ACT Wazalendo advises government to reduce commercial borrowing
Dar es Salaam. Reducing commercial borrowing, reviving the cashew development fund and scrapping the mobile transaction tax are some of the recommendations of the ACT Wazalendo party which released its analysis of the national budget for 2022/23 yesterday. .
ACT Wazalendo financial sector spokesman Emanuel Mvula urged the state to reduce commercial borrowing as part of measures to contain spiraling national debt.
“Commercial loans represent 32.8% of total external debt. We want the government to reduce the ratio of commercial loans to national debt to 20%. The government should also consider converting these loans into concessional loans,” he said.
According to Finance and Planning Minister Mwigulu Nchemba, who presented the budget to Parliament on Tuesday, the public debt was 69.44 trillion shillings in April this year, an increase of 14.4%.
Mr Mvula urged the government to restore 100% cashew export tax for farmers as it was before the government amended the law in 2018.
“The government has proposed that 50% of the export tax should go to the central government’s consolidated fund and another 50% to finance farmers’ inputs. But we strongly oppose this proposal because it will not help farmers,” he said.
Mvula also advised the government to scrap taxes on mobile money transactions introduced last year, citing the tax measure as a burden on ordinary citizens and failing to meet government expectations.
“ACT Wazalendo wants the government to remove these levies on mobile money transactions. The government has collected 261 billion shillings of the 1 trillion shillings earmarked for mobile money transactions, which is only 25% of the target,” he said.
Mvula also lamented the low budget allocated to development spending, which “also focused on making things easier rather than developing people.”
“The level of the development budget that is going to serve the people is only 6.2 trillion shillings which is equivalent to 14.9% of the total budget. So our budget is still very much about things and about paying down debts rather than boosting citizen development,” he said.
Party leader Zitto Kabwe has stressed the need for the Minister of Finance and Planning to explain the controversy over the tax that is planned to be imposed on any citizen over the age of 18.