In Summary
They said although some exemptions have been done away with, still big companies continue to enjoy tax holidays which have nothing to do with increasing tax base in terms of attracting more investors.
They said although some exemptions have been done away with, still big companies continue to enjoy tax holidays which have nothing to do with increasing tax base in terms of attracting more investors.
Speaking at the event organised by KPMG yesterday,
Prof Humphrey Moshi, a senior lecturer of economics at the University
of Dar es Salaam ,said fundamentally the revenue sources remain the same.
“The country could have the capacity to collect
more revenue in case dealers in the natural resource sector were
subjected to pay more taxes and have less exemptions,” said Prof Moshi.
Making comparative analysis for East African
countries, Prof Moshi said that Kenya had the biggest tax base and that
was why it was the least dependent on foreign aid.
“Kenya’s dependency on foreign aid is only five per cent,
while Tanzania’s is over 30 per cent. There is a need to reduce further
this dependency so that the country can have resilience against
external shocks triggered by the volatile global economy,” said the
learned economist.
Explaining on the exclusion of fiscal policies
governing the running of oil and gas sector, he wondered why there was a
hole in the 2013/14 government budget statement.
“I have not seen sound measures being taken to address preparations towards managing a gas economy,” he said.
He also criticised the projection of attaining
single digit inflation based on Consumer Price Index (CPI), which he
said it had nothing to do to address inflation at household level
budgets.
“It does not reflect the real picture at household
level. The good indicator is food inflation, but again food inflation
depends on the vagaries of weather. When there is good rain and good
harvest inflation comes down and vice versa,” he said.
For his part, KPMG Tax director David Gachewa
seconded the arguments saying fundamentally the revenue sources were
still the same, proof that the country still maintains a narrow tax
base.
“In the past, promises to widen tax base were
made, but this is yet to be translated into action. Kenya has a stronger
tax base than Tanzania. We have to emulate them,” Mr Gachewa said.
While Tanzania -- second largest economi in East Africa -- projects to collect over Sh18 trillion ($11.3 billion) in 2013/14 financial year, Kenya plans to collect $20 billion, Uganda $5.37 billion and Rwanda $2.02 billion, according to him.
While Tanzania -- second largest economi in East Africa -- projects to collect over Sh18 trillion ($11.3 billion) in 2013/14 financial year, Kenya plans to collect $20 billion, Uganda $5.37 billion and Rwanda $2.02 billion, according to him.
