Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
UNITED REPUBLIC OF TANZANIA MINISTRY OF FINANCE HON. MUSTAFA HAIDI MKULO (MP) MINISTER FOR FINANNCE DISPLYING THE GOVERNMENT BUDGET FOR 2011/2012 GOVERNMENT BUDGET FOR FINANCIAL YEAR 2011/2012 CITIZENS’ BUDGET EDITION Issued by Ministry of Finance in collaboration with Policy Forum 1 1. The Citizen’s Budget A citizens’ budget is a simplified digest of the national budget produced in a format that makes it easy for the ordinary citizen to understand the main features of what the government has planned for the financial year. This citizens’ budget aims at making budgetary information in the country more understandable, accessible, interesting and relevant to ordinary citizens. It also gives them the opportunity to be more involved and informed about the government’s planning, and budget execution process. It mentions in brief where the government is going to get its money and how it has arranged to spend it. The financial year 2011/2012 is the first year of implementing Government’s Five Year Development Plan which comprises the following pillars: • Sustaining macroeconomic stability and maintaining the successes achieved in the provision of social services, • Using available resources as catalyst for inclusive economic growth, • Exploiting Tanzania’s geographical advantages, and • Increased use of ICT. In view of the above, the 2011/2012 budget seeks to address, among others, the following challenges: • Increasing domestic revenue collection through increased Government investments in economic stimulants as well as broadening the tax base. • 2. The high cost of living and high unemployment levels among our youth caused by increase in prices of goods and services and low job creation, and What the government wants to achieve in 2011/2012 In general, the budget sets out measures to reduce cost of living on the citizens and stimulate economic growth by implementing the following:A. Enhancing the quality of health care and education services in the country through: • Consolidating gains and achievements made in the health and education sectors and improving access and the quality of services delivered in these sectors. B. Improving agricultural productivity and irrigation schemes through: • Promoting private sector investment in the agricultural sector, • Strengthening Research and Development for agricultural production and mechanisation technologies, • Upgrading the current national food reserve infrastructure and establishing new facilities in strategic locations, • Constructing strategic water storage facilities (small, medium and large scale dams), irrigation and drainage infrastructure for 33 schemes, • Rehabilitating existing traditional irrigation schemes, and • Developing and strengthening cooperative societies. 2 C. Improving transport and transportation infrastructure (roads, railways, ports, airport airports, s, a national optic fibre) through: • Construction of ongoing road and bridge project, • Rehabilitating railways such as the TAZARA line and the central line; • Rehabilitating and expanding airports and improve air transportation ; • Restructuring and improving Air Tanzania Corporation Limited (ATCL); • Rehabilitating and expanding ports including improvement of the Dar es Salaam channel, commence construction of a freight station at Kisarawe, constructing the Mbegani Port at Bagamoyo, developing a deep berth at Tanga port and upgrading Mtwara Port; • Continue implementing the Dar es Salaam decongestion plan. D. Stabilizing power supply throughout the country through: • Completing construction of the 100 Megawatt and 60 Megawatt power plants in Dar es Salaam and Mwanza respectively, and • Enabling TANESCO to purchase of power generation equipment, support joint ventures with investors in power generating plants such as the 300 megawatt plant in Mtwara, the 400 kilovolt power transmission line for the MorogoroTanga-Kilimanjaro-Arusha, and expansion of the North West grid for Kagera, Kigoma and Rukwa Regions. E. Improving water supply through : • Rehabilitating water supply systems to reduce leakages and water loss, • Constructing new water supply systems and distribution networks, and • Constructing Kidunda Dam to improve Dar es Salaam City water supply. F. Improving other government functions such as: • Strengthening good governance and accountability, and • Maintaining peace, order and security of peoples’ lives and property. 3 Sectoral allocations as a percentage of the total Budget. In line with the above, the priorities of the 2010/2011 Budget are: availability of electricity; water; transport and transportation infrastructure; agriculture and irrigations; and job creation in the private and public sectors. 