Dear Mr. President,
Like most Tanzanians, I applaud you for going after the tax evaders and corrupted government officials. It's about time.
However, to make Tanzanians more tax compliant and to reduce corruption, serious economic and political reforms must be implemented immediately.
I propose the following to your administration:
1. Reduce VAT to 10%.
This will stimulate the economy by making goods and services affordable to low income earners.
2. Eliminate income tax for income below 1 million shillings a month for salaried workers and 4 million for traders.
This will increase spending power for poor consumers and help them afford to pay their bills. It will also make small traders more willing to pay taxes without reducing their capital. They can also be able to invest more in their businesses if they have extra income.
3. Reduce income tax for businesses. High taxes, without fine-tuning the rates in times of economic slowdow/crisis is one of the reasons why 99% of businesses cheat the government of tax revenue. Economic hardship encourage civil servants to take bribes to pay for the high cost of living. It also encourage businesspeople to give bribe to make their products more competitive.
4. Introduce civil service reforms. Productive civil servants should be paid more and promoted accordingly. Incompetent ones should be fired and corrupt ones should serve long prison sentences. The civil servants should not expect "life employment" if they are not competent. Competitive wages to the civil servants will also discourage corruption.
5. Increase the minimum wage to at least 500,000 a month. Most Tanzanians cannot eat 3 meals a day, let alone send their children to a good school with the current wages. This wage should also cover domestic workers. They have long suffered from minimum wage exclusion.
6. Reform the court sysyem.
Too many poor Tanzanians are spending years behind prison for petty crimes. Please set people free if they have served over 3 years waiting for their cases to be heard. The judges should send them to clean government buildings, clear trash in the city or do something more productive instead. It will also reduce prison congestion. Prison facilities should also be improved. It is a real shame, in this day and age, not to provide enough toilets to prisoners.
Judges should be not allowed to take a leave of absence for whatever reason other than health. Cases must be heard and judgement given in a reasonable time. It should not take 5 years to conclude a simple case.
The judiciary must be, at all times, feel, look and function independent of government pressure/interference. Even though our constitution stipulates that independence, in reality, the government often ignores it if the courts makes decisions not in her favour. Tanzanians would like to see the government respect court decisions. This will show the world our maturity as a democratic nation.
Before you introduce special courts to deal with corrupted civil servants and tax evaders, reform the current system first. It is impossible at the moment to seek justice in the court of law. It is not only time consuming but the system is heavily corrupted. Not only do average citizens are denied justice, it also discourages investors' confidence. It takes too long to settle business disputes.
7. Let more foreign nationals get visas on arrival. This will encourage more tourists to come to Tanzania hassle free.
8. Introduce a special visa for rich retirees. This will increase foreign revenue, employment and taxes.
9. Allow highly educated foreigners to work/immigrate to Tanzania for a fee. They will bring in much needed skills which are in short supply and capital. They will ask create employment.
10. Legalize dual citizenship.
11. Direct the postal service administrators not to tax packaged goods meant for personal use (under 300, 000 value).
Impose lower taxes for imports through the postal services to encourage Internet businesses to flourish. This will make it possible for small traders to afford starting a business with little capital. They can import without filling a container.
12. Encourage domestic manufacturers to invest with confidence by introducing competitive tax rates and by reducing red tape. They should be able to get all the necessary permits and licenses faster and cheaper under one roof.
13. Discourage luxurious imports by imposing higher taxes on them.
14. Since transportation network is still poor, many people depend on their cars for transportation. Currently, unrealistic tax rates just encourage corruption to take place. I suggest lowering car import tax to 25% for brand new cars regardless of engine capacity and 35% for used cars under 10 years old. This will let more Tanzanians afford to import more cars. You can then charge them more for road tax and make them pay for road worthy sticker as well. You can easily get 200,000 -1,000,000 per car, per year, depending on the engine size, for the duration of the car's usage.
15. Allow the people of Zanzabar and Tanganyika to choose their future destiny. I believe majority of Tanzanians believe in the union. However, we were not consulted. I believe the people are now mature enough to decide on their fate through a referendum. It is the right way, the democratic way to seek our consent.
Mr. President, I hope my suggestions will be of some use to your administration. I am sure other contributors will come forward and give you more suggestion and proposals. All we want, is a strong, stable and prosperous country.
My very best wishes to your administration.
