TANZANIA
is losing a staggering Sh7trillion annually from its numerous revenue
resources, a newly launched report by the Interfaith Standing Committee
on Economic Justice and Integrity of Creation (ISCEJIC) has revealed.
Titled ‘The one-billion dollar question: How much Tanzania is losing in tax revenue,’ the report says that around $1.83bn (Sh4.09trillion) annually is lost from tax incentives, illicit capital flight , failure to tax the informal sector and other forms of tax evasion.
It also points out that a sum of $41.3bn (Sh 2.9 trillion) was being lost in corruption through financial budgets by diverting resources away from critical public services.
The report which was launched in Dodoma yesterday also points out that the new estimates made in the one-billion-dollar question shows that at least $300m (Sh670bn) was being lost through investment incentives and tax exemptions annually.The report’s launching was attended by various members of Parliament including members of the Public Accounts Committee (PAC).
Prof Honest Ngowi from Mzumbe University, who participated in the study, said that a total of $464m (Sh1trillion) was lost from trade mis-invoicing, $4761m (Sh. 1.7 trillion) from the informal sector and over $250m (Sh559bn) from tax evasion, under-valuation of imports, fake imports and untaxed forest revenues.
Additionally, the government was losing at least $57m (Sh127bn) through the mining sector, according to estimates from unpaid taxes unveiled by government audits.
“Corruption in the budget is 20 per cent of the expenditure lost to corruption $1.3bn (Sh.2.9 trillion),” Prof Ngowi said.According to the report, the don also noted that in the 2015/16 financial year the report discovered that at least 16 government organizations were exempted Sh28bn, donor-funded projects were exempted Sh70bn, religious institution Sh0.8bn, and parastatal bodies Sh. 8bn.
The government loses $300m from tax exemptions, illicit trade $ 464m, tax evasion in the informal sector $761 and mining $57m.
The researcher said that the ‘One-billion-dollar question report’ made a number of recommendations to the government on tax incentives and tax transparency.
On incentives, the report states that the government was taking steps to reduce these, notably through the VAT Act, but points out that the steps taken so far were not enough.
The don recommended that the government should ensure that sectors such as agriculture, trade, mining and construction contributed more and fairly to tax kitty.
Earlier, chairman of the Committee Bishop Stephen Munga explained that the research was a continuation of a previous report done in 2012.
He said the purpose of the present report was three-fold: To assess how much revenue Tanzania continued to unnecessary lose from the same sources; how the government was going to halt these revenue losses, and the extent to which the government was implementing recommendations made in the two previous reports.
Titled ‘The one-billion dollar question: How much Tanzania is losing in tax revenue,’ the report says that around $1.83bn (Sh4.09trillion) annually is lost from tax incentives, illicit capital flight , failure to tax the informal sector and other forms of tax evasion.
It also points out that a sum of $41.3bn (Sh 2.9 trillion) was being lost in corruption through financial budgets by diverting resources away from critical public services.
The report which was launched in Dodoma yesterday also points out that the new estimates made in the one-billion-dollar question shows that at least $300m (Sh670bn) was being lost through investment incentives and tax exemptions annually.The report’s launching was attended by various members of Parliament including members of the Public Accounts Committee (PAC).
Prof Honest Ngowi from Mzumbe University, who participated in the study, said that a total of $464m (Sh1trillion) was lost from trade mis-invoicing, $4761m (Sh. 1.7 trillion) from the informal sector and over $250m (Sh559bn) from tax evasion, under-valuation of imports, fake imports and untaxed forest revenues.
Additionally, the government was losing at least $57m (Sh127bn) through the mining sector, according to estimates from unpaid taxes unveiled by government audits.
“Corruption in the budget is 20 per cent of the expenditure lost to corruption $1.3bn (Sh.2.9 trillion),” Prof Ngowi said.According to the report, the don also noted that in the 2015/16 financial year the report discovered that at least 16 government organizations were exempted Sh28bn, donor-funded projects were exempted Sh70bn, religious institution Sh0.8bn, and parastatal bodies Sh. 8bn.
The government loses $300m from tax exemptions, illicit trade $ 464m, tax evasion in the informal sector $761 and mining $57m.
The researcher said that the ‘One-billion-dollar question report’ made a number of recommendations to the government on tax incentives and tax transparency.
On incentives, the report states that the government was taking steps to reduce these, notably through the VAT Act, but points out that the steps taken so far were not enough.
The don recommended that the government should ensure that sectors such as agriculture, trade, mining and construction contributed more and fairly to tax kitty.
Earlier, chairman of the Committee Bishop Stephen Munga explained that the research was a continuation of a previous report done in 2012.
He said the purpose of the present report was three-fold: To assess how much revenue Tanzania continued to unnecessary lose from the same sources; how the government was going to halt these revenue losses, and the extent to which the government was implementing recommendations made in the two previous reports.
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