3. The sources of revenues The total amount planned for financial year 2011/12 is 13,526 billion Tanzania shillings or approximately 13.5 trillion shillings (Shs.). The Government plans to raise this amount through domestic revenue (tax and non-tax revenues), domestic loans (Funds sourced internally) as well as external grants and loans from Development Partners (Funds sourced externally). The figure below depicts contributions from the sources mentioned above. 4 Where is Money coming from and How Much? Non-tax Revenue Sh. 547.1 billion Tax Revenue Sh 6,228.8 billion Funds sourced internally Sh. 8,330.7 billion Local Government Authorities’ Own Source Revenue Sh. 350.5 billion Domestic Borrowing Sh. 1,204.3 billion Total Amount to be collected Sh. 13,526.0 Billion General Budget Support Tsh 869.4 billion Funds sourced externally Sh. 5,195.3 billion Loans and Grants Sh. 3,054.1 billion Non-Concessional Borrowing Sh.1,271.8 billion 4. How the money is planned to be spent Expenditure of the national budget is divided as follows: a) Recurrent expenditure which is the total amount of money the government spends on its recurrent operations. The expenditure includes salaries expenses for civil servants, interest payments on loans government has taken out, rent and fuel costs and the like. b) Development expenditure which is money that is to be used to finance development projects such as building schools, hospitals and roads which will result in improved service delivery to the ordinary Tanzanian. This expenditure is closely linked to observable changes in quality of life. 5 The figure below depicts government expenditure on the sources mentioned above. How is the Government planning to spend the money collected? To pay national debts Shs. 1,910.4 billion Recurrent Expenditure: Shs. 8,600.0 billion Money for government operations Wages and Salaries Shs. 3,270.3 billion Other Charges: Purchase of goods and services Shs. 3,419.6 billion Budget Allocation Shs. 13,526.0 billion Development Expenditure Shs.4,926.0 billion Money to finance development projects such as building schools, hospitals and roads 6 Development and Recurrent Expenditure As Percentage of the Total Budget. 7 5. Policy changes in facilitation of the 2011/2012 budget With a view to strengthening revenue collection while improving the standard of living, the Government proposes the following changes: Changes aimed at fostering KILIMO kwanza Changes in the Value Added Tax Act, CAP 148: • Exempt VAT on spare parts for threshers, rice dryers and mills, planters, trailers, power tillers, NASCOR Pellet Feed used for poultry, raw materials used for making fishing nets (nylon fishing twines), spare parts for sprayers, harrows and grain conveyors. Changes in the Income Tax Act, CAP 332: • Abolish withholding tax on fish transport for foreign destined freight to promote fish exports and increase foreign exchange earning from the sector. 8 Changes aimed at Fostering Education and Job creation The Vocational Education and Training Act, CAP 82 • Change the allocation of revenue collected from Skills Development Levy of 6 percent so that 4 percent is allocated to the Higher Education Students’ Loans Board, and 2 percent to the Vocational Education and Training Authority – “VETA” to ensure availability of resources for the provision of Loans to higher education students. Other facilitating changes Changes in the Excise (Management and Tariff) Act, 147 • Reduce Excise Duty on HFO from 80 shillings to 40 shillings per litre to reduce the cost of production and promote industrial growth; • Replace the 120 percent Excise Duty imposed on plastic bags of more than 30 microns of Polymers with 50 percent; and • Adjust the specific excise duty rates on non petroleum products by 10 percent. The Stamp Duty Act, CAP 189 • Exempt Stamp Duty on the transfer of the ownership of assets to the Special Purpose Vehicles (SPV) for the purpose of issuing asset-backed securities. The Road Road and Fuels Tolls Act, CAP 220 • Exempt fuel levy charged on fuel for vessels, rigs and other equipments used in oil and gas exploration. • Introduction of a special account by the Tanzania Revenue Authority (TRA) where mining companies will be required to draw their estimated annual petroleum consumption plans and deposit money on the account equal to estimated taxes on petroleum products consumed in a given month. The Business Licensing Act, CAP 208 • For Town Authorities (Cities, Municipals and Towns) to impose 50,000 shillings annually for any business (except hard drinks) undertaken in the area; • For District Councils to impose and collect business licence fees of 30,000 shillings annually for any business undertaken in their area; • For Village Councils to impose and collect business licence fees of 10,000 shillings annually for any business. • Amend the Local Government Finance Act to incorporate the changes proposed above. 