Tax-exempt firms face audit

The Parliamentary Public Accounts Committee (PAC) will consider including tax- exempted companies in the list of areas due for auditing in the Finance Bill, the Committee Chairman, Mr Zitto Kabwe has said.

POAC Chairman, Mr Zitto Kabwe (Kigoma North-CHADEMA)

Speaking during the seminar for members of the committee and Civil Society Organisations (CSOs) on opportunities and challenges for increasing government revenue, Mr Zitto noted that there is need for such exemptions to be audited by the Controller and Auditor General (CAG).

Mr Zitto, who is also Kigoma North MP (Chadema), said the decision was reached after it was found out that there was no transparency in the system and formula used by the government in granting tax exemptions to various companies.

He said the PAC has already shared the matter with the Minister for Finance with whom they agreed to move on, adding that the office of the CAG was aware of the new move.

The PAC chairman added that the committee held talks with the Minister for Finance, Dr William Mgimwa and the CAG, Mr Ludovick Utouh, on the implementation of the matter. Mr Zitto added that the CAG office was already prepared to start the auditing of the reports soon after approving the section into the financial law.

“There is a big weakness behind the tax exemption system; the country is losing a lot of revenue under the pretext of tax exemption, “said Mr Zitto. Earlier, the Director of Citizen Parliament Watch, Mr Marcossy Albanie, told MPs that the government could collect more than 7 tril/- if it will be able to control and make good use of all opportunities.

He said Dar es Salaam Port alone could contribute not less than 2.8 tril/- as government revenue annually. According to Mr Albanie, tax exemption should not exceed five per cent of government revenue and one per cent of Gross Domestic Product (GDP).

Some MPS said there was a need for the government to come up with a new strategy to increase the collection of revenues and that both CSOs and MPs have the responsibility to advise and support the government to reach that goal.

Ms Felister Bura (Special Seats -CCM) said the government must take appropriate measures to increase revenue through Dar es Salaam Port.

Source Tanzania Daily News

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