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GOVERNMENT CLEARS AIR ON TAX EXEMPTION POLICY - FINANCIAL-24

THE government has issued tax exemptions worth 11.8trl/- in the period of 10 years, which is an average of 1.18tril/- per year.

Deputy Minister for Finance and Planning, Dr Ashatu Kijaji, told Parliament yesterday that the exemptions were offered to attract investors and boost growth of various companies in the country.

The Deputy Minister was responding to Ole MP (CUF), Mr Juma Omar who wanted to know the revenue that the government has not collected in the period of 10 years, basing on tax exemption policy.

According to Mr Juma, the International Monetary Fund (IMF) records show that Tanzania loses between 1.2bn and 2.2bn US dollars, which is equivalent to between 2.2trl/- and 4.4trl/- annually.

He said tax exemption was no longer a way of attracting investors and instead it is one of the forms of exploiting the country and thus the government must come up with a strategy to find alternative means.

Mr Omar added that some of the attractions to investors include predictable good financial policies and political stability in a given country.

“The most recommendable attractions for investors in any country are political stability, which include democracy and good governance as well as strong financial policies that give promising prediction of economic growth,” he said.

He added that using tax exemption as a means of attracting investors was not health for the nation. Responding to the argument, the Deputy Minister said the government is aware of the challenges of using tax exemptions as a way of attracting investors and that it has been keen on implementing it.

She noted that the government statistics on the money that was not collected because of tax exemptionsin the past 10 years were genuine and that MPs should rely on local records.

Dr Kijaji admitted that there had been complaints from the public on tax exemptions and that the government has been always working on the matter to make required improvement.

According to Dr Kijaji, the government grants tax exemption after assessing the situation and studying the impact of a given investment in the area and for the entire nation.

“We grant tax exemption basing on the law and investment policy, a certain company or an investor is granted tax exemption after assessing the impact of his/ her investment to the country,” she added.

Meanwhile, the National Assembly yesterday postponed the reading of the Financial Bill, 2017 to avail the Budget Committee with ample time to review the Bill’s massive amendments.

Adjourning the evening session, Parliamentary Chairman Musa Azan Zungu said many alterations had been received, compelling the reprinting of the Bill.

DailyNews

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