6. Sectoral allocations and spending plans for 2011/2012 The following presents sectoral budget allocations followed by a brief highlight of sectoral spending plans. NOTE THAT the figures presented are sectoral allocations and NOT ministerial allocations. 9 Education Sector a. Budget allocation for the sector The total budget for the education sector for 2011/12 is 2,283 billion shillings which is an increase of 11.68% from 2,045.4 billion shillings allocated in 2010/2011. b. Sector spending plans • 954.8 billion shillings to primary education. • 480.7 billion shillings for secondary education development, • 35.8 billion shillings for Teacher’s capacity building. • Launching and implementation of the “Ndiyo Naweza” program of intervening on illiteracy, • Conducting assessment of the level of illiteracy Tertiary education: • Paying for 1,900 students for undertaking the first degree in medicine, • Paying for 120 Lecturers to pursue postgraduate studies, • Sponsoring 126 university students studying in Uganda and Mozambique through exchange programme, • Paying for 112 disabled persons for their higher education, • Financing the University of Dar es salaam to establish the students’ resource centre as a part of celebrating 50 years of the institution. • Mwalimu Nyerere Memorial Academy to establish a diploma and degree courses in education finance at Bububu Campus in Zanzibar. Vocational education • To address human capability and well-being issues, government has allocated a total amount of 27.8 billion shillings which is 2% of skills development levy for vocational training in this financial year. 10 Health Sector c. Budget allocation for the sector The total budget for the health sector for 2011/12 is 1,209.1 billion shillings which is an increase of 0.3% compared with 1,205.9 billion shillings allocated in 2010/2011. a. Sector spending plans • 20 billion shillings has been allocated through the MMAM/PHSD programme to construct dispensaries in villages countrywide to improve and strengthen primary health care services. • 189.6 billion shillings has been allocated towards primary health care quality improvement at district level for the procurement and supply of medicines and medical equipment. The funds will also be used to build capacity of health workers (Nurses, Doctors, Midwives) at that level. • 6.6 billion shillings has been set aside for rehabilitation and maintenance of districts hospitals countrywide. An additional 4.5 billion shillings has been budgeted for ongoing projects of construction of regional hospitals in Singida, Shinyanga, Mbeya and Manyara while 5.6 billion shillings has been set aside for maintenance and renovation of existing regional hospitals country-wide. • 22.6 billion shillings is has been allocated to implement the programme to reduce under – five and maternal deaths. These funds will also be used for the supply of vitamin A and D and about 100,000 delivery packs to delivering mothers. • 87 billion shillings has been allocated towards Tuberculosis (TB) and Leprosy control programmes and other communicable diseases countrywide. It will be directed towards strengthening preventive services. 11 • • • • 76.1 billion shillings has been allocated towards curative services, of which 2.5 billion shillings will be directed towards cancer treatment. 1.4 billion shillings has been budgeted for supporting people with disabilities and underserved social group (older people, orphans). In combating and preventing HIV/AIDS, the government has allocated the sum of 127.1 billion shillings for the supply of ARVs, purchasing 150 CD4 testing machines to provide services to people living with HIV/AIDS. The money will also be used for increasing about 400 HIV/AIDS service provision centres. 85.5 billion shillings has been set aside for the provision of Health Insurance Services. Water Sector a. Budget allocation for the sector The total budget for the Water sector for 2011/12 is 621.6 billion shillings which is a 56% increase from 397.6 billion shillings that was allocated in 2010/11. b. Sector spending plans • 86.7 billion shillings has been allocated to Councils and Regional Secretariats for the Construction of water infrastructure in 10 villages of each Local Government Authority. 12 • • • • • 7.033 billion shillings has been allocated towards the construction of dams and drilling of wells in Chamwino,Nkasi,Chunya, Bunda, Rorya,Musoma,Kishapu, Bariadi, Iringa and Meatu Districts. 106.7 billion shillings has been allocated towards the construction of water projects for Musoma and Bukoba Municipalities. 