EDITORIAL: Budget gives fresh impetus to industries

The 2018/19 budget tabled in Parliament on Thursday was heavy on taxation measures geared towards stimulating local industry. Finance minister Philip Mpango spelt out new taxes on imports in a raft of measure aimed at removing barriers that could hinder the vision for a semi-industrialised economy in the medium term.

One would argue that unlike the last two budgets, this one contained clear imprints that suggest the much-touted industrialisation drive may begin in earnest. Providing production incentives to local manufacturers in the pharmaceutical, leather, livestock and edible oil sub-sectors would provide the necessary impetus to nurture the nascent industries.

Lowering corporate income tax for new investors in these sectors from 30 per cent to 20 per cent is another positive attempt at stimulating industrial growth, even if the target is narrower that would be expected. Before the budget was read, we argued here that the government should match its industrialisation mantra with concrete budgetary and administrative actions.

Prioritising agriculture as a key plank in the industrialisation goal is long overdue and the plan to give the vital sector the support it so much lacked over the years may yield both quick results in unlocking Tanzania’s potential to semi-industrialise while tackling the twin problem of poverty and unemployment.

But with all the good measures announced on Thursday, the question that begs the answer is whether the government will walk the talk in rolling out the huge budget against evidence that it has struggled to raise the requisite revenue.

This year’s budget of Sh32.48 trillion is higher than that of the previous year which was Sh31.7 trillion. But the government has so far fallen behind the revenue target for the 2017/18 financial year by nearly Sh10 trillion, Sh2 trillion shot of what it plans to spend in the new budget for development.