Posts tagged as: government

Why 2017/18 Fiscal Year Will Be Tough for TRA

Dar es Salaam — The Tanzania Revenue Authority (TRA) will be under intense pressure in the current financial year as it seeks to collect an amplified amount in tax revenue against a backdrop of missed targets in 2016/17.

The taxman collected a total of Sh14.4 trillion during the 2016/17 financial year.

Much as the money was 7.67 per cent higher than the Sh13.3 trillion which was garnered during the preceding year, it still fell short of the year’s collection target, TRA data show.

A total of Sh15.1 trillion was meant to be collected as tax revenue to partly finance the government’s Sh29.5 trillion-budget for the financial year 2016/17.

With funds from development partners becoming increasingly unpredictable, execution of some development projects suffered.

Presenting a report on the national economic survey for 2016 and the national development plan for the financial year 2017/17 in Parliament in June this year, the minister for Finance and Planning, Dr Phillip Mpango said while the government planned to spend Sh11.8 trillion on development projects in 2016/17, it managed to raise only Sh4.5 trillion as of April 2017 for that purpose. The poor performance, he said was attributed to delays in securing loans and grants due to prolonged negotiations with development partners and commercial institutions.

“Besides, interest rates rose during the period, forcing the government to defer borrowing. The rates of borrowing from international lenders rose to nine per cent from six per cent,” he said.

But against such a backdrop, TRA is now required to collect Sh17.1 trillion, which is Sh2 trillion more than what the taxman was meant to collect during the 2016/17 financial year and Sh2.7 trillion more than what it (TRA) actually achieved during the year. Similarly, development spending is also expected to increase slightly by 1.2 per cent from to Sh11.999 trillion.

This also comes against the backdrop of closure of a total of 7,277 businesses across the country between July 2016 and March 2017 even as the government says that TRA also registered a total of 224,738 businesses during the same period.

Attainable

But economists are of the view that the Sh17.1 trillion-target is practicable, saying the country’s business environment will gradually improve and thus create an enabling environment for the private sector to thrive.

“Had last year’s ways of doing things remained, I would not have been convinced that things would move, but after new measures were introduced in the 2017/18 budget, a lot of things have changed and will continue to change and the Sh17.1 trillion can be realised,” said Prof Humphrey Moshi of the University of Dar es Salaam in a telephone interview yesterday.

Prof Moshi’s arguments are based on a number of measures that the government has taken within the 2017/18 budget aimed at stimulating economic activities.

He is specifically happy with the government’s decision to scrap the annual motor vehicle licence fee and instead raising excise duty on petroleum products by Sh40.

“Before that, one could drive a vehicle with a fake registration sticker and avoid paying the fee, but now, there will be no avoiding the tax. You cannot drive a vehicle without refueling it. So, as you refuel it, you will be paying tax,” he said.

Besides, he said the government has also exempted VAT on importation of capital goods as way of reducing procurement and importation costs on machines and plants used in production. Similarly, it has zero-rate VAT on ancillary transport services associated with goods in transit as it seeks to attract more and more business to the Dar es Salaam Port.

“This was one of the reasons behind a drop a goods at the Dar es Salaam port. This is now bound to change,” he said.

The government, said Prof Moshi, is also determined to pay its various contractors and service providers to public schools, hospitals and security organs, among others.

“All these measures will stimulate economic activities. Besides, people have realised that President John Magufuli wants everyone to work hard and pay tax. You can see how people are complying with payment of Property Tax. I am convinced that the situation will be better this year,” he said.

According to the TRA director of taxpayer services, Mr Richard Kayombo, the tax body is currently undertaking various sensitisation programmes aimed at ensuring that businesses make use of EFDs effectively. Similarly, it hopes to collect more in Corporate Tax, with the deadline for last financial year collections ending on Saturday, July 15.

