Tanzania parliament passed the government's U.S.$14 Billion Budget for the 2018/19 financial year. 348 MPs were present and 266 voted in favour of the revenue and expenditure plan, while 82 rejected it.
Parliament yesterday passed the government's Sh32.5 trillion Budget for the 2018/19 financial year.
Of the 348 MPs who were in the debating chamber, 266 voted in favour of the revenue and expenditure plan, while 82 rejected it. Forty-three lawmakers were absent.
Opposition MPs who voted in favour of the Budget were from the Civic United Front (CUF) faction led by Prof Ibrahim Lipumba. They included Mr Maftaha Nachuma (Mtwara Urban) and Ms Magdalena Sakaya (Kaliua). Absentees included Chadema lawmakers Freeman Mbowe (Hai), Ester Bulaya (Bunda Urban), John Mnyika (Kibamba) and Peter Msigwa (Iringa Urban). Others were Mr Godbless Lema (Arusha Urban), Mr John Heche (Tarime), Ms Esther Matiko (Tarime Urban) and Mr Tundu Lissu, who has not attended parliamentary sittings since he was shot and seriously injured in an assassination attempt in Ddoma last September.
Earlier, Finance and Planning minister Phillip Mpango defended the Budget, and revealed why the government chose a Swiss firm to roll out an electronic tax stamp (ETS) system from September 1.
ETS, proposed in the government's 2018/19 budget, was given a thumbs down by many MPs, with the Budget Committee questioning the rationale of choosing a company that will invest "only" $21,533,827 (about Sh48.5 billion), but collect a cool Sh66.69 billion annually in electronic stamp duty from consumers of bottled water, cigarettes, soft drinks and alcoholic beverages.
A number of MPs, including Mr Mussa Azzan "Zungu" (Ilala-CCM) and Mr Suleiman Saddiq (CCM- Mvomero), asked the government to reconsider its decision to hire SICPA to oversee ETS across the country for five years.
"Since the server will remain the property of the Swiss firm, we will simply be surrendering our tax regime to a foreign company for a period of five years," said Mr Azzan, adding that the task should be undertaken by the government so that the money collected by SICPA could become part of government revenue.
But while acknowledging MPs' patriotism, Dr Mpango said the government hired the Swiss firm after it was convinced that Tanzania lacks the relevant technology.
"We worked on this, and established that we didn't have the requisite technology. That is why no local company applied when we floated the tender," he said.
Dr Mpango added that benefits of ETS would far outstrip SICPA's earnings from the new setup. He refuted reports that the Swiss firm would pocket at least Sh66.69 billion annually. "Upon completion, the system will be deployed in industries in line with our requirements. Its benefits are much more than the money that will be collected through the system."
ETS will enable the government to use modern technology to obtain production data in real time from manufacturers.
The move is also aimed at curbing revenue leakage, and make it possible to determine in advance the amount of excise duty, value added tax (VAT) and income tax to be paid. On claims that government budgets have in recent years been unrealistic, Dr Mpango challenged MPs to be honest. "We need to be honest to ourselves and our country and at the same time be as pragmatic as possible. It's easier said than done. We didn't go to such great lengths to prepare this budget just to give ourselves a false sense of hope and satisfaction," he said.
While MPs criticised some proposals during the eight days the budget was debated in Parliament, they praised the government for some decisions, including the reduction of corporate income tax rate from 30 per cent to 20 per cent for new investors in the pharmaceutical and leather industries for five years from 2018/19 to 2022/23.
A proposal to offer tax waivers to firms manufacturing all forms of non-petroleum products and building materials using locally-sourced raw materials, as well as the introduction of a tax amnesty on interest and penalties for six months starting from July 1, 2018 to December 31, 2018 were also praised by MPs.
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