Saturday, December 7, 2013
Tax exemptions in the country is still high, PAC report
THE rate of tax exemptions in the country is high and over excited says the Parliamentary Accounts Committee (PAC) report issued yesterday to Members of Parliament. The report presented by its Chairman Kabwe Zuberi Zitto (Chadema) shows that tax exemptions has increased from Sh. 1.0 trillion in 2010/11 to Sh. 1.8 trillion in 2011/12 financial year respectively. Either the report shows that, tax exemptions issued this year alone is equivalent to 13 percent of the total budget of 2011/12 financial year, which is approximately Sh. 13.5 trillion. The report further quotes that incase tax exemptions were withdrawn, this could be equivalent to 27 percent of the total revenue collections of Sh. 8.5 trillion instead of Sh. 6.7 trillion. In view of the available statistics, the PAC committee is very much disappointed with a constant high increase rate of the tax exemptions going on in the country which in 2011/2012 financial year alone, is equivalent to 4.3 percent of the National Gross Domestic Product (GDP). While tabling the report, the committee chairman Zitto said that, his committee has jointly agreed with the Controller and Accounts General (CAG) that with effect from 2013/14, his office would embark on the auditing of the accounts set for tax exemption with a view to see if are used for the purpose intended and at the same time to increase severe controlling measures against the practice. Either he noted that, the audit report on tax exemption would be reported to the general public objectively to consolidate the basic concepts of transparency and accountability as related with the expenditure of public fund. The report further reveals that, Tanzania Revenue Authority (TRA), the major tax collector in the country is faced with many civil cases in courts amounting to over Sh. 153.9 billion which are pending waiting for their judgment. Fear has reigned among PAC members over such case which up to now is not yet known if the government would win such cases. Incase TRA would be defeated, and then the government would incur the loss equivalent to such the value of the money.
The chairman Zitto listed one of the companies which filed its case in court between M/s TIOT Ltd and TRA, in a case which involves the importation of crude oil in the country without having paid import tax during the years 2001/02 and 2006/07 respectively. Either TRA sought for the assistance from the Attorney General’s office and the Ministry of Finance in order to help speed up the case, but unfortunately up to now, the case is not yet decided an aspect t which indicate that, the government is likely to incur such a huge loss of the money. The committee has advised the government to take a keen responsibility to overlook at such cases, and in order to avoid further mishaps, the TRA must depend entirely on the AG for defense in order to finish the pending civil cases as related with the tax which are waiting judgment. The PAC report also noted although TRA has succeeded to a certain extent in tax collection, but there are still a number of cheatings being made by some companies in the country. Quoting the CAG report of 2010/11 that asked reasons why the government had stopped the use of a meter that was installed to measure the quantity of oil in Tanga and Dar res Salaam ports and later caused a loss to the government by doing purchasing which could never give good products. The committee interviewed the concerned officials at the Tanzania Ports Authority (TPA) where the meters had been installed through Kurasini Oil Jetty (KOJ) in 2004 and effectively started in 2005. However, in February 2011 Weight and Measure Agency (WMA) counterchecked the usage of the meters and found out that, they were not fit to give good results. After realizing this, the agency then wrote a letter to TRA requesting them to stop their usage as it had been discovered to have not giving correct measurements, an aspect that causes endless cries from tax payers. Contributing to the report, Masoud Abdallah Saliom (CUF) has blamed the government saying that, poor performance of some of the government officials is a cause of loss of properties in the country. He noted that, the continued lack of transparency along government officials will hurt the nation as there is no one is there to penalize them. He has however appealed tom the government not to be slow in decision making in order to eradicate all sorts of bureaucracy in the government.