“Peasants in Tanzania pay taxes at the rate of over 70 per cent of the gross prices of their agricultural produce ... yet corporate firms pay only 30 per cent of profits,” charged Dr Diodorus Kamala (Nkenge-CCM) while debating the 2016/17 national budget.
The legislators, mostly from the cotton and coffee growing regions, decried the heavy taxes on the cash crops, warning against the likely collapse of the cash crops on which the country relies for the foreign currencies.
Dr Kamala and Peter Serukamba (Kigoma North-CCM) raised concern over the 26 different taxes that coffee producers pay, belittling as non-beneficial the 250 US dollar (over 500,000/-) cherry processing licence that the government has abolished.
Presenting the national budget here last Wednesday, Finance and Planning Minister, Dr Philip Mpango, proposed the scrapping of fees and levies crippling the agricultural sector.
He further proposed the removal of 450,000/- Uhuru Torch contribution and 250,000/- fee that district councils collect from cotton buyers; 800,000/- fire and rescue levy in tea as well as the cherry licence in coffee.
“The cherry licence will benefit coffee processors, not producers,” Dr Kamala charged, attributing the rampant smuggling of Tanzanian coffee to friendly Ugandan tax regime. Mr Serukamba said President John Magufuli had during his campaigns promised to abolish the 26 nuisance charges on coffee, describing the upholding of the levies as a mockery to the head of state.
Mr Dotto Biteko (Bukombe - CCM), decried the undue taxes on cotton, saying the country’s Number Three earner of foreign exchange was on the verge of collapse. He demanded compensation to thousands of cotton growers who were supplied with poor quality seeds and ineffective pesticides.
“We have people who were supplied with ineffective pesticides and poor quality seeds, which didn’t germinate ... they must be compensated for their wasted efforts and time,” demanded the MP. Mr Boneventura Kiswaga (Magu - CCM) warned against eminent collapse of the cotton sector due to undue taxes and levies.
“How can you talk about industrial economy amid collapsing cotton sector, which is the major supplier of raw materials,” queried the MP, however dismissing the taxing of MPs’ gratuity as non-discussable.
The lawmakers opposed the proposed value added tax on processed edible products as counterproductive to the agricultural sector, but demanded an introduction of 50/- more on fuel for the supply of water to rural people.
“The government can generate over 200bn/- from the 50/- on fuel levy ... this is a substantial amount if directed to the supply of safe and clean water to our people in rural areas,” argued Ms Martha Umbulla (Special Seats - CCM).
She, however, decried challenges related to Electronic Fiscal Devices (EFDs), advising the government to address them swiftly to avoid losing substantial tax revenues. Dr Haji Mponda (Malinyi-CCM) and Dr Jasmine Bunga (Special Seats -CCM) challenged the government to come up with new sources of revenues instead of relying on the exhausted traditional sources.
“We are here discussing and ultimately passing the budget whose implementation remains uncertain due to limited resources ... let’s explore new sources of revenues,” said Dr Mponda.
Dr Bunga cited the hot springs in the country as unexplored yet reliable sources of government revenues through tourism. “If our hot springs were well developed, they could attract thousands of tourists ... unfortunately, all I see around these resources are witchdoctors’ huts,” she charged.
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