6 billion shillings has been allocated towards the implementation of a water project in the city of Dodoma. 8.6 billion shillings has been allocated towards the implementation of a water supply project in Morogoro Municipality, 6 billion shillings has been allocated towards improving the Water and Sewerage Services in Dar es Salaam through construction of Kidunda Dam. 24.6 billion shillings has been allocated towards expansion of the water filters at Lower Ruvu, Agricultural Sector a. Budget allocation for the Sector. The budget for the Agricultural sector for 2011/12 is 926.2 billion shillings which is a 2.5% increase from 903.8 billion shillings allocated in 2010/11. b. Sector spending plans The Sector intends to deal with the main challenges facing agricultural development in the country including investing in irrigation infrastructure, provision of credit services to farmers, improved productivity, improving marketing infrastructure and climate change mitigation measures. Other measures aimed at facilitation include: • 7.1 billion shillings set aside to facilitate availability of inputs and implements including purchase of tractors and power tillers, • 136.7 billion shillings set aside for continued provision of subsidies for fertilizers and chemical for various crops, • 7.3 billion shillings allocated towards subsidies for improved seeds and seedlings, • 18.2 billion shillings allocated towards purchase of food and for conducting surveys to establish status of food security in the country, • 1.4 billion shillings for implementing agricultural irrigation projects. Government intends to develop irrigation infrastructure including 95 irrigation projects to cover 70,500 hectares, • 6.5 billion shillings allocated towards the provision of education and extension services and spread of technologies including Farmer-to-Farmer Extension. The funds will also be used for provision of educational infrastructure, • 4.5 billion shillings has been set aside for strengthening research on better seeds which are resistant to pests and diseases, drought and produce high yield. The funds will also go towards research on Integrated Soil Fertility Management options. • 10.9 billion shillings towards improvement of productivity of rice production including making its farming more commercial by providing implements for cultivating, harvesting and marketing mechanisms, • 1.9 billion shillings towards implementing reforms and strengthening cooperative unions including SACCOS, • 2.1 billion shillings has been allocated for abattoir improvement, capacity building, skin and hides processing, and 13 • 13.2 billion shillings for Improving environmental conservation including law enforcement, public education, and sustainable management Improved Indigenous Goat Goat Rearing in Kondoa District Energy Sector a. Budget allocation for the sector The total budget for the Energy sector for 2011/12 is 539.3 billion shillings which is a 65% increase from 327.2 billion shillings allocated in 2010/11. b. Sector spending plans • 124.9 billion shillings allocated for finalizing construction of emergency power plants which will generate additional 160 megawatts in Dar es Salaam and Mwanza, • 136.9 billion shillings has been set for implementing other special energy programmes to improve transmission and distribution of power infrastructure, • 54.2 billion shillings has been allocated for Rural Energy Agency (REA) and Rural Energy Fund which will scale-up investment in rural energy so as to enable citizens to establish more economic activities in rural areas as well as creating more jobs, 14 • • 6.6 billion shillings has been allocated towards investing in natural gas development at Songo Songo and Mnazi Bay so as to boost production of gas for use in manufacturing and domestic consumption, and 6.5 billion shillings has been allocated towards promoting petroleum development in the country. Ubungo 100 MW Power Station Using Using Natural Gas to Generate Electricity lectricity Infrastructure Sector a. Budget allocation for the sector A total of 2.78 trillion shillings has been allocated to roads and transport infrastructure, ICT and R & D with specific emphasis being directed to Roads, Airports and Railways infrastructure. The 2011/12 allocation is an increase of 85 % from 1,505.1 billion shillings allocated in 2010/11. b. Sector spending plans • 112 billion shillings for construction of Airports infrastructure; • 123 billion shillings for construction and rehabilitation of Railways infrastructure including procurement and rehabilitation of Wagons; • 1.7 trillion shillings for construction and maintenance of Roads infrastructure as well as procurement and rehabilitation of Ferries; and • 5.0 billion shillings for construction of Government Houses. On strengthening Information, Communication