Tanzanian President John Magufuli, has received $455.8 million (Tsh1.05 Trillion) as the governments dividend and revenue share from 79 entities that the government holds stake in.
According to the president, Tanzania’s government has invested over $25 billion in 266 entities in Tanzania.
The divided and revenue share handing was executed in the capital city-Dodoma witnessed by various several-top government officials and private sector influential actors including, the Ministry of Finance and Planning and financial institutions chiefs.
The government’s dividend and revenue shares offered which rose from over $293 million in the 2016/2017 financial year, $365.5 million in 2017/2018 to over $455.8 million in the 2018/2019 financial year and sadly, the contribution has been dominated by a fraction of entities, as 187 out of 266 entities supposed to hand their contributions did not execute their fair contribution, due to operating under loss.
The top three contributors were Tanzania Ports Authority with over $73 million, Gaming Board of Tanzania with around $41 million and Tanzania Communications Regulatory Authority (TCRA) with over $36 million.
In the eyes of the fifth Tanzanian government, tax collection is at the pivotal stage of development as the government of Tanzania, utilizes almost 40 per cent of the tax collected to fuel its development projects.
“The 1.05 ($455.8 million) trillion will assist in development projects and our budget allocates 40 per cent of the collected revenue to development projects” President commented.
Meanwhile, the Office of the Treasury Registrar (OTR) commented on the ongoing crackdown of incompetent entities (by taking over farms and companies resources) and enhancement of collection, whereby—the Treasury Registrar, Mr. Athumani Mbuttuka cited various steps taken by his office including increasing the government’s stake in Airtel Tanzania (one of the largest telecoms company in Tanzania) to 49 per cent and 85 per cent to UDART (Dar es Salaam Bus Rapid Transit).
Further, the Mbuttuka cited 40 out of 80 business companies that have aired out to operate under loss, but also—over the past five years, his office has managed to oversee, 15 entities being dismantled to 6 and one entity formed to companies.
According to Mbuttuka, the action to merge and disentangle various entities was necessary to increase efficiency, save public resources and embrace a customized manner of corporate management championed by Magufuli leadership.
On the other side of the mark, President Magufuli had no mercy to 187 entities failing to deliver their contributions.
“The good-time is over for the rest of 187. They should also do so in the next 60 days.” President Magufuli insisted.
The East African nation of more than 55 million people, with the Gross Domestic Product (GDP) of 7.2 (per National Bureau of Statistics second-quarter highlights), has over 3 million taxpayers, but has collected over $ 824.8 million in the fiscal year 2019/2020 (52 per cent of the $1.4 billion target).
The President stressed his concerns on the trend of the rest 187 entities, in relation to their fair contribution in propelling the country’s development efforts, hence—suggested strict repercussions upon failure to deliver their dividend and revenuer share within 60 days, including sacking and dissolution of companies’ boards.
“Our money is wasted over there. It does not matter if the government has a 5 per cent stake, the dividend must be paid” President Magufuli commented.
However, despite various actions executed by ministries and agencies, still, the government finds the tax collection pace rather unsatisfying. Per President Magufuli’s speech, Tanzania planned to collect $694.6 million in 2017/2018 but ended up with $607.7 million, while—in 2018/2019 over $781 million was scheduled for collection but only around $ 651 million was garnered.
Also read: Tanzania’s gaming industry tax revenue soars