion, creating new sources of revenue, as well as insisting on the use of Electronic Fiscal Devices (EFDs).