Africa-Press – Tanzania. THE government has expressed its readiness to cut down corporate tax to any firm that will categorically promise to create employment opportunities, especially among young people.
The move aims at expanding private sector employment capacities and increase money in circulation to support quick economic growth in the near future.
The Minister for Finance and Planning Mwigulu Nchemba said the tax reduction will cover those with plans in place to address unemployment problems in the country. “We will meet with businesses, especially those paying corporate taxes and map the way forward of lowering tax in order to create employment,” Dr Nchemba said He added: “We will start by meeting banks where the government has a stake…and we are ready to change even policies to meet the goals for the country’s growth.”
The minister, who was the chief guest at CRDB shareholders’ seminar in Arusha said the government will listen more to the needs of private sector so that they could be able to grow more and offer more jobs. Dr Mwigulu represented the Vice- President Dr Philip Mpango at the workshop.
“We want companies to tell us their plans. For example if the government lowers taxes, then the companies should tell us how many people will be employed.
Thus we are ready to change our policies to facilitate their growth,” Dr Nchemba said.
The minister said for instance a firm could come up with a proposal that if the tax goes down by a certain percentage, then a certain number of people will be employed. He said such arguments will guide the government to consider reducing tax.
Similarly, Dr Nchemba said financial institutions and Bank of Tanzania (BoT) may come up with proposal on how to lower loan interests so that the government could also do something.
He said: “We are ready for such kind of proposals and our ears are open to listen,” The minister admitted that loan interest rates are still high and that something needs to be done to address the situation.
Currently, financial institutions charge interest rate between 14 per cent and 30 per cent per year and people are not comfortable with the situation.
“I believe if banks, BoT and the ministry do their homework properly they can manage to lower the interest rates,” Dr Nchemba said.
Moreover, Dr Nchemba challenged CRDB to revisit its loan interest rate for workers saying the current rates are high comparing to defaulting risks.
He said permanent employed workers have minimum defaulting risk compared to other sectors, hence their rates should be at the lowest level.
Earlier, BoT Deputy Governor Financial Stability and Deepening Dr Bernard Kibesse pleaded with financial institutions to lower loan interest rates to create attractive environment for more traders and investors to access loans.
“The current interest rates are exorbitant to many, especially those at micro and medium levels. Please consider cutting them down,” Dr Kibesse said.
