Mixed views as MPs debate budget.

Finance and Planning Minister, Dr Philip Mpango, presenting budget estimates for fiscal year 2016/2017 on Wednesday, 

THE waiving of tax exemptions on gratuity to lawmakers at the end of their tenure has been received with mixed reactions here with the Parliamentary Budget Committee and majority of MPs faulting the move while the opposition camp supported the proposal.

Presenting budget estimates for fiscal year 2016/2017 on Wednesday, Finance and Planning Minister, Dr Philip Mpango, announced removal of the exemptions, stating further that the gratuity will now be subjected to 5 per cent deduction in taxes.

However, the Chairperson of the Parliamentary Committee, Ms Hawa Ghasia, (Mtwara Rural - CCM) and a number of legislators who were debating the budget estimates were opposed to the new proposal by the government. Presenting views of the committee, Ms Ghasia said the five per cent tax on the gratuity amounted to double taxation against the lawmakers since they are charged Pay As You Earn (PAYE) on their salaries, each month.

However, Deputy Shadow Minister for Finance and Planning, Mr David Silinde (Momba - Chadema), supported the waiver, arguing further it should be extended to all former political leaders who have been enjoying the exemptions.

Mr Silinde in his shadow budget proposed as well that the government should scrap sitting allowances for Members of Parliament (MPs) and other civil servants and use the funds to improve social services.

Ms Ghasia tasked the government to reconsider reinstating the exemptions for parliamentarians or otherwise extend the waiver to all former public servants. The sentiments were shared by Mwibara MP, Mr Kangi Lugola (CCM), who encouraged fellow MPs to oppose the move.

He as well blasted the opposition for supporting the waiver, describing them as ‘free-riders.’

“MPs from the opposition are supporting the exemptions because they know if we press the government to re-introduce the exemption they will also benefit,” Mr Lugola charged when debating the budget estimates.

He complained further that lawmakers receive meagre incomes and since they are not paid pensions, gratuity is the only source of income they depend on at the end of their tenure.

The vocal MP complained as well that the government had allocated 44bn/- in the next financial year from 74bn/- in the current year for the National Audit Office of Tanzania (NAOT), which he said will cripple capacity of the office in conducting audits.

Meanwhile, The opposition camp in the National Assembly has presented shadow budget for the financial year 2016/2017, pegging the estimates at 22.491trl/- for recurrent and development expenditures.

Deputy Shadow Minister for Finance and Planning, Mr David Silinde (Momba - Chadema), presented the estimates, branding as unrealistic the financial plan presented by Finance and Planning Minister, Dr Philip Mpango, in the august House last Wednesday.

The opposition budget is less by 7.048trl/- compared to 29.539trl/- budget estimates presented by Minister Mpango for recurrent and development votes in the next financial year.

According to Mr Silinde, out of the 22.491trl/- a total of 15.410trl/- will be channelled to regular expenditure while 7.081trl/- will be spent on development projects, noting further that donor dependency will be 16 per cent. He said 35 per cent of development budget (2.478trl/-) will be allocated to boost rural economy while social services and infrastructure will receive 1.982trl/- and 1.203trl/-, respectively.

A total of 849.758bn/- and 566.505bn/- will be channelled for land management and tourism. Mr Silinde pegged domestic revenues at 18.990tr/- whereas a total of 3.500trl/- will be raised through borrowing and financial aid from development partners and international agencies.

“The main priority of our budget is on rural growth in which we have allocated 35 per cent of the funds to rural areas since we believe setting up of industries will only be possible if infrastructure in those areas is improved,” he stated.

The opposition legislator cited social services namely education, water and health, as the second priority on the shadow budget where 28 per cent of the development vote has been allocated for that purpose.

Mr Silinde as well proposed establishment of Real Estate Regulatory Authority to regulate the booming industry with a view of increasing government revenues. “Since the year 2011, the opposition camp has been propagating for establishment of the regulator which will enable to widen its tax base from the real estate industry,” he stated.

“The opposition camp as well faulted the move by the government to transfer the mandate of collecting property tax from local authorities to the Tanzania Revenue Authority (TRA), arguing that the move will cripple local councils.”

“Property tax was among major sources of revenues for the local councils and the decision to put the task under TRA will negatively affect the authorities,” the Momba legislator argued.