New Treasury policy faulted

Dar es Salaam. The head of Good Financial Governance at the German Embassy in Tanzania, Dr Annette Mummert, has said the newly established Treasury Single Account (TSA) has started on the wrong footing, explaining that it ought to have been backed by enough preparations in terms of sound legal frameworks and a financial management system.

Speaking during a Policy Forum event organised in the city yesterday, Dr Mummert said TSA was also practised in Germany and the UK but with good financial reporting to ensure that what was budgeted was executed and there was no discrepancy between what was collected and spent.

“Experience in Tanzania has shown that there is discrepancy between what is budgeted and what is executed. The collected revenues also do not match with what was budgeted,” she said.

She recommended putting in place a sound legal framework to ensure that such discrepancies did not happen.

According to her, in Germany there was a sound legal framework that ensured the TSA guaranteed allocation of financial resources through signed contracts among the institutions, including local governments. “The signed contracts for allocation of funds in accordance with the budget ensure that there is a high level of transparency,” she said.

The TSA might increase unpredictability of the budget for local governments in view of current unsatisfactory remittance of centrally collected revenues and fiscal transfer practices by the central government, according to her.

A number of stakeholders, who participated in the forum expressed similar views, emphasising that without adequate transparency in the financial system, the TSA would end up marginalising the local governments further.

They were contributing to a dialogue titled: “Central-local government Relations in Property Tax Collection in Tanzania.”

One of them, Dr Mukama Manyama, a lecturer at the University of Dar es Salaam’s department of Zoology and Wildlife Management, said for the TSA to improve financial governance it must be supported by an efficient reporting system.

“For example, the role of Parliament in ensuring good financial reporting system is disappearing,” lamented Dr Manyama.

An independent Lawyer, Mr Dony Shasha said that there were two important issues that are necessary in order to improve financial governance, including the need for sharing of information and resources between central and local governments.

When presenting the government budget for 2018/19 in the third week of this month, the minister for Finance and Planning Dr Phillip Mpango also pointed out the introduction of the TSA in order to ensure efficient Financial Management System.

However, some legislators opposed such move, saying that it will further restrict local government to access enough funds for development projects.