The Citizen (Dar es Salaam)
Karl Lyimo
7 June 2011
opinion
Today is Budget Day (B-Day) when finance ministers in the East African Community member states table proposals for revenue collections and expenditures in Parliament for debate.
Going beyond generalised comments on the Budgets at this stage would be tantamount an exercise in futility. This is considering that, after weeks of involved debate regarding the budgets, the end-product might very well turn out to be a different kettle of fish altogether, compared to the original proposals.
So, suffice it here to say today’s business’ll be confined to general comments touching on pertinent points here and there, in a manner of speaking. For starters, the alternative Budget proposals by Opposition political parties to be tabled in Parliament today are most interesting. Last week they told reporter that their proposals would drastically cut taxes on fuel, and eliminating ‘posho’ money: sitting allowances (which are never taxed), travel imprests (rarely retired), etc, in government and Parliament!
But, if past experience is anything to go by, nobody in the corridors of power (read ‘public gravy train’) will do anything about that! It’d be like cutting their lifeline to easy money…!
For his part, Finance & Economic Affairs Minister Mustafa Mkulo gave a much generalised preview of what the new Budget’ll be about. Addressing the Parliamentary Standing Committee on Finance & Economic Affairs in Dar on June 1, Mkullo said the Tsh13.5-trillion Budget “will focus on several economic challenges the nation’s currently facing, including ever-rising oil prices.”
To that end, Mkullo plans to reduce some of the taxes currently levied on fuel (taking a leaf out of the Opposition’s Budget Book?), and address the persisting power shortages crippling industries and other socio-economic development activities. [Daily News: June 2, 2011].
Of course, the increase of about Sh3 trillion over last year’s budget is nothing to write home about. It’ll barely compensate for inflation, which hovers around 16-17 per cent, not the 8.2 per cent being bandied about in official circles!
All in all, the FY-2011/12 Budget reportedly lays emphasis on five national priorities. According to the National Planning Commission executive secretary, Dr Philip Mpango, these are Energy; Transport Infrastructure (ports, railways, roads and telecommunications); Agriculture; Human Resources (Education?), and Water. [HabariLeo: May 31, 2011].
In a sense, this small number of ‘priorities’ cannily’ gives hope of the Budget being manageable in a struggling economy – compared with the 13 ‘priorities’ which President Jakaya Kikwete identified when inaugurating the new Parliament on November 18, 2010… It certainly is a great ‘relief’ from the 96 ‘priorities’ which Candidate Kikwete pledged during his whirlwind campaign for a second presidential term in the Oct. 2010 elections!
Perhaps with the exception of Telecommunications (Tanzania is awash in cellular hand-phones today), the other four ‘priorities’ have remained in tatters beginning with the mid-1970s! Matter of fact, if we seriously concentrated on two priorities – Agriculture and Energy – their contribution to GDP, if prudently managed, would automatically finance development of the other socio-economic sectors!
But, no matter… What matters is the substance – the contents of the budgetary package – how government organs follow through in implementing the Budget… And how effectively the authorities plug public revenue leaks and curb acts of malfeasance and misfeasance involving budgeted funds. Also important is reviewing the extant numerous tax exemptions by reducing discretionary exemptions, and rooting out non-reforming pestilential tax evaders.
I’m astounded at the way people (including some of our development partners) keep harping on widening the tax base and spreading out new tax nets to garner more tax revenues.
This is tantamount to barking up the wrong tree. The right ‘tree to bark up’ first and foremost is curbing revenue loss in all its forms. As already noted, these include – but are not limited to – wanton tax exemptions; filching public funds; rampant tax evasion and other u-Fisadi. It’s akin to Math’s simultaneous equation of trying to fill a sink even as the drainpipe remains unplugged.
The point missed by our decision-makers as a matter of course is why this should be so. As one would plug the drainpipe to fill the sink, so should be staunch haemorrhage of public resources… Cheers!
Mr Lyimo is a socioeconomic commentator based in Dar es Salaam.
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Development Planners, Partners Miss the Point