Switch to gas to slash fuel bill, government urged

Dar es Salaam. Parliament’s Budget Committee wants all government vehicles to be converted to use compressed natural gas as part of efforts to cut massive spending on fuel.

The advice comes at a time when fuel prices are rising due to disruptions in the global supply chain, fuelled by Western nations’ sanctions on key producer Russia in response to its invasion of Ukraine.

Locally, Dar es Salaam residents are currently paying Sh2,994 and Sh3,131 for a litre of petrol and diesel respectively. The current prices for petrol are, however, Sh745, or 33 percent, more than they were in June last year when a litre fetched Sh2,249. They are also Sh1,058, or 51 percent, higher than they were in June 2021 when a litre of diesel fetched Sh2,073.

Presenting the Sh41.48 trillion Budget for the financial year 2022/23, the Finance and Planning Minister, Dr Mwigulu Nchemba outlined a number of cost-cutting measures that the government seeks to undertake during the coming year.

And responding to the Budget yesterday, the Budget Committee said by converting government vehicles to the use of natural gas, the government will see the resource [natural gas] being put to effective use before it become obsolete as the world was increasingly shifting to other renewable resources.

“The committee recommends that all government vehicles be converted to use natural gas just like the way it is for trucks operated by Dangote Cement. This will reduce importation of petroleum products and improve the country’s balance of payment,” the committee said.

Mr Shamsi Vuai Nahodha (Nominated-CCM) shared similar sentiments, noting that the Mtwara-Dar es Salaam natural gas pipeline was under-utilised at less than 10 percent of its capacity, suggesting maximising utilisation in order to reduce dependence on oil imports that adversely affect the lives of citizens.

“We should build the natural gas economy through increased use in transport and transportation and accelerating commencement of the Liquefied Natural Gas (LNG) project in Lindi,” he said.

In its views, the Budget Committee also wants the government to undertake a re-evaluation of its Double Taxation Agreements with Canada, Denmark, Finland, Italy, Norway, Sweden, India, South Africa and Zambia in a deliberate move to align the agreements with Tanzania’s current development needs and ensure that they [the agreements] do not leave loopholes for tax evasion.

“Though these treaties are beneficial to the country, the challenge we see is that they could be used as conduits for tax evasion whereby a businessman or an investor may use them in an attempt to access indirectly the benefits of a tax agreement between two jurisdictions without being a resident of one of those jurisdictions (treaty shopping), said the committee’s chairman, Mr Daniel Sillo.

The Committee is also advising the government to make necessary amendments to the law that formed the Tanzania Shipping Agencies Corporation (Tasac) with a view to streamlining the agency’s tasks so that it does not get into a conflict of interest with clearing and forwarding agencies.

As things stand, Tasac, which is a regulator for marine transportation, also engages in activities of clearing and forwarding thereby creating a public outcry from private operators. “We need to amend the law to limit Tasac’s clearing and forwarding role to only sensitive cargo of the government, including arms, government documents, minerals and mining equipment. Issues pertaining to clearing and forwarding must remain a preserve of the private sector, he said.

It is the view of the committee that the government will issue a tax amnesty to companies in the tourism sector after their operations were adversely affected by the Covid-19 pandemic during the period between 2019 and 2020.

The Committee believes that if the government makes a critical analysis of the buildings that have been built across the country’s major urban centres, it could potentially collect up to Sh100 billion per year in property tax.

Some MPs like Mr Jerry Silaa (Ukonga-CCM), said the government is a business partner contributing no capital in businesses, urging that it should prepare friendly tax procedures, educate taxpayers and stop fighting with the businesspeople.

“Small scale businesses tax regime has been given a 3.5 percent turnover which is not a small amount. These are those with Sh500,000 to one million capital, hence telling them to buy Electronic Fiscal Device (EFD) machines spending Sh500,000 could be hardly executed,” he said.

“When is the government going to see that it is its responsibility to provide EFD machines to traders for free in order to enable the country to make tax records that will ultimately benefit the government,” he added.

According to him, putting the two percent withholding tax to small scale miners will increase the 6.1 percent royalties and inspections fees to eight percent, something that will increase smuggling and benefit some of the smuggling destination countries.

But Ms Zulfa Mmaka Omar (Special Seats-CCM) commended the government for scrapping the 40 percent tax chargeable for procurement of EFD machines.

“This has been the center of complaints among traders who will now be encouraged to purchase and use machines for strengthening their businesses,” she said.

Mr Twaha Mpembenwe (Kibiti-CCM) said Ngorongoro residents are fellow citizens who shouldn’t live in troubles as the government is determined to amicably address their concerns.

“A similar controversy was staged by a neighbouring country between 1977 and 1978 in its efforts to grab our land. Without mentioning the country’s name, I would like to warn neighboring countries trying to interfere with Tanzania’s internal affairs to stop doing that with immediate effect,” he said.

“Tanzania is capable of resolving its internal affairs without assistance from any country. Social media reports say there are demonstrations to protest undertaken efforts in the area that are being planned in a certain country. This should serve as a wake-up call that this is an economic war, therefore, we are supposed to increase solidarity among our officers and citizens present in the Ngorongoro area,” he said.