TAX NEWS - June 2010

Tanzania Tax: Civil servants hail tax cut, wage raise

Civil servants smiled all the way home after the government announced a slash on the Individual Income Tax from 15 to 14 per cent, while the minimum wage will go up in the coming financial year, even though it was not made clear by what percentage.

This will be done in conjunction with the increment of the minimum wage to be announced by the minister of State in the President's Office, Public Service Management. The measure is intended to reduce the tax burden on lower income earners.

The statement was made yesterday by Finance and Economic Affairs minis­ter Mustafa Mkulo when tabling the 2010/11 budget in the National Assembly in Dodoma.

Relying on the projection for payment of wages and salaries on the current financial year, the government has decided to add a total of Sh342 bil­lion, from Sh1.7 trillion to Sh2.3 trillion to cater for the same.

He also added that this is aimed at fighting various strike threats and ghost workers who prevail in the system and who consume a huge sum of money.

"The government will take further measures in dealing with these prob­lems… They will include improving remuneration for civil servants and regu­lar verification of the payroll in order to eliminate ghost workers" said Mkulo.