Zitto na Demokrasia

Zitto na Demokrasia

2012/13 Budget Participation

with 13 comments

On June the 14th this year the Finance Minister will present the Government Budget for approval by Parliament. As it is well known the budget is the annual instrument for implementing a country’s development strategy.

In the build up to this year’s budget I am taking this opportunity as Shadow Finance Minister to invite everyone to put forward their ideas/suggestions on what areas should be of priority in this year’s budget.

Your views will be collected and analyzed to form part of the Shadow Budget to be presented to Parliament and play a pivotal role in influencing MPs to adopt the proposals to improve the Government Budget.

Some of the major areas of concern that we are focusing on are;

1. Inflation which is largely contributed by food and energy prices (56.7% of the basket of goods and services with an inflation rate of 27%). Ideas on cutting inflation and hence prevent further deterioration of our poor people’s income are largely welcome.

2. Unemployment especially youth unemployment is a mammoth challenge in our country. Tanzania’s phenomenal growth (economic growth) has not had a trickle down effect and in turn not translated into enough jobs which has increased the potential of a demographic bomb instead of dividend of having more young people and hence larger work force.

3. Reducing the current account deficit by cutting down on Imports & increasing Exports. Statistics shows that by the year ending March 2012 Tanzania import bill totalled USD 12.6bn while exports were a mere USD 6.9bn. The current account deficit stands at incredible USD 5.2bn! Tourism and Transport sectors have the potential of being even bigger forex earners as well as the proposed gas fired electricity generation would help cut down imports. Ideas in this area are needed.

5. More domestic revenue to finance development projects that are badly needed. By closing tax loopholes and reigning in on tax exemptions. Simultaneous cuts in recurrent spending and scaling up of development spending would foster strong growth.

6. The National Debt has drastically increased from TZS 7 trillions in 2009 to TZS 11 trillions in 2010 to a whopping TZS 22 trillions by march 2012. The costs for servicing this debt is the largest budget item in the proposed 2012/13 budget at TZS 2.7trillions is what we are paying this year to service our debt. This is equal to 34% of the whole budget for recurrent expenditure 21% of the total budget. Our nation’s spiraling debt is bankrupting the future of Tanzania’s children and put them at the mercy of our lenders.

Your ideas to help us improve the budget in order to foster growth and poverty eradication will be taken very seriously. Be part of transformation you want to see for Tanzania.

Written by zittokabwe

June 4, 2012 at 11:26 AM

13 Responses

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  1. since you promised to take our comments seriously, so i wil also be serious on this: one of the biggest mistake that we make on every budget every year is ignoring the importance of mordenising our societies and our institutions! Its a well known fact that our economy, our leaders and even our societies lack confidense on the international arena mostly because we are still living “20th century” on “21st century”.! Even this “kilimo kwanza thing” it could have been a “big deal” if we could have just “sophisicate” it a little, not like now which is all about just talking, “policing”, planing evryday, “mipango mikakati ya utekelezaji”, blah blah blah but nothing real is happening.! I am 23 years old and i have been working with world vision, mviwata and local governments for the past 3 years, and i have seen how this affects us, we need to keep up the pace and move with the world, we need to mordenise our economy, agriculture, institutions, and even our societies.!

    habibu bakili anga

    June 4, 2012 at 12:07 PM

  2. Sajjo L.M.

    June 4, 2012 at 12:10 PM

  3. Mh. number 4 as some of the major areas of concern that you are focusing on is missing on the list.

  4. We need to revive the petroleum refinery. , this will he the only way to really reduce the cost of imported fuel which plays a big percentage in the budget expenditure, , cut on the massive fuel drinking vx n gx cars, introduce a service levy to all hotels to help boost the hospitality industry training college e.g 3% like what Kenya is doing. TRA need to do more work and collect more taxes or get rid of their D.G . It’s unfair that only a small percentage of us are directly paying taxes. Make lending rate affordable to increase lending to SME’s,

    allen

    June 4, 2012 at 12:46 PM

  5. I would like to contribute on unemployment.I heard few weeks ago about the big part of economy (about 50%) being unregistered micro and small businesses that also dont pay income tax.As i understand it is the fastest growing sector in the economy but not much has been done to promote this sector which could bring a lot of employment to the people.if government could do better to register businesses from this sector and provide support for them to manage their business better thy could grow faster and provide more employment and attract more small entreprenures to start more business.if they will be registered more financial institutions will provide loans in this sector and with lower interest because the risk will be lowered dramatically if the businesses are registered.
    So if this is done properly,we stand to gain More Employment especially for unskilled labour,more revenues for the government, and more micro financing allocation from private financial institutions at lower rates.

