Call for Tanzanian election winner to abolish unfair tax anomalies

October 29th, 2010

Christian Aid

LONDON—Christian Aid is calling on the winner of this Sunday’s general election in Tanzania to commit to ending tax anomalies that have deprived a country rich in mineral resources of badly needed revenue that 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.

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.

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 $265.5m from low royalties and lost taxes between 2000 and 2008.

The report, ‘A Golden Opportunity? How Tanzania is failing to benefit from gold mining’ said 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 East Africa country manager, Dereje Alemayehu said: ‘Tanzania 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.

‘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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The Task Force on Financial Integrity and Economic Development addresses inequalities in the global financial system that penalize billions of people, and advocates for improved transparency and accountability.

Christian Aid is a coordinating committee and founding member of the Task Force on Financial Integrity & Economic Development.

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Written by Christian Aid

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