Public Debt Crosses Sh4 Trillion Mark As State Eyes More Loans

By Brian Ngugi

Kenya’s public debt crossed the Sh4 trillion mark at the end of March this year, reflecting the Jubilee government’s sharp appetite for loans.

This has raised fears of the country’s future ability to repay the mounting credit.

The latest Quarterly Economic and Budgetary Review report released Wednesday by the Treasury shows that total public debt has now risen to an equivalent of more than half (52.6 per cent) of the gross domestic product (GDP), on the back of massive increase in borrowing since the Jubilee administration took power four years ago.

The public debt comprises 51.9 per cent foreign and 48.1 per cent domestic loans.

“The gross public debt increased by Sh782.3 billion from Sh3.26 billion as at the end of March 2016 to Sh4.04 trillion, equivalent to 52.6 per cent of GDP by March 31, 2017,” says Treasury in the report tabled in Parliament.

“The overall increase is attributed to increased external debt due to exchange rate fluctuations, disbursements from external loans and more uptake of domestic debt during the period.” The rate of increase in the debt load, however, does not correspond with growth in revenue generation, indicating the widening gap and mounting pressure on government’s capacity to repay loans.

The ability to generate and grow tax revenue is a strong indicator of future ability to repay debt.

The Treasury report shows that the government’s cumulative revenue collection for the period July last year to March this year amounted to Sh984.6 billion against a target of Sh1.05 trillion.

“This represented an under-performance of Sh65.9 billion mainly due to shortfalls in income tax, (fees, charges and court fines) collection, Investment Income and Imports Declaration Fee (IDF),” says Treasury in its documents.

The total external debt stock including the international sovereign bond stood at Sh2.1 trillion at the period ending March 2017.

The debt stock comprised multilateral debt at 38.4 per cent, bilateral debt at 32.8 per cent, commercial banks debt at 28.3 per cent including international sovereign bond and suppliers’ credit debt at 0.5 per cent.

Corresponding to the rising debt load, foreign interest payments rose to Sh38.2 billion in the period compared to Sh26 billion in the same period of the 2015/16 financial year. On the other hand interest payments on domestic debt totaled Sh145.8 billion, which was higher than the Sh122.6 billion paid in the corresponding period of the previous financial year.

According to the budgetary review, Kenya’s loan repayment to China stood at Sh18 billion over the period representing over half of the total bilateral loans (Sh32.8 billion) highlighting the country’s growing appetite for Chinese loans.

Kenya this week committed to borrowing additional billions of shillings to finance the ongoing construction of the standard gauge railway (SGR) line indicating that the borrowings could soon take the debt load past 60 per cent of GDP level.

On Monday the government announced it is seeking an additional Sh370 billion ($3.59 billion) Chinese loan to extend the SGR from Naivasha to Kisumu, pushing the construction cost to Sh847 billion.

The country has in the past four years borrowed billions of shillings to finance power generation and road construction projects.

In addition to Sh327 billion spent on the first phase between Mombasa and Nairobi and Sh150 billion that the emerging Asian economy extended recently for the Nairobi-Naivasha section, the Chinese will have pumped a total of Sh847 billion in the venture.

This excludes interest on the loans that would push the overall cost beyond Sh1 trillion.

Mineral Output, Export Audit System Polished

By Bernard Lugongo

Dodoma — Over the years, Tanzania has improved its national capacity of physically auditing mineral production and exports, a new study has established.

Launched by the Energy and Minerals Parliamentary Committee on Monday, the report on ‘Taxation and the State of Africa Mining Vision implementation’, attributed the introduction of mineral audit agency, the Tanzania Minerals Audit Agency (TMAA), to the achievement.

“This has resulted in identification of unpaid taxes owed, while helping to build the capacity of mining companies to calculate tax revenues payable.”

Presenting the report to members of the committee, a representative of the Tax Justice Network-Africa (TINA), which conducted the study since 2011, said following the introduction of the Mining Policy of 2009, the country has also undertaken reforms in the tax systems to increase revenue from the mining sector. The move has seen the revenue increased from 2.4 per cent to about 4.4 per cent in 2001 to 2014, respectively.

