10 November 2012

Tanzania: Tobacco Farmers Seek Refund On Taxes

Dodoma — GOVERNMENT is considering how to engage various stakeholders and discuss the best way to collect produce taxes on crops and ensure tax revenues of district do not dwindle.

This has come in the wake of reports that tobacco farmers across the country, who are supposed to be refunded 2 per cent of the 5 per cent they paid as crop cess during 2010/11,which has not yet been paid up.

Following the fall in prices for tobacco on the world market during that period it was decided that out of the crop cess already paid up, district councils and farmers would be paid 3 and 2 per cent respectively.

The Deputy Minister for Agriculture, Food Security and Cooperatives, Mr Adam Malima, said the failure to pay the farmers was due to the fact that the decision was made after the Finance Act of 2011 passed by the National Assembly.

"The Finance Act did not make amendments to the Local Government Finance Act of 1982 and subsequent amendments on the respective decision to split the crop cess and that is why the payments were not made," Mr Malima noted. The Local Government Finance Act provides for crop cess of between 3 and 5 per cent at farm gate price.

Mr Malima was responding to a basic question asked by Lupa MP, Mr Victor Mwambalaswa (CCM), who tasked government to explain why the money was not given to the farmers. In separate development, the Deputy Minister said the Registrar of Cooperatives accused leaders of the cooperative union, Upendo AMCOS in Chunya, Mbeya region, for allegedly swindling approximately 196.8m/-.

The Lupa MP had sought to know why members of the cooperative had been forced to pay up the money that was allegedly pocketed by leaders of the cooperative union. Mr Malima explained that it is alleged that leaders of the union conspired with bank employees and made double withdrawals amounting to US dollars 123,020 which was meant to pay farmers.

An audit conducted by the Ministry of Agriculture indicates a number of irregularities in the accounts of the said cooperative. Mr Malima noted that the leaders accused of the mismanagement of funds have been replaced.

Responding to another question asked earlier by Sikonge MP, Mr Said Nkumba (CCM), the Deputy Minister said prices of tobacco decreased from US dollar 2.5 per kilogramme in 2009/2010 to US dollar 1.4 during 2010/11. He however noted that the price during the financial year improved, slightly to US dollar 1.8 per kilogramme.

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