16 August 2017

Tanzania: Ex-CAG Stresses Effective Monitoring of Tax Exemptions

THE Retired Controller and Auditor General, Mr Ludovick Utouh, under his umbrella organisation, WAJIBU, yesterday launched Accountability Report which among others show low implementation of the CAG 2015/16 recommendations and called for close and effective monitoring on tax exemptions as they can be abused.

The WAJIBU accountability report dwells on CAG 2015/16 reports, and is based on three areas of central government, local government and public institutions. Speaking at the launch of the report, Mr Utouh who is the WAJIBU Executive Director said for the 2015/16 financial year, the audited reports show that 1.10tr/- tax exemptions were offered which is equal to 1.14 per cent of tax revenue.

He said WAJIBU decided to come up with a user-friendly language report due to the fact that CAG reports are too voluminous for the comfort of the majority of the public and are professionally prepared which requires the use of professional terms and jargons not common to the ordinary person.

"In simple words, tax exemptions comprise government revenues which simply the government says we do not want it, which for one reason or another, they are foregoing it and give it to others" he explained.

Mr Utouh called for transparency on tax exemptions as the government was losing billions of shillings thus foregoing revenue needed for development projects, say ing they should only be given where there is tangible benefit.

In the recommendations, the report, called for quarterly reports on organisations benefiting from tax exemptions through the Ministry of Finance and Planning. Moreover, the government has been advised to come up with comprehensive policy guiding tax exemptions as well as responsible officers and a formula to be used to offer the amount.

Giving the finding overview, Mr Utouh said that during his time in office, a religious organisation prayed for exemption of 120 tyres but upon following up it was realized that the institution had only one double cabin pickup.

"Tax exemptions can be abused, others bring in things, put them on the market for profit. There is need for a control mechanism to make effective follow-ups so that only those intended are awarded," he said.

He added that the exemptions especially in mining companies are denying the government a lot of tax revenue which could be directed to other development projects.

"The CAG's reports do not indicate or show the effects or implications which will result from the non implementation of the weaknesses noted and raised thus derived us to make simple analysis for ordinary citizens," Mr Utouh noted.

Much as he encouraged the public to read the report which is in Swahili, WAJIBU expects it will increase awareness on the CAG reports and in turn, the citizens are expected to be better prepared for demanding accountability from different government bodies.

In preparations of the reports, WAJIBU collaborated with GIZ through its Good Financial Governance programme (GFG).

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