The Government has proposed new sources of tax revenue for the 2021/22 Fiscal Year, aimed at bolstering the national coffer to continue funding various development projects. This was unveiled by the Minister for Finance and Planning, Dr. Mwigulu Nchemba while tabling the 2021/22 National Budget estimates in the Parliament in the capital city, Dodoma, yesterday.
The 36,33tril/- ambitious budget has seen public and private sector employees receiving a breather in tax levied on employment income, Pay as You Earn (PAYE) from nine to eight percent. "This measure is a continued effort by the Government to reduce tax-burden to employees whereby the rate has been reduced from 11 percent in 2015/16 to 8 percent in 2021/22," Dr. Nchemba said.
Equally, employees who were paying money in Value Retention Fee deducted to beneficiaries of loans from the Higher Education Students Loans Board may now have a reason to smile after the Government officially waived the six percent that was being deducted from their salaries. The 2021/2022 budget also comes as a blessing in disguise to Bodaboda and Bajaj riders who have seen the penalty for traffic offences reduced from 30,000/ o 10,000/-. In the next budget, the Government has also allocated 449bn/- for promotion of 92,619 public employees. According to Dr. Nchemba, 63 percent of the budget is meant for recurrent expenditure, while 13.26tri/- will bankroll development projects. "Development budget includes 10,4tri/- (about 78,2 percent) will be sourced from internal revenue sources and 2,9tri/- (21,8 percent) will be from external sources," he said.
To meet the target, the Minister said, the money is expected to be sourced from tax and non-tax revenues, Local Government Authorities (LGAs), aid and grants from Development Partners (DPs) as well as local and external Concessional Loans. Dr. Nchemba told the House that the new proposed tax revenue have taken into consideration the directives issued by President Samia Suluhu Hassan to devise new strategies of tax collection that are friendly to taxpayers. He said domestic revenue including LGAs revenue is projected at 15,9 percent of Gross Domestic Product (GDP) in 2021/22.
In the next financial year, the Government will also focus on raising the tax revenue to reach 13,5 percent of the Gross Domestic Product (GDP) from the projected 12,9 percent in 2020/21. The Finance Minister proposed amendment of Roads and Fuel Toll, CAP 220 to increase Road and Fuel Tolls by 100/- per each litre of Petrol and Diesel to be used for road maintenance in rural areas through (Tanzania Rural and Urban Roads Agency) (TARURA). "This measure is expected to generate government revenue by 322.15bn/-," he said.
