Tanzania: List of Best Taxpayers Ignites Debate

Dar Es Salaam — Debate has ensued over Prime Minister Mizengo Pinda's revelation of a list of best taxpayers in Tanzania,with analysts expressing surprise over a poor showing by popular companies and others missing from the list. The debate attracted the attention of the immediate former East Africa Community (EAC) secretary general, Mr Juma Mwapachu, who wanted people to have a wider perception when debating contributions by investors to the economy through taxation and other means.

Winding up the just-ended parliamentary session on Friday, Mr Pinda mentioned 15 companies as being the best taxpayers in the country for the past five years.
The companies included Tanzania Breweries Ltd which paid taxes amounting to Sh165.4 billion between 2005 and 2011, the National Microfinance Bank (NMB) which paid Sh108.6 billion during the same period and Tanzania Cigarette Company (TCC) which brought some Sh92.1 billion into state coffers during the same period.
The list and the amounts paid in brackets also included the National Bank of Commerce (Sh89.9 billion), CRDB Bank Ltd (Sh79.2 billion), Tanzania Ports Authority (Sh76.8 billion), Tanzania Portland Cement (Sh73.4 billion) and Airtel (Tanzania) Ltd. (Sh63.6 billion).
Others are Tanga Cement Company Ltd. (Sh43.6 billion), Standard Chartered Bank Ltd (Sh40 billion), Citibank (T) Ltd (Sh35.7 billion), Resolute (T) Ltd. (Sh32.1 billion), Tanzania International Container Terminal Services (Sh25.9 billion), Tanzania Distillers Ltd. (Sh13.4 billion) and Group Five International (PTY) Ltd. (Sh9.5billion).
But reacting to the PM's statement, the chairman of the Parliamentary Public Organisations Accounts Committee (Poac), Mr Zitto Kabwe ignited the debate by wondering why the list left out such household names as Mohammed Enterprises Limited (MeTL), Bakhresa and IPP.
In a widely circulated electronic mail discussion, Mr Kabwe also wondered why the list (which is dominated by banks) includes only Resolute (T) Ltd which is the smallest mining firm in the country and left out such mining giants as Barrick and AngloGold Ashanti.
Mr Kabwe, who doubles as deputy leader of the official opposition bench in the National Assembly also wondered why the list contained only one telecommunication firm, Airtel, which is the second in terms of market share and leaves out Vodacom which controls about 40 per cent of the highly competed market of seven players.
Reacting to Mr Kabwe's sentiments, Mr Mwapachu said it was imperative that Tanzanians looked at the contributions of the investors to the country's economy with a wider viewpoint.
"The fiscal regime should be looked at broadly, bearing in mind other benefits accruing from particular investments and/or in particular sectors these seem to be undertaken on a case by case basis rather than on the basis of policy that is predictable and relatively stable," he said.
He said Mr Pinda chose tax being just one of a number of factors that a person may consider in determining corporate contribution to an economy, noting however that the other factors which the PM did not mention are also equally important to the well being of a country's economy.
He criticized Mr Kabwe's assumption saying the corporation mentioned by the PM as good taxpayers were of a different cluster from those that the opposition politician was questioning for being absent from the list.
"Please also consider the fact that consumption taxes contribute more to the Exchequer that corporate taxes. Mining companies contribute significantly to VAT; so do METL and Azam. I think a more elaborate exercise is needed in determining the contribution of different clusters of industries to the national economy; corporate taxes alone is insufficient criterion," he said.

Another commentator based in the US, M. M. Mwanakijiji, noted that in addition to looking at tax collections, attention should also be focused on the expenditure side.
"How far are we sure that if people pay taxes the money will be put into good use?" he asked.
He also said for people to be assured that their taxes were well spent, there was a need to put in place geed mechanism to manage public expenditure systems.
Mr Mwanakijiji further said there was a needed for political parties to put in place and reveal to wananchi their tax management policies.
"What the political parties believe in tax management? Does tax management in their ideology?" he asked noting that taxation was one of aspects which differentiate political parties across the world.