However,it suggested that the country still needed to do more with respect to reviewing terms of double taxation agreements and Bilateral Investment Treaties (BIT’s) which Tanzania had signed with host countries of mining companies.

The Committee’s Chairman, Dotto Biteko, said the report had come at a right time, considering the ongoing exploration in various parts of the country, promising that the committee will use it as a reference tool.

Commenting on the report, Mlimba MP Susan Kiwanga said the document will be a crucial tool for her to effectively oversee the government on issues of mining taxation, considering that the country has continued to discover minerals in various areas.

Tanzania

Capital Development Authority ‘Outlived Its Purpose’

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323 Million/ – Given to Rombo Expected to Accelerate Economic Development

By Queen Isack

Rombo — Rombo District Council has been given some 323m/- for development projects in the 2016/17 financial year, so as to speed up development, it has been revealed here.

Rombo District Executive Director (DED), Ms Agnes John, said the money would be spent on important public projects like water provision, health centres, and ward offices. Speaking to villagers and council officials, Ms John stressed that village and ward officials should manage the projects effectively, a critical aspect being judicious expenditure of funds.

The official emphasized that the people, as the targeted beneficiaries, should keep close track of the projects, by, among other measures, regularly demanding income-andexpenditure records. She furthermore stressed that those who would not comply with government directives would be duly sanctioned.

The DED said the government had allocated 1bn/- for a water project in Ngareni village and 927m/- for construction of roads in Leto village.

The Rombo District Commissioner (DC), Ms Agnes Hokororo, said officials and the people should forge a close alliance in order to facilitate smooth execution of projects and other purposes for which public funds were allocated.

She stressed that the government was determined to elevate transparency and accountability to the peak, since it was only thus that poverty could at best be eradicated, and at worst, reduced.

The Ngoyoni Ward Executive Officer, Mr Isaya Tarimo, said the biggest challenge he faced was little awareness among the people on their importance to contribute willingly and seriously to development projects.

Tanzania

Capital Development Authority ‘Outlived Its Purpose’

Former Speaker of the National Assembly, Pius Msekwa has joined an array of patrons supporting dissolution of the… Read more »

Hints Dropped On Tapping Onto EA Regional Potential

Governmennt institutions have been called upon to work closely with the public and to educate them on services that they provide.

The remarks were made yesterday by the deputy permanent secretary ministry of Foreign Affairs and East Africa Co-operation, Ambassador Ramadhan Mwinyi, during an educational seminar on East African integration and opportunities, that started yesterday and ends today in Gombani, Pemba.

Ambassador Mwinyi said a segment of the public had voiced complaints over poor treatment by some public servants, cautioning that, if the trend wasn’t checked, Tanzania would lag behind in initiatives towards East African integration and the world in general.

He pointed out that there were vast opportunities in the integration project, but if the public was not adequately enlightened on modalities on aspects like the required documents and conditions, they would be left behind and reduced to mere spectators and complainers.

Traders expressed disappointments over the long processes of getting travelling documents, especially when they had a limited time before travelling outside the country.

They also complained about the difficulties they faced in registering their products under the bureau of standards and food and drug authorities because they did not meet their criteria.

Ambassador Mwinyi stressed the importance of government institutions to facilitate swifter public access to their services, but in compliance with laws and regulations, to enable traders seize opportunities in the East African common market.

An officer from the Immigration department, Mr Haji Kassim Haji, explained that procedures related to travel documents were not aimed at hampering anyone’s dealings but for the security of the nation.

Ambassador Mwinyi urged the traders to form groups, so that issues like getting travelling documents can be addressed jointly under the guarantee of the institutions under which they operated.

