Angela Normino
The Parliamentary Budget Committee, led by Chairman Mr. Daniel Sillo, has advised the government to broaden the scope of tax collection and ensure effective utilization of tax systems to secure adequate funds for the implementation of crucial development projects.
Despite achieving revenue collection rates of 92.6%, 98.2%, and 98.5% in 2020/2021, 2021/2022, and 2022/23 respectively, a funding challenge persists in financing essential development initiatives. Mr. Sillo highlighted that the insufficiency of funds is attributed to growing debts owed to service providers, contractors, utility payments, and outstanding arrears to employees.
As of June 2022, the government had amassed a debt of 3.23 trillion/-, exceeding 12% of total government expenditure, surpassing the internationally accepted level of 2% for consecutive years. The National Assembly has resolved to review expenditures, eliminate unproductive spending, reduce unproductive exemptions, and consider writing off debts owed by public institutions that do not result in losses to enhance revenue collection and fund development projects effectively.
The committee’s analysis revealed unpaid claims for contractors, service providers, and suppliers, leading to project delays or suspensions. This challenge has inflated project costs, surpassing allocated budget funds and necessitating out-of-budget fund requests, impacting planned activities for the year.
Furthermore, the backlog of unpaid claims from previous years has disrupted subsequent year payments, prolonging the audit process for debts owed to various entities.
Mr. Sillo emphasized the importance of verifying and promptly paying claims for contractors, service providers, and suppliers to mitigate project delays and financial disruptions.
In the 2022/23 financial year, the government aimed to utilize 15 trillion/- for development expenditure. By June 2023, 13.97 trillion/- had been spent, equivalent to 93.7% of the target. The committee commended the government for allocating 12.26 trillion/- (87.7%) from domestic sources and 1.71 trillion/- (12.24%) from external sources towards development expenditure.
The committee extended congratulations to President Samia Suluhu Hassan for her dedication to allocating these development funds, showcasing her commitment to advancing crucial development projects in the country.
