Good morning! The Chanzo is here with a rundown of major news stories reported in Tanzania June 26, 2024.

Parliament approves government budget for the 2024/25 fiscal year

Yesterday, June 26, 2024, the Parliament of Tanzania has  approved the government budget of TZS 49.35 trillion for the 2024/2025 fiscal year.

In concluding the budget discussion government responded to several queries which were raised by member of the public and parlimentarians. Among the issues discussed includes the proposed Sh. 382 levy on the compressed natural gas used on vehicles, traders’ complaints, and local contractors’ participation in government contracts, loans, and government spending.

Speaking about the Sh. 382 levies on gas, a proposal that many MPs complained would hinder the transition to the use of gas. The government committed that people’s proposals on the matter would be taken into account. Government also committed to ensure more of its vehicles are using compressed natural gas.

The government also committed to undertake measures to cut expenditures, especially on purchasing new vehicles, and use the money on development projects including building gas stations in Dodoma and Morogoro.

Explaining how local contractors will benefit from this budget, the Minister of Construction, Innocent Bashungwa, said that in the 2024/2025 fiscal year, 120 kilometers of road have been allocated for local contractors, with 20 kilometers specifically set aside for women local contractors.

Bashungwa elaborated that local contractors have constructed 102 kilometers of roads over the past 11 years, from 2012 to 2023. It was also noted that cumulatively on all construction projects in the country, local contractors receive about 40 percent of the revenues in the sector while working on 96 percent of the project.

To curb some of these issues, in the financial year 2024/25 government has increased the threshold for projects that must go to local contractors from the initial 10 billion to now 50 billion.

The budget was passed with 362 votes out of 381 present in Parliament, there were no votes against it, and 18 abstained.

LHRC says 2024/25 budget fails to address citizen development

While the government states its priority is focusing on an inclusive economy, the Legal and Human Rights Centre (LHRC) has claimed that the 2024/25 budget does not address the needs of the citizens.

Speaking to the press, June 26, 2024, in Dar es Salaam, the Director of Advocacy and Reforms at LHRC, Lawyer Fulgence Massawe, said that the budget is heavily focused on regular government expenditures, which do not impact the ordinary citizen.

“Seventy percent of this budget is allocated for regular expenditures, which do not affect the common citizen. Only 30 percent is directed toward development projects. This indicates that we should not expect significant development or new projects, as our budget is primarily for regular expenditures, including salaries and debts,” he said.

He cited these regular expenditures as including luxury cars and the top officials of the country spending most of their time in Dar es Salaam rather than Dodoma, leading to double expenses for the government.

Additionally, the LHRC went further to point out that there is a need to reconsider the size of the government, citing the example of the Deputy Prime Minister’s position and ministries having a minister, deputy minister, permanent secretary, and deputy permanent secretary.

“There are many ministries, and having all these leaders increases costs. If we look at our budget, it often has a deficit that does not affect regular expenditures but rather development projects,” he said.

Tanzania Traders’ strike expands to nine regions now

The trader’s strike that began on June 24, 2024, at the famous Kariakoo Market in Dar es Salaam, has now spread to nine other regions in the country, including Mbeya, Dodoma, Mwanza, Geita, Njombe, Mtwara, Songwe, Iringa, and Arusha.

The traders highlighted several complaints mostly related to the Tanzania tax system. This situation indicates that the meeting held on June 24, 2024, between the leaders of these traders and the government has not borne fruit, despite the government stating that it has addressed their demands and outlined six agreed-upon points.

Some of the agreements the government stated include that, starting July 1, 2024, the Tanzania Revenue Authority (TRA) will review the new documentation system to ensure that traders receive accurate assessments regarding the receipt and invoice system.

It was also mentioned that the TRA will suspend its operations known as “kamata kamata” (crackdowns) until this procedure is completed to establish a better system for revenue collection, particularly concerning the availability of documentation.

The leaders of the business association had a meeting with the Prime Minister. Addressing some of the concerns raised by traders during the conclusion of the budget discussion, the Minister of Finance, Mwigulu Nchemba said the government is with the traders and that there is no need to argue.

Nchemba explained that the government has already taken into consideration some of the trader’s queries especially those related to operations. He explained on tax cut especially VAT its is not possible due to already set government planning and burden of ongoing projects.

Regulations for 10% loans to be completed by June 30

The government has announced that the preparations for the regulations on the provision of the 10% council loans for youth, women, and people with disabilities will be completed by June 30, 2024. By July 10, 2024, experts will visit each constituency to provide training and education on the issuance of these loans.

This was revealed by the Minister of State, President’s Office, Regional Administration and Local Government (TAMISEMI), Mohamed Mchengerwa, in Parliament in Dodoma, June 26, 2024, while responding to MPs’ contributions regarding the government’s 2024/2025 budget.

“I would like to inform this esteemed Parliament and Tanzanians that by June 30, 2024, the preparations for the loan issuance regulations will be completed, and by July 10, 2024, experts will visit each constituency to provide training and education on the issuance of these loans,” he said.

Mchengerwa said that currently, the government has remaining funds of 307 billion Tanzanian Shillings for these loans, with an expected allocation of 101.5 billion Tanzanian Shillings for the fiscal year 2024/2025.

On April 13, 2023, concluding the budget debate for his office for the fiscal year 2023/24, Prime Minister Kassim Majaliwa announced the suspension of the 10% loans provided by councils until further notice.

This decision stemmed from a report by the Controller and Auditor General (CAG) in the 2021/2022 annual report, citing significant mismanagement in the issuance and repayment of these loans.