I'll tax the rich and spare the poor - JPM

12Aug 2016
The Guardian Reporter
The Guardian
I'll tax the rich and spare the poor - JPM
  • Also orders Mwanza authorities to investigate suspected funds embezzlement in the sale of the assets of a flourishing cooperative union to a private company

PRESIDENT John Magufuli said yesterday that his government's ongoing crackdown on tax evasion will focus on the big companies and ordered authorities across the country to stop collecting levies from poor Tanzanians.

Big firms remain the main source of tax revenue for the government despite the presence of a huge informal sector in the country.

"We cant run a government that is in conflict with poor people every day, while most of the tax dodging is actually being done by the big companies," Magufuli told a well-attended public rally at Mwanza’s Furahisha grounds to mark the end his week-long tour of various regions.

The president has spearheaded a major campaign to tighten tax evasion loopholes all around since taking office in November last year, sacking the then Tanzania Revenue Authority (TRA) commissioner general Rished Bade in one of his first moves.

The tax drive, which also saw the dismissal of Tanzania Ports Authority (TPA) boss Awadh Massawe, has already resulted in a significant increase in the government's monthly revenue collections.

At yesterday’s rally, Magufuli asserted that the general thrust of taxation as seen by his government is that the heavier burden should fall on big businesses and high income earners – and not the peasants.

He also reiterated that his administration is determined to wage an unrelenting war against corruption, citing the establishment of a special graft court.

"Corrupt people have been put on notice. A new law has been passed - we will now arrest and swiftly prosecute all grand corruption suspects," he said.

Businesses cite endemic corruption as one of the key obstacles to investment in Tanzania, which boasts a wealth of agricultural land, wildlife, ports, mineral resources and gas reserves.

Magufuli directed authorities in Mwanza region to investigate allegations of impropriety in the sale of prime real estate assets of the Nyanza Co-operative Union (NCU).

The president ordered an official trace into what happened to the money gained from the assets sale to the privately-owned Simon Group Limited company some years ago.

According to the president, although the paperwork shows that the cooperative union’s assets were sold to the private firm for 1 billion/-, it appears that a mere 30 million/- was paid by the company.

“Even if the transaction was conducted 20 years ago, law enforcement agencies should take action," he said.

Magufuli's remarks came barely a month after the government suspended the entire NCU management and board of directors for gross mismanagement.

The president also told Mwanza regional authorities to abandon plans to block petty traders from conducting their business in the city’s central business district (CBD).

Petty traders in Mwanza were recently served with a notice by the regional administration to vacate the city centre within 15 days.

Said Magufuli: “These are just small business people who are doing their business in the city centre in order to get something to eat. It is very unfair to crack down on them while there are really big business people out there who are continuing to evade paying due tax.”

He however also warned the petty traders not to allow themselves to be used by the big businessmen for their own ends.

“I want you conduct your business freely, but you should also avoid the tendency of helping big businessmen in town to evade tax,” the president said in a message meant for the petty traders especially.

On the future of Mwanza, the president said the grand plan envisaged by his government is to transform the city into an international business hub linking various countries in the east African region.