East Africa

Police Spokesperson Threatens to Resign Over Torture Statement

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Increased Budget Allocation to Push Govt Industrial Drive

By Bernard Lugongo

Dodoma — The Ministry of Industry, Trade and Investment has doubled development budget in the 2017/18 financial year, pushing the country’s industrialisation drive further.

The ministry, yesterday, asked Parliament to endorse a proposed budget of 122 billion/- for the next financial year, out of which 80bn/- will be set for development projects and the remaining 42bn/- for recurrent budget. In the current financial year, the development budget stands at 40bn/- and 41.8bn/- was for recurrent budget.

Comparatively, the recurrent budget for 2016/17 and that of 2017/18 has remained almost the same with a slight increase of 0.2bn/- , but there was a significant increase of 40bn/- in development funding.

When tabling the budget, the Minister for the docket, Mr Charles Mwijage, pointed out that the budget allocation indicates the government’s commitment to realise industrialisation vision come 2025.

Some of the development projects to be undertaken during the coming year as endeavours to build an industrial-economy base, establishment of special economic zones, developing the industrial area in Kibaha (TAMCO), developing researches for the development of industries, and to increase capital in the National Entrepreneurship Development Fund (NEDF).

He said that 200m/- from the development budget will be spent for developing flagship projects, such as in coordinating and monitoring works for the Liganga and Mchuchuma coal projects in Njombe Region.

Furthermore, about 2bn/-, equivalent to 2.8 per cent, of the development budget, will be used for financing building of a base of industrial economy, including Soda Ash project at Engaruka Valley and revival of General Tyres industry in Arusha.

Giving statistics of the industries established so far, Mr Mwijage said the country has 49,243 factories whereby 85 per cent of them are very small industries, small industries account for 14 per cent, middle industries (0.35 per cent) and big factories (0.5 percent).

“These figures give a picture that industrial development in Tanzania, like it is the case in other countries, comes as a result of putting more strength on small and very small industries as well as middle -level factories,” he argued.

Since the Fifth Phase Government took power, over 390 big industries worth 5tri/- were registered by last March and are expected to provide at least 38,862 job opportunities to Tanzanians.

These industries are at different stages of implementation, while some of them are at the final stages, ready for production. The Parliamentary Committee on Industries, Trade and Environment asked for timely disbursement of funds to the ministry so that it could undertake development projects within the planned timeframe.

Meanwhile, the Committee appealed to the government to lift the ban on coal importation into the country.

The Committee Chairperson, Mr Stanslaus Nyongo (Maswa East-CCM), told Parliament that the current local production of coal does not meet the required demand, especially that of cement manufacturers.

According to Mr Nyongo, as the government gears up to boost local production of coal by attracting major investments in the area, it should allow manufacturers to import the commodity. “Apart from low production of coal, manufacturers are facing a major challenge in transporting the commodity from Ruvuma to their plants.

The roads around the coal mine areas are in bad state and are impassable during rainy season. The nearby railway line can’t handle heavy load. Currently, coal amounts to 70 per cent of entire production cost of cement,” he said.

When contributing to the proposed budget, some MPs expressed anger over privatised industries whose owners have failed to develop them and as a result they collapsed.

The Mtama lawmaker, Mr Nape Nnauye (CCM), and Special Seats MP Mwanne Mchemba (CCM) unanimously proposed that the government should immediately repossess those collapsed industries from investors and give them to others.

Govt to Sell Exiled Tycoon’s Property

The Rwandan Revenue Authority has placed Kigali’s Union Trade Centre — a $20 million mall owned by exiled tycoon Tribert Rujugiro Ayabatwa — among properties to be auctioned for defaulting on their taxes.

Mr Rujugiro has taken the Rwandan government to the East African Court of Justice for the alleged illegal seizure of his properties.

RRA has published a list of properties up for auction and among them is the mall, which in 2013 was put under the Nyarugenge District Commission of Abandoned Properties.

The government said the property and many others had been put under the management of the Commission of Abandoned Properties for “efficient management,” which among other things includes paying taxes and utility bills.