and Technology (ICT) and Research and Development (R & D) in the financial year 2011/12 the Government allocates; 15 • • • • • • • • • • • 2.0 billion shillings for national ICT backborne infrastructure; and 25.9 billion shillings for financing of research and development. Employment Creation Government plans to spend 140 million shillings to employment creation programmes country-wide. 700 million shillings has been set aside for the “Mwananchi Empowerment Fund Project” to finance youth self-employment projects, 2 billion shillings has been set aside to facilitate continued implementation of the “Women Economic Empowerment Project” which seeks to empower women in Tanzania, 925 million shillings will be provided as loans to Tanzanian small entrepreneurs through SACCOS, 500 million shillings has also been set aside for the Presidential Trust Fund to support Small Entrepreneurs of Tanzania. Manufacturing & Industrial Sector 4.0 billion shillings has been allocated towards Special Economic Zones (SEZ) programme which will include paying compensation to the land set aside for SEZs, 4.8 billion shillings set aside to continue with construction of a biolarvicideproduction plant in Kibaha. It will produce insecticides for fighting malaria, 4.5 billion shillings has been set aside for Rural Micro, Small and Medium Enterprises Support Programmes “MUVI” aimed at improving rural employment opportunities in six regions (Tanga, Pwani, Iringa, Manyara, Ruvuma and Mwanza), 1.8 billion shillings has been set aside for enhancing entrepreneurs activities. Of which, 1 billion is planned to be spent on the National Entrepreneurship Development Fund (NEDF) which seeks to enhance micro entrepreneurs’ access to finance. 16 Budget Reference Reference Documents The following is a list of the documents published by Government and used as sources of information to prepare the budget: • • Tanzania Development Vision 2025, together with its initial Five Year Development Pan according to which by 2025, Tanzanians will be well educated and able to economically sustain themselves government will serve the people and the economy will be strong and competitive, Macro-Economic Policy Framework: provides information about tax policies and reforms, MKUKUTA II, which will last from 2010 until 2015. It focuses on using economic growth to address poverty and in particular emphasizes the role of agriculture in this, • The Millennium Development Goals 2015: focus on addressing hunger, education, gender equality, child and maternal health, fighting HIV/Aids, sustaining the environment and building a global partnership, • CCM Election Manifesto 2010 -2015, • National Debt Strategy, • Joint Assistance Strategy for Tanzania, • Sector Policies & Strategies, • Performance Assessment Framework (PAF) under GBS, • Ministerials’ Budget Speeches for Year 2011/12, • 3 Pre-budget Statements originate from Annual Public Expenditure Review Consultation, • Medium Term Plans and Medium Term Expenditure Framework Budget Memoranda, • • • • • • Appropriation Act, 2011, Finance Act, 2011 State of the Economy Speech, National Budget Survey, and Estimates of Revenue and Expenditure for Year 2011/12 (Volumes I – IV). 17 What can you do with this information? The national budget is an important reflection of what the government really plans to do in that year. If you want to know where your tax money is going, whether there are plans to improve education or health in your area, you can look at how and how much money is allocated, in particular to development. This booklet tries to summarise some of this information as simply as possible. However, you can find out more about the budget process from: • The budget documents of Tanzania (see reference documents) and in particular, the four volumes of national budget books books which are available at the ministry of Finance, • The Ministry of Finance P.O. Box 9111, Dar es Salaam (Website: http://www.mof.go.tz) • Local Government Offices and/or officials in your area such as the Village Executive Chairperson, or • Policy Forum, P. O. Box 38486, Dar es Salaam. Remember, it is your right to know this and more information surrounding the national budget. Talk to your leaders about this information and share it with other people in your community! 18 (Tear-out page) What are your ideas, questions, thoughts or comments on the budget? • Do you need more information than is provided in this booklet? What kind of information do you need? • Is there anything more you would like us to know? 1. Was this booklet useful □ Yes Somewhat 2. Was the booklet easy to read and understand? □ Yes Somewhat 19 □ No □ □ No □ Post or deliver this leaflet to the Budget Department, Ministry of Finance P.O. Box 9111, Dar es Salaam. 20