    Adam

    June 4, 2012 at 3:01 PM

  6. I would like to contribute on unemployment.I heard few weeks ago about the big part of economy (about 50%) being unregistered micro and small businesses that also dont pay income tax.As i understand it is the fastest growing sector in the economy but not much has been done to promote this sector which could bring a lot of employment to the people.if government could do better to register businesses from this sector and provide support for them to manage their business better thy could grow faster and provide more employment and attract more small entreprenures to start more business.if they will be registered more financial institutions will provide loans in this sector and with lower interest because the risk will be lowered dramatically if the businesses are registered.
    So if this is done properly,we stand to gain More Employment especially for unskilled labour,more revenues for the government, and more micro financing allocation from private financial institutions at lower rates.

    Adam makuka

    June 4, 2012 at 3:07 PM

  7. 1. Widening tax base is crucial. stop raising taxes on alcohol,beverages,ciggarette,vehicle registration and other related products.

    2. Stopping tax exemptions and fixing tax avoidance loopholes. TRA to be stregthened with delpoyment of better system and investment in human capital.

    3. Encourage investment in agro value chain products to increase value to the agro products and increase exports. Incentives to value chain investments through tax credit can be offered.
    4. Establishment of youth guarantee fund basing on guaranteeing innovative ideas in creating jobs for the youth. This will empower youth to be job creators instead of job seekeers.

    5.All govt guarantee fund to be harmonized and target specific groups with specific supervisions. BOT,MOF should not be allowed to administer guarantee funding. This two institutions should provide policy direction on governance of the funding.

    Edward

    June 4, 2012 at 3:50 PM

  8. Hi, a short term measure to assist our farmers is to allow the local currency depreciate so that our trandional (cotton, coffee and cashewnut) and non traditional (tourism) exports can be competitive with our east african neighbours who have allowed their currencies to depreciate. Fixing the exchange as it the case at the moment will only harm our exports and further worsen our current account deficit . The counter argument could be that could lead to further inflationary pressure, but this is unlikely due to better food harvest all around the region and falling global oil prices.

    In addition, we are facing a global recession which will reduce the demand for our exports and further slowdown our economy.

    So please advise the central bank to stop using monetary tools to solve a supply side problem and further slowdown the economy. We should not always our Kenyan and Uganda friends.

    The Great!

    June 4, 2012 at 3:55 PM

  9. Thanks for affording us the opportunity to comment.
    1. Please continue fighting for avoidance of unnecessary expenditure in the public sector. I worked for a total of 25 years as public servant at mid to very senior levels. No allowances were paid for attending meetings during working hours. Later when I had moved on to the private sector but had to serve on Boards/Commitees of public institutions, I was shocked to be introduced to the practice of several allowances for committee meetings and major meetings held on the same day. Go to any govt office and see the numbers and types of imported swivel chairs and desks even the lowest ranking civil servant use.
    2. Abolishing Conspicuos spending on limos and parties could go a long way in saving some money for better use. Haba na haba ujaza kibaba.
    3. The banking system needs review. Bank interest rates for saving accounts are on the main below 5 per cent. But lending rates go up to 20 per cent. This arrangement does not encourage saving and borrowing for the common Tanzanian. We should not expect much economic growth when only the already rich can access financing.
    4. Infrastructure development should be given emphasis. I have traveled the world. I donot know of any country that has ignored its railway sytem and developed fast. Air travel needs revamping.
    5. Please recommend a visit to Norway and Malaysia to learn how they have managed their oil and gas revenue.
    6. We have ‘played to many games’ with our education system. We need to go back to what we had in 1960s and 1970s.

    I wish I had more time and space

    Dominico

    Dominico Kabyemera

    June 6, 2012 at 12:44 PM

  10. Additional Comment:

    Fight for abolition of Tax Exemptions. They have been abused

    Dominico Kabyemera

    June 6, 2012 at 12:48 PM

  11. first we need to look into billions of shillings lost due to pilferage and unaccounted by the relevant authorities
    show us one person who has been taken to task and the money recovered
    GET THEM and we will be having more money in our coffers

    For taxation purpose forget buying expensive vehicles and give top priority to National ID
    this will automatically get us the statistics of our population thus easy way to monitoring incomes,assets of people liable to tax

    As for Tax incentive we cannot scrap that as this is a norm of attracting FDI and local investment
    instead the relevant departments should be strict on monitoring how this incentives are used and what is our gain

    Mobile phones have a 18% Vat but if you check on the number of VAT paid mobile phones it would hardly come to 20% of the millions of phones in the Country,Scrap this Tax and instead increase tax on talk time
    People will be able to bring in Mobile phone of their own choice freely without buying from agents who know how to pass through the legal or illegal routes

    Repairs of our city and town roads has no comments as for years nothing is being done, this inturn effects vehicle repairs and thus our import bill

    zv

    June 14, 2012 at 4:12 PM

  12. I think the gvnmt should reduce expenditure for sector which spend alot of monney and not for poor people who have low income, this will help to reduce inflation

    Agrey

    July 1, 2012 at 2:57 PM

  13. I’m not that much of a online reader to be honest but your blogs really nice, keep
    it up! I’ll go ahead and bookmark your website to come back in the future. All the best

    Doyle Brunson

    August 29, 2012 at 11:42 PM


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