UTC was put on a list of 14 properties that RRA said “are immovable assets of taxpayers whose properties have been attached and will be auctioned.”

The taxes owed are from 2015, when the building was already in the hands of the Commission of Abandoned Properties.

By press time, The EastAfrican had failed to ascertain how much UTC owes the government.

The EACJ is yet to decide the ongoing case in Arusha in which Mr Rujugiro, who fell out with the government in 2010, seeks to redeem a number of his properties that have been seized.

The case filed in 2013 was dismissed by the First Instance Chamber of the EACJ, but later the Appeal Court ordered the Trial Court to hear it afresh “citing that parties had not been afforded an opportunity to present relevant evidence in support of their respective cases.”

The case is still pending before the trial court and no hearing date has so far been announced.

Rwanda

Govt Expects Over 12000 Returnees By July 2018

At least12,000 Rwandans who still live in foreign countries as refugees could return home between July and June next… Read more »

Jinja Stuck With Shs 1.3bn Street Lights Bill

Jinja municipality is stuck with an accumulated power bill worth Shs 1.3 billion.

Rajab Kitto, the spokesman, Jinja municipality, says the bill has been accumulating over the last five years.

Local authorities are mandated to clear power bills using collections from local revenue. He says the failure to clear the power bill, prompted Umeme to disconnect street lights plunging the municipality into total darkness.

According to Kitto, they are unable to raise sufficient local revenue to clear the bill.

“Of course you are aware that Umeme cut off its power and demands us a lot of money, which is about 1.3 billion. Unless people pay, there is no way we are going to pay that money. We are not in position to pay”, he said.

Majid Batambuze, the mayor Jinja municipality and chairperson Urban Authorities Association, says municipalities unable to sustain street lighting because of the heavy power bills. He wants government to direct power suppliers to incur the cost of streetlights across the country.

“These urban councils collect less revenue and yet they have a lot of other costs to meet. Street lighting is a very expensive venture. If the government can direct the power suppliers to incur the cost of the street lighting before being contracted, then the problem would be solved,” he said.

He however, says most urban council leaders are opting from solar powered streetlights, which don’t have monthly bills.

Uganda

Are Police Harbouring Criminal Syndicate Within the Force?

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Govt Expects Over 12000 Returnees By July 2018

Photo: IOM/UN

Rwandan returnees from Tanzania (file photo).

By Eugene Kwibuka

At least12,000 Rwandans who still live in foreign countries as refugees could return home between July and June next year as a result of implementation of the Cessation Clause, officials at the Ministry of Disaster Management and Refugee Affairs (MIDIMAR) have said.

The estimate was revealed, yesterday, by Minister Seraphine Mukantabana while appearing before the parliamentary Standing Committee on National Budget and Patrimony to present MIDIMAR’s Budget Estimates for Financial Year 2017/18.

The minister said December 31 being the deadline by which Rwandan refugees who fled their country before December 31, 1998, will no longer be considered as refugees, a massive homecoming by returnees should be expected during the next fiscal year that starts in July and end in June next year.

“Because December 31 is the very last date, they may consider it as serious and decide to come home. We have advised the Ministry of Finance and Economic Planning to set aside as much money as possible to be able to receive and reintegrate every Rwandan who will come home,” she told journalists shortly after meeting with the MPs.

Under the Cessation Clause, the UN refugee agency, UNHCR, has been working with governments across the world to implement a strategy of bringing to proper closure the situation of Rwandan refugees who fled the country before December 31, 1998.

The strategy for invoking the clause contains four components to ensure that Rwandans who fall under the category no longer claim to be refugees, including their voluntary repatriation, local integration in host countries, retention of refugee status for people still in need of international protection, and the invocation of the cessation clause, which would see them lose refugee status.

