Several analysts have praised President John Magufuli’s administration for taking a lead role in implementing new income tax measures, saying it would positively benefit fixed low-income earners.
The new tax measures approved by the National Assembly early this week directs all public leaders, including the president, to pay five per cent income tax on their gratuity at the end of the terms in office.
Speaking in separate interviews, political, academic and economic analysts said the step is positive and a move in the right direction on efforts to boost revenue collection. A political analyst with the University of Dar es Salaam (UDSM), Professor Kitila Mkumbo, was concerned that it was extremely wrong for leaders not to be taxed.
“It clearly sets-up transparency in the government.” More significantly, “the decision by leaders to pay tax is patriotic indeed,” he told the ‘Daily News’ in a telephone interview.
According to Prof Mkumbo, President Magufuli’s administration has demonstrated a willy-nilly commitment to ‘walk the talk.’ However, he urged the government to pioneer special mechanisms that will wipe out biases in gratuity amongst civil servants.
“I feel it is high time matters of public concern were seriously addressed. It’s actually not well that a senior professor retiring today gets a mere 40m/- after such a long service while an MP gets 200m/-.”
The analyst had his sentiments shared by Dr Donath Olomi, an economic analyst, who noted that there was need to have a clear policy and incorporate the new measures in the constitution.
“This again needs a public debate to reach the same understanding,” he observed. Renowned academician and political analyst, Professor Mwesiga Baregu, said the new income tax reforms clearly shows a “bright future for Tanzanians”.
He cautioned, however, on the sources of income among leaders now entitled for several allowances. “I advise the government to also consider if the income tax on gratuity should be converted within the line of monthly income tax charged by the Tanzania Revenue Authority (TRA).
He gave the example of MPs, saying that on top of monthly salary, they further get access to sitting allowances, per diem and gratuity. He said the challenge is on the policy and legislation, which begins with the law making body.
Winding-up debate on the 2016/17 budget proposals in the National Assembly on Monday, Finance and Planning Minister Dr Philip Mpango announced that the new income tax measures will also include the Vice-President, Prime Minister and Speaker of the National Assembly.
Others include the Deputy Speaker, Attorney General, Chief Justice, cabinet ministers and their deputies as well as permanent secretaries and Clerk of the National Assembly.
Credit: All Africa