Tanzanian government says addressing traders’ concerns, warns of potential revenue losses
Vendors plying their wares, one shop open while others are closed in Kariakoo on June 27 as the traders' strike enters its third day. The government says it is working on traders' concerns. PHOTO | MICHAEL MATEMANGA
What you need to know:
- The strike has spread to other regions, specifically Mbeya and Mwanza, resulting in sudden price increases for consumer goods due to the continued closure of more shops
Dar es Salaam. The government has said it is addressing traders’ concerns over taxes.
However, accommodating all of the issues immediately could significantly impact the execution of certain national development projects, the Finance Minister, Dr Mwigulu Nchemba, told legislators in Parliament on Wednesday, June 26.
The government's statement comes at a time when the traders’ strike entered its third day on June 26.
Dr Nchemba cited one of the traders’ demands for a reduction of the Value Added Tax (VAT) from 18 to 12 percent, noting that accommodating it would result in a revenue shortfall of Sh600 billion, thereby affecting the execution of ongoing mega projects.
“We have had a good conversation with the trader’s representatives. The government appreciates their readiness to engage in talks, and we will continue to listen to them. Not accepting some of their demands doesn’t mean we ignore their concerns,” he insisted.
He noted that the government would need to find alternatives before acceding to all the demands.
He said that should the government decide to remove the service levies as suggested by the traders, it will affect the performance of the district and town councils because they depend on the income from the levy.
"The government values the private sector for its role in driving the economy, and therefore, there is no reason for us to be at odds when we share common goals and understanding. This strike is hindering our national progress and individual livelihoods. We urge traders to resume their businesses as usual," he said.
He said the government has agreed to address the traders' concerns incrementally, noting that while some issues remain unresolved, there has been extensive engagement on the matter.
Traders are advocating for the government to consolidate all taxes into a single collection system, and they are also calling for a reduction in fines imposed on them for violations, aligning them with penalties similar to those for traffic offences.
They also argue that issuing receipts should not be treated as an additional tax, as they perceive it as a form of unnecessary harassment.
They are urging the TRA to cease the practice of seizing their goods and to accept financial statements prepared by registered accounting professionals.
Dr Nchemba stated yesterday that the government is addressing these concerns but requires time to identify alternative revenue sources to offset the budget gap that would arise from the removal or reduction of some taxes as proposed by the traders.
In another development, the chairman of the Kariakoo Traders Association, Mr Martin Mbwana, has left the decision to open or close shops to the traders themselves after providing them with feedback on the discussions held in the meeting between the leaders and the government.
“The businesses are theirs, and decisions to close or open should not be interfered with by anyone. The government's job is to create a good environment to collect taxes,” he noted yesterday at a public meeting with traders.
Mr Mbwana stated that he does not have the authority to force shop owners to open their businesses and that continuing to keep their shops closed is detrimental to the health of their businesses and the overall well-being of the country.
In Kariakoo on Wednesday, June 26, a mixed response was observed as some shops started to reopen while others remained shut for the third consecutive day.
Some business owners expressed discontent with government negotiations, noting that the explanations provided did not adequately address their most pressing concerns.
Counting losses
As the strike entered its third day yesterday, service providers in the Kariakoo area—including porters, food vendors, mobile money services, and transporters—were facing significant losses due to reduced business activity.
The spokesperson for the lorry drivers association, Mr James Haule, said during the past three days, the volume of goods they transported has gone down tremendously.
"Since Monday, we have been arriving here without any cargo because we depend on the shops to supply us with goods for transportation," he said.
A food vendor, Ms. Hadija Nyinge, described the impact of the strike on her income, stating, "On Monday, unaware of the strike, I brought food and waited until 4 PM before eventually taking it back home, resulting in a loss."
Meanwhile, shopkeepers in several key markets in Mbeya and Mwanza also remained closed on June 26.
In Mbeya, the impact of the strike started to directly affect citizens who bore the brunt of rising prices of various products, particularly stationery.
Ezra Mdamu, a resident of Mbeya, said while a normal exercise book used to cost Sh500, it has since gone up to Sh700, while a pair of school boys’ socks has risen from Sh1,000 to Sh2,000.
The chairman of the Mwanjelwa Market Traders’ Association, Aisea Mwandondwa, said the situation could persist pending the ongoing discussions between their leaders and the government.
