Tax holiday

Fairness in mining guaranteed - JK

2006-04-08
By Beatrice Bandawe, Gaborone

The government plans to review all mining contracts to guarantee fairness.

Speaking to Tanzanians living in Botswana on Thursday, Kikwete said, the aim was to enable the locals benefit more from the mining industry.

President Jakaya Kikwete said this is meant to ensure both the country and the foreign multinationals engaged in mining benefited.

'We want fair play. We want to create a win-win-situation in the mining sector,' said the President.

However, Kikwete dispelled fears that the move was aimed at, or would scare away investors in the mining industry.
He said the government only wanted to ensure both investors and Tanzanians benefited equally from the lucrative mining industry.

The President raised concern over the current arrangement and the foregoing contracts, which give investors more control, and the accruing benefits in the mining industry, than the locals.

It is time Tanzanians got involved and benefited from the vast multibillion mining sector.

Kikwete at the same time put investors on notice, saying the government was closely monitoring investors who transfer ownership of their business ventures immediately after the end of the tax holiday period.

The President is on a two-day official visit to the southern African nations.

Kikwete disclosed that his cabinet had already begun reviewing the contracts to ensure that proceeds from the industry benefited the common man.

The President was fielding questions from Tanzanians who had wanted to know measures the government was taking to enable the locals benefit from the industry.

But he warned that errant investors who contravened the legal requirements of their contracts would not be condoned by his government.

He commended his predecessors for building a strong foundation, which he was now challenged to nurture.
The President called on Tanzanians living abroad to remember returning home to build their nation.

Tanzanians living in Botswana pledged their support for President Kikwete in his endeavour to serve the people.
They said they had faith in him and would co-operate with the government for the betterment of Tanzania and its people.

President Kikwete also met SADC Secretary General, Tomaz Salomao, who among other things, warned that Tanzania, DRC, Angola and South Africa were at risk of contracting bird flu.

He, however, said SADC had already consulted the World Health Organisation to explore possible ways of helping the four countries cope and fight the virus.'WHO has agreed to help,' Salomao said.​

MP furious over tax holidays for investors

2008-06-21
By Lusekelo Philemon, Dodoma

The five-year tax holiday enjoyed by tourist hotels owned by foreign investors in Tanzania have drawn the wrath of Members of Parliament, some saying the exemptions were but a series of loopholes through which to evade taxes after the grace period is over.

The MPs` remarks came during the scheduled fifth and last day of debate on the estimates of the 2008/09 government budget, tabled in the National Assembly here on Thursday last week by Finance and Economy minister Mustafa Mkulo.

A number of legislators who contributed to the debate yesterday said some investors kept renaming their hotels and other related ventures or instituting management changes in highly suspect attempts bent on helping them maximise profits.

``Most investors doing business in this sector in our country have been getting huge profits, while paying very little to the government in taxes and other dues,`` charged Maulida Komu (Special Seats � Chadema).

``For years they have been evading taxes, mainly thanks to the gaping loopholes made easily available during the grace period. This has made the government lose billions upon billions of shillings in revenue from the sector,`` she added.

Without giving any names, she said many of the hotels that have been changing names after the grace period are based in Dar es Salaam, Mwanza, Arusha and other major urban centres.

``This is an area the government was supposed to work on in order to get more revenue. This is one of the least tapped areas in the country in terms of tax collection,`` the opposition legislator pointed out.
She said local investors in the hotel industry have been paying huge taxes although they got far lower profits than their foreign counterparts.

``Indigenous Tanzanians who have invested in guest houses are subjected to lots of taxes while their profits are very meagre. This is very unfair to our people. The government in general and the tax authorities in particular should work more seriously and urgently on this matter,`` she told the House.

Komu also expressed her discomfort over the fact that the government was often fond of taxing soft drinks, beer and cigarettes more heavily whenever it was time for a new budget.

``This is very dangerous� It amounts to adding to the weight of the burden on the shoulders of the poor people already knee-deep in economic and other problems,`` she noted, warning: ``Should the people stop consuming beer, soda and cigarettes, the country`s economy will die a natural death.``

The MP blamed controversial and other bogus contracts in the mining and energy sectors and the �ten per cent kickbacks� they are commonly said to attract for the economic mess millions of Tanzanians were languishing in.

She appealed to Finance and Economy minister Mustafa Mkulo and his team of experts ``to step up tax collection efforts by casting their net wider to cover in all areas that have not been tapped rather than keep relying on items that contribute little to the country`s economy``.

``Minister Mkulo should rescue the poor Tanzanians suffering out there. Many of them don�t know where and how they will get their next meal,`` she added.

Turning to inflation, the legislator said it was strange that crude prices in the Middle East had fallen by $5 per barrel but fuel prices in Tanzania were still rising.

She said the local oil dealers were after indefensibly high profits and called on the government to tame them.

Another Special Seats MP, CCM�s Anna Abdallah, urged members of the ruling party to work together in solving the problem facing the country.

She cited the scandal allegations revolving around the Bank of Tanzania�s Central Bank�s External Payments Arrears (EPA) account, saying collective efforts were needed to recover the huge amounts of money involved from the culprits within the shortest possible time.

``We should not be divided on this. What we need is to ensure that the money is recovered. I am sure none of us here present acquiesces in corruption,``said the former cabinet minister.

She also advised the government to put up its own fertiliser factory ``to meet the country`s demand and uplift our agriculture``, saying Tanzania was rich in natural gas, an important raw material in the production of fertiliser.

Tarime legislator Chacha Wangwe (Chadema) called for increased government support for agriculture and a more focused war on grand corruption within the government system.

Susan Lyimo (Special Seats - Chadema) concurred, adding that there was need to communication as this was not a luxury and imposing higher taxes on mobile phones as proposed under the 2008/09 budget estimates was unacceptable.

By the time we went to press yesterday, minister Mkulo was still responding to wide-ranging MPs` reservations and recommendations on the budget estimates, which the House was later expected to endorse.​