Tanzanian Finance Minister Saada Mkuya Salum
THE government and the private sector are still at odds over the implementation date for the Value Added Tax (VAT) and Tax Administration Bills, which are scheduled for tabling in the National Assembly in November.
Finance Minister Saada Mkuya Salum maintained in Dodoma yesterday that the proposed act will come into effect on January 1, 2015 as Tanzania Private Sector Foundation (TPSF) Executive Director Godfrey Simbeye, said that should the bills be approved by Parliament, they should become effective in the 2015/16 fiscal year.
In a statement availed to the 'Daily News' in Dar es Salaam, Mr Simbeye welcomed the postponement of the bills, noting that it will give ample time to VAT-registered businesses to adjust their pricing structures and minimise 'shocks' to final consumers.
Mr Simbeye, however, implored the private sector stakeholders to use the remaining time to consult extensively with the government ahead of the bill tabling in November.
"The decision has been well received by stakeholders especially the private sector as it is seen as a move towards creating a conducive business environment where consultation in the form of Public Private Dialogue (PPD) is one of the main pillars," the TPSF boss remarked, adding:
He said postponement shall give ample time to all stakeholders in all sectors to consult on the impact the two bills might have on revenue collection, efficient tax administration and economic growth, especially in the nascent sectors, including tourism, agriculture, service industry and fisheries that have huge potential of employing majority of the population.
He complained, however, that participation of private sector in the Bills that were to be tabled in the House during the just-ended session was "negligible."
"We were given a period of just one week in October last year to go through the drafts of the Bills and make recommendations.
To our surprise, between 80 and 90 per cent of the Bills that were to be moved in the parliament were different from those presented to us last year," he complained.
Mr Simbeye said the private sector is proposing a reduction in VAT rate, from the current 18 to 16 per cent, to reduce appetite for tax exemptions by investors in various sectors of the economy.
"TPSF also supports the move to reduce tax exemptions but its implementation must be carefully planned such that it does not suppress growth in sectors where accelerated growth is considered important in enhancing productivity, creating employment, and eradicating poverty.
"The foundation works to promote formalisation of small and medium enterprises in the country as this can also contribute to increase government revenue and social services, as well as contribute to higher foreign exchange reserves," he said in the statement.
Mr Simbeye pledged that the TPSF shall continue to encourage all foreign and local investors to comply with tax laws on timely manner so as to contribute effectively to the development of our country.
Reached for comments, renowned economics lecturer at the University of Dar es Salaam (UDSM), Dr Haji Semboja, described the move to table the Bills in absence of extensive public participation as "unreasonable."
"There was a need to conduct socio-economic regulatory impact assessment before moving the two Bills and eventually enforcing them. Viewpoints of the public are important in making such crucial decisions," the don said in a telephone interview.
According to Dr Semboja, it was also improper to present the bills in the National Assembly when the House already approved the budget estimates for the current financial year.
National Assembly Speaker Anne Makinda announced the decision to postpone the Bills last Friday, noting that preparations of the two Bills were not yet ready and would be tabled in the forthcoming meeting.
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