TUCTA advises govt to impose tax on foreign and local firms in minings

25May 2022
Gerald Kitabu
DODOMA
The Guardian
TUCTA advises govt to impose tax on foreign and local firms in minings

THE Trade Union Congress of Tanzania (TUCTA) has advised the government to impose tax on local and foreign businessmen and multinational companies in the mining sector.

TUCTA President Tumain Nyamhokya.

If they pay tax accordingly, the government will mobilize revenues for financing public services. The trade union wants them to be well taxed to increase revenue mobilization.

TUCTA president Tumaini Nyamhokya made the remarks when opening a policy conference on revenue mobilisation in the Tanzania mining sector to finance quality public services and the care economy held in Dodoma recently. The conference was organised by Friedrich Ebert Stiftung (FES) and Tanzania's Public Services International (PSI) affiliates.

 “Some big businesses are not taxed. There is a need to impose a tax to raise revenues that could finance quality social services,” Nyamhokya said, stressing the importance of public tax justice education.

He said: “It’s essential for all members of communities, including workers, to understand it and know what is needed of them to implement tax justice.”

According to him, the recent public servant’s salary, including a minimum wage increase by 23.3 per cent announced recently, is a result of increased revenue collections but more could be done.

He said increasing public servants’ salaries and minimum wage increase will top up some expenditure--workers who were walking several kilometers for lack of transport fare can now hire Bodaboda to take them to their workplaces, food vendors will increase customers, and bank customers will top up on their loans using the salary increment.  

He said there is a need to increase efforts on revenue mobilisation so that all-important public services, including servants’ salaries, can easily be financed.

“Our president has increased salary; if people and firms pay tax, the government will mobilize more revenues and increase the salary even more,” he said.

Commenting on the mining sector, he said there had been a regulation that allows for a grace period or that gives incentives to investors where the investors work for a certain period before they start paying tax. We want this regulation to be reviewed or permanently removed as it affects our revenues negatively, and there is no proof that incentives contribute to attracting investors.

“Especially the mining sector to benefit from grace period or incentives, we would like to advise the government that these types of investors should start paying tax from the day business commences,” he said.

He said some businessmen are so tricky that they tend to change their business names; they get another grace period and incentives when they do so. In the process, a lot of income is lost while workers come rain come sun, their taxes are deducted monthly but they work in poor working conditions and less improved social services. This demoralizes the workers from working because they are taxed, and they need to heed other directives from the government, such as pay as you earn.

“The good thing we TUCTA talk with the government and it listens. We will continue advising the government on the importance of MNCs and big businessmen in paying tax,” he said.

He said some employers have firms in Tanzania and outside Tanzania. Still, when you investigate, you find that the overseas workers are paid heftily while the local ones are paid less, and at times, they face bad working conditions.

“We advise the government through labour commissioner to make follow up and ensure that such employers adhere to the laws and regulations of this country of improving working conditions,” he added.

 

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