TZ parliament okays Tsh 22 Trillion budget, new fuel taxes to kick in

Sada Mkuya, Tanzania's Finance Minister

Saada Mkuya, Tanzania’s Finance Minister

The Tanzanian National Assembly passed the Tsh 22.4 trillion national budget for FY 2015-’16 Tuesday 23, President Jakaya Kikwete’s final budget ahead of the October general election that will chose his successor.

The budget was endorsed by 219 lawmakers, equivalent to 83 per cent of the members of the Parliament.

The new budget means Tanzanians should get ready for tax increment on petroleum products as the government to raise a total of Tsh276 billion for rural electrification.

Finance Minister Saada Mkuya said effective July 1, the new levies will be implemented.

Tabling the budget estimates mid this month Mkuya said the levy for diesel per litre has increased from 50/- to 100/-, petrol from 50/- to 100/- and kerosene from 50 /- to 150/- per litre.

The Minister expounded that the move does not mean to punish Tanzanians but to make them contribute to the country’s development.

She said: “We have been striving to come up with an independent budget, this can only be possible if the people will take part in the development process. We just want 100/- from every fuel user”

The government also will spend the expected revenue from new taxes on fuel to expedite implementation of water projects in rural areas. She said that 90bn/- out of 276bn/- will be directed to water projects.

She cautioned legislators not to politicize the fuel levy issue since it is geared to ensure economic growth from the grass roots level. She noted that it is very difficult to unlock the economic potential in the villages without electricity.

“With reliable power we are going to economically empower the rural population…we can even reduce the rural to urban migration,” Mkuya said adding “the new budget has reduced donor dependency to 6.4 percent”

The minister said that despite 27 percent of MPs opposing the move, the government has resolved to maintain it because its primary objective was also to control oil adulteration which cost the nation 600bn/-.

“This is the government commitment…I want to assure you that no single Shilling shall go in the treasury. The money will only be spent on water and electricity projects.” she stated.

The finance minister indicated however, that Bank of Tanzania (BoT) has taken various measures to control Shilling depreciation one against the US Dollar in the market.

She said that Governor BoT has been releasing US$10 million every week and that until now there is US$400 the million in the market.

“I do welcome the new budget but I think the fuel tax will end up being counterproductive because for instance in public transportation sector, bus or taxi owners will end up raising fares to make up for fuel expenses,” Joseph Kisitu, a Taxi Operator in Dar es Salaam told this website.