MAJORITY people yesterday hailed the 2017/18 budget estimates, describing it as a stimulant of economic sectors and poverty alleviation efforts.
But, some interviewees cautioned against excessive borrowing, too many priorities and over dependency on donors for development funding. Members of Parliament (MPs) described the 31.7tri/- fiscal plan as people-centred and a real dedication to rescue Tanzanians out of poverty.
A cross-section of interviewed MPs shortly after Finance and Planning Minister Dr Philip Mpango tabled his second budget noted that the plan has confirmed the government’s determination to achieve its dream of industrial economy.
Nachuma Maftah (Mtwara Urban-CUF) commended the scrapping of Value Added Tax on transit goods, saying it was a right move to encourage domestic and international importers to use the country’s ports.
“This is very important in attracting businesses and boosting the country’s revenues,” he noted, affirming that the budget has incorporated views from the public and lawmakers as it contains crucial issues which the opposition had been demanding for decades.
Mr James Mbatia (Vunjo-NCCR) commended the government for the budget, but raised concern over increasing national debt. He particularly praised the government for scrapping the nuisance taxes, which had been fuelling hatred to the government.
An economist with the University of Dar es Salaam (UDSM), Prof Humphrey Moshi, said the public has always been obsessed with announced budget figures only to end up frustrated during implementation.
“Every time the budget is presented it gives us high hopes because we are too obsessed with figures but when it comes to execution, we hardly get what the numbers had reflected,” cautioned Prof Moshi, raising concern over the debts that the government carries forward to the next budget.
“As we speak now, the government owes construction companies and other individuals who offered services in the previous financial year... these are the facts that make the budget unrealistic,” he said.
The don proposed for widened tax base instead of relying on traditional sources for generations. He demanded the abolishment of VAT on tourism sector to create conducive environment to compete with other neighbouring countries like Kenya, Mauritius and Rwanda. In 2016/17 the government introduced VAT on tourism sector, a move that MPs denounced, saying it would give the neighbouring countries a competitive edge in the sector.
The former economic advisor to former President Jakaya Kikwete insisted on the need to reduce donor dependency. Prof Moshi advised the government to avoid borrowing from the local market due to high interest rate, dismissing the tax incentives to investors as researches have showed that the inducements had little impact in attracting investments.
Dr Wilhelm Ngasamiaku, also an economist with UDSM, said the government should affirmatively embrace studies conducted by experts on how to widen the tax base.
Though he did not state whether the studies were conducted by local experts, Dr Ngasa said there are about ten researches that the government could make good of. On industrialisation, the don argued, for the initiative to succeed, it’s imperative to establish the link between industries and agriculture.
“The value chain between industries and agriculture will take this country to the next level through agro processing,” said Dr Ngasa, decrying poor disbursement of development funds. Mr Deus Kibamba, a political analyst, was of the view that it was important for the government to choose few priority areas to focus on during budget implementation.
Dr Haji Semboja from UDSM hailed the government for improved tax collections. He however said the current sources of revenues and the country’s economy were incapable of generating funds to finance the tabled budget.
Speaking on national debt, Dr Semboja said borrowing was not a problem. “Borrowing is not a problem at all if the money borrowed goes to the sectors that trigger economic growth.”
Gema Akilimali, an activist and analyst, wanted the government to review its order that wants owners of residential houses and commercial buildings to pay property tax. According to her, property tax should be collected for commercial buildings only and not residential houses.
“Imagine how people toil to build houses just to shelter their families. It can take even five to ten years for a person to build a small house just to shelter his family. The government should spare these people from this tax,” she insisted.
Renowned economist, Professor Ibrahim Lipumba said the 2017/2018 budget was generally the best, adding that if fully implemented it will help to boost the country’s economy. However, he added that although Tanzania performed well in the ease of doing business compared to other countries in the EAC region in the recent World Bank report, the country needs to maximize its efforts in improving the business environment.
Another economist, Mr Hussein Kamote, said the budget quenched the expectations of majority poor Tanzanians for over 70 per cent.
“It has waived unnecessary levies that were being slapped to farmers and apart from other important things that aim at reducing the burden on poor Tanzanians, it is also time for motorists to breathe a sigh of relief as it has also waived the Motor Vehicle Licence fee,” he said.
Tanzania Private Sectors Foundation (TPSF) Executive Director Godfrey Simbeye gave kudos to the budget, saying if implemented, it will enable Tanzania to fly higher especially on production and competitiveness.
“This is the best budget because it has focused on relieving farmers and industrial owners of problems that have been facing them for a long time and even the excise duty that has been increased in drinks have controlled an imminent inflation rate which make the price of drinks stable,’’ he insisted.
In his comments, the Chief Executive Officer of the Consortium for Independent Education Providers in Sub-Saharan Africa, Benjamini Nkonya said the budget had helped school owners in the country to waive some nuisance taxes that were being criticized for a long time.
“We are also happy with the decision to waive the Motor Vehicle Licence fee that was being charged on school buses that are not doing business but providing services to pupils and students,’’ he said adding that the government should re-think of waiving other forms of taxes including the Skills Development Levy (SDL).