Minister of State President’s Office Finance and Planning Zanzibar Presents the Budget of the Revolutionary Government of Zanzibar for the Financial Year 2021/2022.
- Jun 16, 2021
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The first budget of the Government of President Dr. Hussein Ali Mwinyi will no doubt inflict pain on land lords who will have to pay an annual proposed property tax ranging between Sh10,000 and Sh50,000 with effect from July this year.
This is the first time since the January 12, 1964 revolution that the government imposes such tax intended to stabilize the Zanzibar's economy plagued by various problems, including the Covid-19 outbreak.
Tabling the government budget for the 2021/2022 fiscal years to the House, the Minister of State, President's Office, Finance and Planning, Jamal Kassim Ali, said the Zanzibar Revenue Board (ZRB) will collect the new tax after the completion of property information collection system and the related tax rates.
According to the proposal a Sh10,000 tax will be charged for an ordinary building while owners with stored buildings will have to pay Sh50,000 per a storey.
On Mainland Tanzania, property taxes are charged when one purchases electricity.
Despite property tax pain, there is relief for citizens after the government had waived taxes on cooking oil, sugar and construction materials.
“To bring relief to the people and enhance social welfare, the government proposes to amend the 1998 VAT Act No. 4 to remove tax on cooking oil, sugar, roof tiles, iron bars and cement,” the Minister said.
The Minister told the House the government will introduce an electronic tax collection system, ‘ZanMalipo’ to collect all tax and non-tax revenue.
"The system will reduce loopholes on revenue loss and collection and keep transparency in the payment of government goods and services,” he said, adding the move was expected to increase government revenue by Sh7.5 billion.
Closing taxpayers bank accounts
The Minister said the government shall amend the tax administration act No. 7 of 2009 to avert the ZRB from arbitrarily closing taxpayer bank accounts and businesses without the written consent of the Commissioner.
The Minister said the government will impose severe penalties on tax-exempt beneficiaries who abuse the exemption by paying exempt taxes, paying a 50 percent tax due and will be barred from future exemptions.
Issuance of receipt
He added the government has also proposed a penalty of Sh2 million for each transaction made without issuance of a receipt.
To control marine pollution caused by oil spills during unloading, the Minister said the government will introduce tariffs on oil ships.
According to the Minister, during the next financial year, a total of Sh1.84 billion is expected to be collected where Sh1.82 billion will be collected by the central government while Sh15.7 billion will be collected by the local government authorities.
He said the government expects to borrow Sh312 billion from inside and outside sources which is 16.9 percent of the total budget estimates for the implementation of development projects.
The Minister said the government spending on recurrent activities is expected to reach Sh947.2 billion equivalents to 51.3 percent while Sh882.8 billion will be directed to development projects.
The Minister said government's priorities during the financial year include construction of Pemba airport, construction of Mangapwani and Mkoani ports, purchase of four fishing boats and improvement of water infrastructure funded by the Ras el Khaimah government.
Other priorities are solar and gas power production, rehabilitation and strengthening of the water supply system, construction of the Kibweni shipyard, the construction of a Binguni Referral Hospital, the construction of Wete Hospital and the development of education infrastructure.
Source: Zanzibar Mail