Dar es Salaam — The Parliament told the government yesterday to undertake several measures in an effort to boost its resource envelope and up its development expenditure.
Debating the government's Sh36-trillion budget for the financial year 2021/22, the Parliament's Budget Committee chairman, Mr Sillo Baran, said a critical analysis on the budget figures reveals that it is only a meagre percentage of domestically-sourced funds that go to financing development projects.
Out of the Sh36.33 trillion, Mr Baran said, Sh23 billion is for recurrent expenditure while the remaining Sh13.33 trillion is for development projects.
"Data shows that out of all the domestically-sourced funds, it is only Sh3.03 trillion that is left to finance development project while the bulk of the money collected locally is spent as recurrent expenditure. This means that our locally sourced funds can only manage to finance 8.3 percent of the entire development budget," he said, asking the government to up its revenue monitoring and management mechanism and look for more grants and concessional loans from development partners.
He said the government should also find a way of reducing its borrowing from local sources so that the lenders can channel the money to the private sector to boost production and economic growth.
In an effort to curb revenue loss through tax evasion, the committee told the government to extend the rollout of Electronic Tax Stamps (ETS) to more products.
Mr Baran said the ETS system was good because it enabled the government to use modern technology to obtain production data on a timely basis (real time) from manufacturers.
The move aids the government in curbing revenue leakages - and also to determine in advance the amount of tax to be paid as excise duty, value-added tax and income tax.
"... .It helps the government to identify genuine products and fakes ones. It removes the possibility of cheating [on the right amount of tax to be paid] by some dishonest businesspeople... .," he said, noting however that the only challenge with the system was the high costs associated with the stamps.
He said with the benefits, the government was advising the government to see a possibility of extending ETS' to other products like cement, edible oil and iron sheets.
"This committee is also advising the government to sit down with the contractor and find a way of reviewing the rates. The government must also put in place a strategy that will see the system remain in use when the current contract with the contractor expires," he said.
In Tanzania, the government announced plans to adopt the Electronic Tax Stamps (ETS) system in June 2018 and the first phase was conducted on January 15, 2019 whereby stamps were installed on 19 companies that produce alcohol, wine and spirits.
Phase two of the project was rolled out on August 1, 2019 when ETS' were stamped on sweetened flavored water and other non-alcoholic beverages, like energy and malt drinks and soda.
The third phase, which involved enrolling electronic stamps on fruit juices (including grape must), vegetable juices (under Heading 20.09), bottled drinking water, was conducted on November 1, 2020.
Regarding the government's proposal to collect property tax through payments of electricity bills, the committee said the move would penalise even tenants and the old people who are exempted from payment of property tax.
It would also mean that those in rural areas will also be paying property tax, contrary to the law.
Member of Parliament (MPs) called upon the government to if not critically analysed, property tax could end up being a thorn in the fresh of Tanzanians.
"Charging it through the electricity billing system will boost government revenue but it will result into a public outcry," said Mr Charles Mwijage (Muleba North - CCM).