Tanzania: Government to slash income tax

BY GADIOSA LAMTEY.

The government yesterday relieved workers of the heavy burden of income taxes (PAYE) by announcing a cut in the coming financial year.

Addressing workers yesterday at the Sokoine Stadium in Mbeya to mark the International Labour Day, President Jakaya Kikwete said that his government has responded to workers’ longstanding demands on increasing the minimum wage and reducing the Pay-As-You-Earn tax on employees’ salaries.

He told thousands of workers that the government has since 2007/2008 been making efforts to reduce income taxes, which dropped from 18 percent to 15 percent, and 14 percent in 2010/2011.

“We discussed the matter with workers’ representatives and agreed that the government will continue working on it. The income tax reduction will be announced by the Minister for Finance when tabling budget estimates for the coming financial year,” Kikwete told the jubilant workers who jammed the Sokoine Stadium.

He assured his audience that the government would continue reducing income tax to lessen the burden on workers and to enable them meet their basic needs.

On minimum wages, he said, in the past the government increased it from 65,000/- to the present 171,000/-. The amount is also subject to increase in the forthcoming fiscal year, he said.

“The increment has been possible because of improved revenue collection from 541bn/- last year to 637bn/- this year, equivalent to 18 percent,” Kikwete said.

In the coming financial year, the President said workers’ salaries would mainly come from domestic revenue.

“The government has good intentions of improving workers’ salaries. Failure to meet this demand shouldn’t be considered as neglect of workers’ rights,” he said, attracting cheers from workers of all cadres.

Minister for Labour and Employment Gaudensia Kabaka, said the government will announce the minimum wage for the private sector in the middle of this month after consultations with employers and relevant authorities.

She said the government has introduced a fund to compensate workers who will be injured at workplaces.

The compensation has been raised from 180,000/- to 1m/-, she said.

Speaking at the same venue, Trade Union Congress of Tanzania (TUCTA) Secretary General Nicholas Mgaya informed the President about the existing fear among workers regarding the precarious financial position of the state-run Public Service Pensions Fund (PSPF).

He said the situation has demoralised the Fund’s members fearing that they would lose their money.

Already, the government has promised to inject 50bn/- to revitalise PSPF’s activities.

International Labour Organization (ILO) Country Director Alexio Musindo thanked TUCTA for spearheading the fight for workers’ rights.

Tabling her budget estimates for the next financial year in Parliament last month, Minister of State in the President's Office (Public Service Management), Celina Kombani, said that the government has scaled-up budget allocation for its employees from 3.781trn/- in 2012/2013 to 4.763trn/- in 2013/2014.

She said that the increase is equivalent to 26 percent (982bn/-) compared to 3.781trn/- allocated in the previous year. 

SOURCE: THE GUARDIAN (02/05/2013): http://www.ippmedia.com/frontend/index.php?l=54208