Taxpayers Must Put Their Governments to Task

Published on 5th December 2006

“Without the corrective instruments of politics, the market economy will exhibit some inefficiencies that would render the population needlessly poor.” Taghizadegan and Hochreiter.

 

Introduction

 

Intervention programmes by the World Bank and the International Monetary Fund have failed to lift African countries out of their bogged economies. Campaigns for cancellation of debts, increased foreign direct investments have not taken the continent out of the wreckage. In spite of aid flows to African states between 1960 and 2003 that amounted to about US $ 568 billion, there has been a decline in per capita income by 11 percent within the past three decades.

 

Sub–Saharan Africa’s indebtedness, mismanagement and wastage of resources, have grown out of proportion and increased incidences of poverty and pandemics such as AIDS and Malaria. Aid money has failed to lift the continent out of “politically made” economic bankruptcy since it does not address the root cause.

 

In Tanzania, the government has not provided a suitable environment to start a business in a market orientated economy where there is free exchange of goods under the rule of law. Aid money from donor countries is helping sustain corrupt politicians consequently preventing Africa from helping itself out of the “politically made” economic mess.

 

Problems facing Africa are attitude oriented rather than economic. Strong governments, built on transparency, unbroken communication with the electorate and efficiency in spending public money for socioeconomic development will tackle them.

 

The Taxpayers Association of Tanzania (TATA)

 

TATA is the first taxpayers’ movement on the African continent. It was inaugurated by the then president of the world Taxpayers Associations, Mr. Bjorn Tarras–Wahlberg. Taxpayers’ movements worldwide, under the World Taxpayers Associations (WTA), direct their efforts to protecting the constitutional rights of citizens by monitoring public expenditures and enhancing revenue collection. This is done by motivating taxpayers to meet their tax obligations through: legal rights for taxpayers; efficient public sector; privatization and deregulation; low taxes; transparent and visible taxes and simple and clear tax system. Higher taxes elicit tax evasion thereby punishing the economy by shifting of investments and employment to places with tax competitive rates.

 

Tanzania’s Economy

 

Tanzania’s economy is largely agrarian. Agriculture accounts for about 45 percent of the GDP and employs 80 percent of the population. Farm productivity is predominantly low and is influenced by rudimentary farming practices. Sustainability levels have been constrained by poor levels of knowledge and skills by the peasantry, lack of access to financial intermediations, inadequate technical support services and unsustainable market links. Lack of proper policies has led to massive youth migrations to urban areas. Out of annual estimates of 650,000 new entrants to the labour market, only 40,000 or 6.2 percent are employed in the formal market. Public sector reforms have caused a drop in employment levels in government and parastatals from 5.2 percent (1995) to 2.5 percent in recent years.

 

Following a weak private sector and wrong intervention policies influenced by bureaucratic hurdles, unemployment is worse among the youth. Many youths with secondary education are in the informal sector merchandising goods (locally known as machingas).

 

Poverty and Literacy

 

Claims of impressive growth, single digit inflation reforms, debt cancellations and aid have not lifted Tanzania out of its economic wreckage. Those living in poverty increased from 48 percent in 1992 to 75 percent in 2005. Poverty is highest among households which depend on agriculture. “Per capital income remains very low and Tanzania will need to maintain high growth low inflation and a steady pace of structural reforms for many years to achieve significant inroads against poverty” says an IMF country report (April, 2006).Illiteracy rates remain high. About 28.6 percent of Tanzanians can’t read and write in any language (National Strategy for Growth and Reduction of Poverty, 2005). It is highest among women (36 percent) than men (20.4 percent).

 

Impediments to Sustainable Development

 

Bureaucratic corruption  and an inefficient  public  sector’s misuse of  tax payers’  money  have undermined confidence in the government, influenced higher  taxes and robbed  the  nation  of a conducive  business  and investment  environment. Justice Joseph Warioba points out that without political will, nothing will be achieved in the fight against corruption.

 

Despite efforts on instituting respect of  property rights and  rule of law as vowed  by African  leaders under the NEPAD strategy, oppressive planning  restrictions and lack of land entitlement have been  responsible  for undersupply  of suitable housing  units leading to development  of slums. People have been denied access to credit facilities.  It is impossible for people to use their houses as security against loans. This has robbed people of employment opportunities and ability to create wealth for themselves. Reforms, under foreign coercion are providing opportunities to multinationals and leaving the poor hopeless.   Many of the uneducated youths migrating into urban areas can’t be absorbed into (formal) employment. They resort to prostitution and drug addiction.

 

Way Forward

 

Africans should take charge of their own destiny. Over 70 percent of Tanzania’s development budget is financed by donor countries. Bureaucratic corruption and inefficient public sector have denied the nation of             the much needed resources for development thus endangering national sovereignty. Despite claims  by the government on impressive growths and good economic  performance, the shilling  has had a downward trend, losing  its value against the American dollar  from Tshs 301.9  in 1992 to TShs 1,340 in 2006 (a depreciation  of about 438.9 percent).

 

Modern Representative Democracy that calls for separation of the legislature and executive, is of a symbolic nature as the majority forming the governments are loyal to their parties rather than to the electorate.

 

Corrective instruments that can curb bureaucracy and allow freedom in markets should be put in place. Stronger taxpayers’ movements can protect citizens from the slavery of taxation and wrong spending of taxpayers’ money. With constitutional rights, the movements will protect the legal rights for taxpayers and initiate dialogue with respective governments for privatization and deregulation of their economies for the social good of the nationals.

 

By Otieno O. Igogo and Khalifa Swalehe

Taxpayers Association of Tanzania (TATA)


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