IN what has been described largely as a campaign budget aimed at boosting the fortunes of the ruling Chama Cha Mapinduzi as the country heads towards a multi-party system, Tanzania’s 1992-93 budget presented last month saw the reduction of various taxes, increases in salaries of civil servants and plans to trim the civil service.
Tanzania, once the hallmark of socialism under its first President, Mwalimu Julius Nyerere, has been quietly moving towards a multi-party system. Nyerere was one of the few African leaders to step down from power voluntarily to give a chance to younger men. He has continued to be active in politics though.
Customs, sales and income tax rates were cut by 10 percent. Pension schemes will not be taxed and customs and sales taxes have been lifted on all raw materials bought either locally or from abroad. These include inputs, spares, agricultural machinery, three-tonne Lorries and buses with a capacity of not less than 20 passengers.
Civil servants’ salaries were increased by between 15 percent and 42 percent with the minimum salary being increased from 3 500 shillings to 5 000 shillings a month.
The government also authorised the income tax department to hire private lawyers to chase tax evaders to counter the rampant tax-evasion by businessmen.
It also introduced taxes for those leaving the country with the airport tax being fixed at US$20. Domestic travellers continue to pay 1 000 shillings and sea and river passengers 300 shillings or US$5 for foreigners.
Tanzania has also been all out to attract foreign investors and has appointed a parliamentary committee to facilitate the processing of applications from prospective investors.
And it seems to be winning the fight. Willcroft and Co., a subsidiary of De Beers, has already signed a diamond prospecting and mining agreement. A 30-member delegation from the United States Overseas Private Investment Promotion Corporation signed a US$15 million loan to build a five star hotel in Dar-es-Salam. The money will be loaned to the Sheraton group which is participating in the US$44 million project. The 250 bed hotel is a joint venture between Sheraton, Mansons of Tanzania and a Danish as well as Russian company.
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