A budget of stakeholders’ views can be a non-starter

-operators in one field or another, as the competition environment is broadened. Age-old habits where the government felt duty bound to protect local operators, or local consumers, are falling by the wayside; reminders to such effect affirmatively put on the margin.

One such field was a plethora of demands for halting grain exports to prevent the sharp rise in maize prices, though habitually rice and other grains aren’t included in such demands. Now the government has found a way to handle the matter, namely by subsidising internal subsidies and removing most restrictions on imports, to beef up supplies in the market. There are other claimants to tax or other consideration, feeling the heated competition, i.e haulage truck operators.

For some reason, the truck operators have opted to go public on their demands for the next estimates, pleading for reduction of withholding tax charged on trucks from 20 tonnes of cargo carriage and above. The demand was common among the whole range of truck operators, as it was agreed between the Tanzania Truck Owners Association (TATOA) and the Tanzania Medium and Small Truck Owners Association (TAMSTOA). It was delivered to the commissioner general of the Tanzania Revenue Authority (TRA) as an advisory on their part, though the right place would be sounding out just the legislature.

The kernel of the demands is a recommendation to the government for an alternative tax rate of 1m/- per lorry as the current 2.7m- rate is ‘unpayable.’ They assert that during the current financial year, some lorry operators failed to pay the 2.79m/- applicable rate, the result of shooting up an earlier withholding tax rate of 0.8m/- per vehicle. First it was raised 3.5m/- per vehicle and then due to stakeholders’ protests the rate was brought down to 2.7m/- for the fiscal year, so if the government saw this rate as fair, reducing it to 1m/- can hardly add up.

The rapid explanation given in a press briefing is inadequate to figure out the justification of the recommendation, how far it is justifiable compared to other taxpayers, not exactly compared with other countries. The stakeholders were a bit effusive on this aspect, demanding that lorry operators pay 2.7m/- per vehicle could see many of them shifting their registrations to Zambia, where apparently the rates are lower. Such an affirmation is at times just a scarecrow.

Designing policy initiatives in the budget estimates is a give and take, as to how much the government needs to collect, and what are the red lines of being fair to each sector of business (with entrepreneurs and employees) on the basis of a wider policy framework, for instance the doing business environment. Admittedly the stakeholders are focusing on that aspect too, but their demands could easily be seen to be inequitable in relation to expectations of other sectors. As Zambia is landlocked, it may overly rely on trucks; that isn’t for us to solve.