Vice President Dr Philip Mpango unveiled the plan in Dar es Salaam yesterday when officiating at the Tax and Investment Forum 2024 themed: ‘Investment policy improvement, domestic revenue collection and inclusive economic growth,’ collecting experts and top executives from within and outside the country.
Standing in for President Samia Suluhu Hassan at the forum, Dr Mpango said Tanzania has been collecting revenues below 12 percent for the past ten years, which is lower than the 15.6 percent average collected in Africa.
The review will help businesses to thrive and tax payers to meet their obligation to pay taxes, he said.
“The government imposes taxes, seeks loans and aid for covering the running cost of the government and implementation of development projects.
“When traders and investors do not pay tax as required it weakens the government’s execution of its responsibilities to the public,” he stated, reminding participants that the government is also responsible for formulating policies and creating a conducive environment enabling investment and trading activities to take place.
This implies that taxpayers pay tax as required by law, he stated, highlighting that for most of the past decade tax revenue collection has been below 12 percent of the country’s GDP.
This is way below the average 15.6 percent noticeable for African states by globally accessible data, thus the country is required to come up with strategies that lead to 15 percent revenue to GDP ratio, he specified.
“Many countries that rank in the lower middle-income economy are above 13 percent, for example Senegal is at 18.7 percent, Zambia 16.8 percent, Ghana 14.1 percent, Cote d’Ivoire 13.9 percent and Cameroon 13.3 percent, he said.
He asked top government officials to show humbleness and consideration to stakeholders from the private sector and tax payers making propositions, as the forum is meant to be a platform for improving investment and tax policies.
Such conduct will strengthen the participation of all members as part of preparing budget estimates for the coming financial year, he asserted.
“I believe that the views that will be shared in this forum will be used in the process of preparing the budget for the financial year 2024/25, I therefore call upon all participants to give their opinions and suggestions freely in order to further improve our country’s investment and tax policies,” he said.
“There is no sustainable investment without taxes. That is the truth. As for the finance ministers who are in attendance here today, I would like to urge you to consider the advice given by the private sector and all taxpayers so that the stakeholders who are following up on this event may not deem their participation as futile.”
Forum participants need to offer contributions focused on creating innovative ways that will contribute to revenue collected by the central government without draining businesses and investors, he further urged.
“Discuss amongst each other on the best use of partnerships between the public and private sector,” he urged, citing the use of bonds issued by public organizations and institutions to cover the costs of development projects.
“The discussions will be fruitful if you also focus on identifying and regulating the dangers posed by the use of information technology in revenue collection by the government including online theft and capital flight,” he specified.
Expressing confidence in the forum that it will help introduce strategies for attracting more investments into the country, he suggested that it provides an opportunity for Tanzania to venture into agreements on avoidance of double taxation to boost investments.
Another sphere of agreement related to acquisition of land for investment purposes, plus the supply of sustainable and reliable energy. Another aspect is ensuring accessibility to accurate statistics needed by investors and tax authorities in like manner, he elaborated.
The forum needs to deliberate on ways to build capacity and attract local investors without compromising the quality of goods and competitiveness, he said.
He similarly challenged the forum to take up the 4Rs philosophy set out by President Samia, namely reconciliation, resilience, rebuilding and reform in reflecting on the country’s investment environment and attracting new investors. That is essential in order to attain the vision of becoming a well-placed middle-income economy by the year 2050 or earlier, he added.
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