Tanzania urged to tackle tax anomalies after election

By staff writers
November 1, 2010

The international UK-based development NGO Christian Aid has called on the winner of the general election in Tanzania to end tax anomalies that have deprived a country rich in mineral resources of badly needed revenue.

The agency emphasised that the money involved could have been spent on schools, hospitals and other infrastructure improvements.

With two former government ministers and a permanent secretary currently facing corruption allegations in court, tackling financial malfeasance has emerged as a major election issue in the East African country.

A recent index drawn up by the Revenue Watch Institute put Tanzania near the bottom of a global list in terms of the transparency of its mining and minerals deals – with only a few countries such as the Democratic Republic of Congo and Equatorial Guinea having a lower score.

In addition, a recent report commissioned by Christian Aid and a number of Tanzanian organisations estimated that the country was deprived of revenue from gold mining companies amounting to at least US$265.5 million from low royalties and lost taxes between 2000 and 2008.

The report, A Golden Opportunity? How Tanzania is failing to benefit from gold mining, pointed out that gold mining was the fastest growing sector of Tanzania’s economy, yet ordinary Tanzanians were not benefiting from the boom due to excessively low royalty rates and government corporation tax concessions.

The Tanzanian press has alleged that some companies are guilty of tax evasion.

Christian Aid's East Africa country manager, Dereje Alemayehu commented: "Tanzania [is] one of the few African countries without internal conflicts, but the ruling elite are not in a position to make effective use of this political capital to lead the country out of poverty because it has allowed the leakage of valuable resources from the country by complicity or through ineffectiveness."

Alemayehu continued: "If this election is not going to be yet another contest between factions of the ruling elite over the spoils of the state, the new government must at least enhance domestic resource mobilisation by reducing tax expenditure, discarding a tax policy which provides huge exemptions for the wealthy and entails extorting from the poor, as well as being vigilant against tax evasion and aggressive tax avoidance."

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