The 2024/25 Budget will spur growth, say manufacturers

Dar es Salaam. The Confederation of Tanzania Industries (CTI) yesterday hailed the Sh49.35 trillion government budget for the 2024/25 fiscal year, saying it will stimulate the country’s economic growth.

The budget tabled in Parliament last Thursday by Finance Minister, Dr Mwigulu Nchemba has been increased by 11 percent compared to the Sh44.38 trillion approved for the 2023/24 fiscal year.

CTI executive director Leodegar Tenga said manufacturers commend the tabled budget saying highlighted measures will lower production costs, encourage the use of local raw materials, boost completion, and drive economic growth.

Mr Tenga who was speaking during the budget analysis organised by manufacturers said the introduction of levies on imported goods will protect local manufacturing, stimulate investments, and increase exports.

“The budget proposes lowering fees imposed by regulatory bodies that will reduce production costs incurred by local industries,” he said.

He said reducing import duty on industrial raw materials and production inputs will enhance completion among domestic industries.

Furthermore, he said zero-rating Value Added Tax (VAT) on products produced by domestic textiles, especially from locally grown cotton will stimulate investment in the local textile industry.

CTI director of policy and advocacy Akida Mnyenyelwa said government measures will boost competition and affordability of local products in the global markets.

“These issues were part of manufacturers’ concerns presented to the government for intervention for the sector’s development,” he said.

However, manufacturers said that increasing the Railway Development Levy (RDL) from the previous 1.5 percent to two percent of the Cost, Insurance, and Freight (CIF) value will create a burden on industries relying on rail transport.

He said some tax measures, including those affecting the textile industry, may have adverse effects if not well addressed.

Earlier, Mr Tenga said the introduction of excise duty on imported and locally produced ethyl alcohol could adversely increase production costs, urging the government to re-evaluate such measures to prevent possible negative impacts.

He noted that the Mining Act (Cap 123) and respective Regulation 2022 GN No. 574 of September 22, 2022, require a free carried 16-pc interest in the shareholding of the cement, fertilisers, salt, and lime manufacturing companies.

The proposed increase in import duty on finished iron and steel products from 25 percent to 35 percent, or $250 per metric tonnes to 350 per metric tonnes, and the minimum importation price of $1500 per metric tonnes would adversely hurt the steel sector.

“This will not protect domestic iron and steel producers who have made significant investments, rather they will make them less competitive,” said Mr Tenga, requesting for government reconsiderations.

Meanwhile, the Parliamentary Budget Committee chairman, Mr Oran Njeza, recommended the need for expanding revenue sources through efficient tax collection systems for a sustainable economy.

Mr Njeza who was tabling the committee’s recommendations in Parliament said comprehensive reforms were required to maximise tax revenues and ensure fairness and compliance across all sectors of the economy.

He emphasised the importance of financial discipline in managing development projects and advocating for timely completion to optimise expenditure control.