News From Parliament

State asked to reduce duty on bottled water

Shadow Minister for Finance, Zitto Kabwe

BOTTLED water should not be subject to regular increases of excise duty because it's not a luxury commodity but a necessity, Parliament was told.

The Vice-Chairperson of the Parliamentary Finance and Economic Affairs Committee, Dunstan Kitandula (Mkinga CCM) and Shadow Minister for Finance, Zitto Kabwe (Kigoma North Chadema) advised the government to widen the tax base by identifying other sources of revenue.

"The government came up with a good policy of providing people with clean and safe water. But in recent days this policy seems to be ignored by the government starting with its 2010/11 budget," said Mr Kitandula.

He argued that last year, the government seems to consider bottled water a luxury by introducing excise duty which should not have been the case as industries are delivering on government policy of providing clean water to all people.

"Since 2010, the government started charging excise duty on bottled water by introducing a 12/- per litre charge. In 2011/12, this exercise duty increased from 12/- to 69/- per litre," argued Kitandula who questioned the government's sincerity in implementing its water policy.

The Mkinga lawmaker said the committee expected that the government would waive duty on the precious liquid but instead Dr Mgimwa's budget is proposing an increase to 83/- per litre. In his 2012/13 budget proposals, Mr Kabwe said instead of burdening the common man by imposing duty on necessities, treasury should address the problem of exemptions which are choking public coffers.

"The opposition believes that the Tanzania Revenue Authority (TRA) has capacity to collect 1trn/- per month in revenue if exemptions are significantly reduced," he said. Wawi lawmaker (CUF), Hamad Rashid Mohamed suggested that the government should start taxing foreign trawlers catching various fish species including tuna in our territorial waters on the Indian Ocean.

"We have more than 50 foreign trawlers licensed to operate within our territorial waters but unfortunately we simply license them," Mohamed said. The Minister for Finance and Economic Affairs, Dr William Mgimwa, said that during the 2012/13 financial year they expect to collect over 8.07trn/- in taxes and 124.42trn/- in non tax revenues.

Dr Mgimwa requested the House to endorse over 725.57bn/- of which 2.5bn/- is for recurrent expenditure while 723.06bn/- is for other uses including development projects. Parliament later endorsed the budget.