Friday, October 4, 2013

Be careful with tax exemptions, Professor Wangwe warns

A renowned Professor of Economy has warned the government to be careful with the proposed ideas of the development partners on the tax exemptions and wanted the stakeholders to weigh out their importance to see if they have mutual benefits for the development of the nation. Professor Samwel Wangwe gave the warning in Dar es Salaam yesterday when interviewed by journalists who wanted to know the prospects of the Public Expenditure Review (PER) process meeting discussions which started yesterday between the government and the development partners. A two day meeting is an annual consultative meeting and for this 2013 fiscal year, the two sides have put forward their discussions on two major aspects basing on how to enhance tax exemptions management and Agriculture input subsidies to farmers in the country. The forum to which journalists were allowed to cover its opening sessions only, has been organized by the Ministry of Finance and Economic planning. It is being attended by Regional commissioners, District Executive directors, Permanent secretaries and individual from private sectors, Ambassadors and High commissioners.   Professor Wangwe who is among the six invited professional economists noted that, the government should not only depend on tax exemptions as this is not the way to increase revenue, but has to look at how it should have benefited for the decision taken. However, he said adding that, it was far better to enhance investments potentials and create a conducive environment for investors instead of relying more on tax exemptions which he further noted  might cause a great lose to the government’s revenues. 

Professor Samwel Wangwe

Earlier, when opening the discussion meeting, the Minister for Finance Dr. William Mgimwa said that,  the government will continue to strengthen the PER process so that, it continues to provide a basis for relevant dialogue on its rightful role in the management of fiscal policy in Tanzania. The dialogue he said provides a forum for in-depth and close relationship between stakeholders and development partners, Compared to this year’s main aspects of discussions, in the previous budget discussion forum agreed to undertake analytical work in five areas. In addition to this years’ ideas, there were also equity and challenges of disadvantaged local government authorities, development of public operational investment manual as well as public private partnership and management of public investments in the country. He said in an exclusive interview that, the forum was intended to discuss the various assessments which have been overlooked by the development partners for the benefit of the nation and see how their advices can help increase productivity. He said, since they also are in part contributing to the national budget, the government gives them a chance to advise on what should be done and give technical advices on various areas as related with the Tax exemptions and how this can help increase government revenue.  He further said that, the government uses this forum as part of the development plans whereby their partners gives them advices on how to make use of the budget, and the best ways on how to collect revenue in areas that people and the nation might benefit. The meeting which ends today is expected to come out with concrete deliberations as main suggestions on what then government will have to adopt in its newly controlled budget management systems. Tanzania government and its development partners agreed on 2012 to revitalize the PER process as a result of a champion group which has been established with responsibility to define and approve an analytical work program to ensure its dissemination to key policy maskers as part of the national budget cycle.

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