Tanzania Daily News (Dar es Salaam)

Tanzania: One-Billion Dollar Answer Needed

opinion

CAPITAL flight is sure recipe for disappearance of wealth, which is economically disastrous. By one definition, capital flight, in economics, occurs when assets or money rapidly flows out of a country.

This impacts negatively on the economic well-being of nations, resulting in sharp drops in exchange rates, depreciation or forced devaluation. Assets lose their nominal value, leading to dramatic decreases in the purchasing power of the country's assets, making it increasingly expensive to import goods.

This, in addition to tax evasion and incentives offered to local and foreign investors, is what an inter-faith group has focused in a broader perspective through a report launched in Dar es Salaam on Tuesday. The 68-page report titled "The One Billion Dollar Question" is based on a study commissioned by the Inter-faith Standing Committee on Economic Justice and Integrity of Creation (ISCJIC), which commendably comprises Christian and Muslim leaders.

One major concern of the committee is that a vast amount of potential tax revenue that could be used to reduce poverty does not end up in the government coffers but rather leaves the country. The importance and seriousness attached to the study and eventual launching of the report shows that the clerics really did their homework. No research, no right to speak, isn't it? One couldn't easily dismiss the report as "just one of those opinions" thing.

Capital flight, tax evasion and tax waivers or exemption accorded to local and foreign investors is sure throwing away of money that could instead have been put to a lot of good use, including improving the welfare of the people. It is a trend that could be checked or reversed to put the country's economy on a really good footing before it is too late.

We just seem to waste a lot of money through uncontrolled or haphazard issuance of waivers or exemptions -- good money that could help ease inflation and enhance the purchasing power of both country and people. As stakeholders of their economy, Tanzanians are entitled to rapid responses to the "one-billion-dollar" question posed. Such responses should appropriately be in form of immediate positive action to remedy the situation.

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