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New Law to Boost Revenue Collection(AllAfrica Via Acquire Media NewsEdge) THE National Assembly approved Finance Bill for 2014, paving the way for the government to implement proposed fiscal measures for 2014/15 Financial Year. The move is intended to boost revenue collection and reduce massive tax exemptions. The Minister for Finance Ms Saada Mkuya Salum said in Parliament here that the government intends to lower the exemptions from higher levels estimated to reach 4.5 per cent from the 2011/12 GDP, to at least one per cent of the GDP this year. She however noted that exemptions that are beneficial to the economy would be spared, but would be analyzed to determine if they were effective as expected. Deputy Finance Minister Mr Mwigulu Nchemba appealed for support from Members of Parliament on measures to curb expensive tax exemptions, saying the government was working on their recommendations. Tanzania is seen to be too generous with exemptions that amounted 1.4tr/- in 2013, while it struggles to collect sufficient revenue to finance its budget. "We have had enough of it. And now we say enough is enough. We have to begin a new chapter," he said. Mr Nchemba noted that the measures to curb exemptions would not be retrospective but will apply from the date the new Finance Act becomes effective. "We will not open graves. We are opening a new chapter," he clarified. Another Deputy Finance Minister Mr Adam Malima said the government would spare exemptions that are beneficial to the economy including on ground breaking projects such as the planned upgrading of the Dar es Salaam - Isaka railway to standard gauge and construction of a new railway line to Rwanda. "Such projects require public private partnership (PPP) that calls us to give concessions," he said. According to Mr Malima, the government will abolish exemptions granted to telecommunication companies but will keep those granted to telecommunications operators for deemed capital goods which include telecommunication towers and their accessories, generators, tower fences, vehicles, base station accessories, surge and lightening protection system. The minister responsible for Finance has also been relieved of powers to grant exemptions for investor's rehabilitation and expansion projects. The government has abolished tax on cement, iron bars and roofing sheets. The items have been removed from the list of items which are considered as deemed capital and therefore eligible for tax exemptions under the Tanzania Investment Centre (TIC). Such a measure is aimed at encouraging local production of cement, iron bars and roofing sheets and protecting local companies from cheap imports of such items. Before amendments, it was only cement that was affected by the changes. The Minister said they included iron bars and roofing sheets after the recommendations from Members of Parliament and the Parliamentary Committee on the budget. In a move to increase collection of non-tax revenue, government agencies and other public institutions will now be required to remit to the consolidated fund their surplus income. This measure will lead to a repeal of a notice number 21 of 2014 that required public corporations and agencies to submit 10 per cent of their gross revenue to the Treasury. The bill also proposes to amend the Business Licencing Act and introduce annual business licence renewable upon expiration of the year or the three-year ones. The government has also removed excise duty on non-utility vehicles of eight years of age and below from the date of manufacturing. It imposed a 15 per cent excise duty on non-utility vehicles aged between eight and nine years and a 30 per cent duty on the vehicles aged more than ten years from the date of manufacturing. The measure is aimed at discouraging importation of aged vehicles. The Minister also said the government has imposed a 15 per cent final withholding final tax on Board of Directors fee. The corporate tax exemption to companies from income derived from gaming has been reinstated. It was proposed to be abolished before amendments. Imported used spare parts for vehicles and motorcycles will attract 25 per cent excise duty. The same applies to imports of used domestic appliances such as television sets. Copyright Tanzania Daily News. Distributed by AllAfrica Global Media (allAfrica.com). |