Inside the Cessation Clause

The UNHCR defines cessation clauses as built into the 1951 Refugee Convention and the 1969 Organisation of African Unity Refugee Convention, which provide for refugee status to end once fundamental and durable changes have taken place in the country of origin and the circumstances that led to flight no longer exist.

In the case of Rwanda, UNHCR has recommended that cessation come into effect from June 30, 2013, but the deadline has since been postponed several times until the latest one, which is due on December 31, 2017.

Both Rwandan and UNHCR officials in the country say the current social, political, and security conditions in the country are favourable enough for Rwandan refugees to return home.

“The situation in Rwanda is perfect. Refugees should come back home. There won’t be postponement of the Cessation Clause,” said UNHCR country representative Saber Azam at a news conference in December.

MIDIMAR officials estimate that at least 245,000 Rwandans could be still living as refugees across 20 countries in the world with a large number of them believed to be in DR Congo.

Ministry’s Budget Estimate

The majority of current Rwandan refugees left the country as a result of the 1994 Genocide against the Tutsi and some 3.4 million citizens have since been repatriated.

Unlike in the current fiscal year when MIDIMAR had planned that 20,000 former refugees would be repatriated and integrated into society even though about 4,800 have come home so far, it has planned for 12,000 returnees in the next financial year.

“We plan for these numbers but they could increase or decrease because returnees come back on a voluntary basis. All we pledge is that the Government will afford to reintegrate every Rwandan who will return,” Minister Mukantabana said.

MIDIMAR has asked Parliament to approve slightly over Rwf42 million in line with reintegrating the returnees during the next fiscal year and also asked the Ministry of Finance to plan for standby funds just in case of a higher influx of returnees.

In total, the disaster management ministry has asked the Government to allocate slightly over Rwf4.5 billion for its operations in the next fiscal year, which will also include the management of thousands of foreign refugees hosted in the country, as well as the reduction of risks for natural disasters and response when they strike unexpectedly.

Tullow Oil Reports Oil Discovery in Lokichar

Photo: Jared Nyataya/The Nation

Lokichar trading centre in Turkana.

By Jeremiah Kiplang’at And Sammy Lutta

More oil has been discovered in South Lokichar basin in Turkana, boosting efforts to spread exploration of the commodity.

Tullow Oil on Wednesday announced that it had found oil in the Emekuya-1 well in the basin after a similar discovery early in the year in two other wells drilled last year.

The firm said it had drilled through 75 vertical metres of rock that holds oil.

“Downhole pressure measurements and fluid samples suggest that the main oil reservoir is on the same static pressure gradient as the Etom-2 well which demonstrates that a major part of the Greater Etom structure is oil-filled,” said the company.

Tullow’s Country Manager Martin Mbogo said the discovery had boosted their efforts of exploring for more oil in the basin.

“This is a good result. The well was drilled close to the Etom-2 well which was a very successful well drilled in late 2016. Finding more oil here in the northern part of South Lokichar basin is good news and will add more oil to the overall resources that we have in the basin. We found oil at Etom-2 and at Erut (in early 2017) and we are now trying to find out if there’s more oil in between these two oil discoveries,” he said, adding that they would drill more wells in the area in order to ascertain the amount of oil that could be harvested from the basin.

“This is a very good start to this process. It shows us that the Greater Etom area (the part of the basin that goes beyond just the Etom discovery itself) does indeed have oil. We’ll have to drill more appraisal wells in the area to find out how much oil there is,” he added.

Exploration Director Angus McCoss said that they now look forward to the remainder of the Kenya exploration and “appraisal campaign in support of the ongoing work to prepare this important asset for full field development.”

The new discovery comes two months after Tullow signed a production agreement with the government which paved the way for the transportation of the first consignment of crude oil from Turkana fields to Mombasa for export.

Kenya

Former President Kibaki’s Bodyguard Sues For 2002 Accident

A bodyguard involved in a road accident with former President Mwai Kibaki has alleged in a court case he was mistreated… Read more »

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