Africa-Press – Tanzania. PRESIDENT Samia Suluhu Hassan’s measures to improve workers welfare have been highly welcomed by economists and analysts, saying the move will bring a positive impact on socio-economic growth. Addressing workers on May Day, President Samia, among other things, reaffirmed the government’s determinations to improve welfare of workers.
The president said in the coming financial year 2021/2022, the government will reduce Pay As You Earn (PAYE) tax from the current 9 to 8 per cent. The government, she said, also plans to promote between 85,000 and 91,000 employees who will cost 449bn/- and pay 60bn/- as salary arrears to civil servants.
It will also change the civil service structure which will cost the state 120bn/-, and employ 40,000 workers to reduce the workload to employees, especially in health and education sectors. She said the government will also scrap other charges that afflict the employees, including the 6 per cent Value Retention Fee (VRF) that has been charged annually to employees by the Higher Education Student Loans Board (HESLB) on the outstanding loan balance.
Commenting on the measures, an Economist-cumInvestment Banker Dr Hildebrand Shayo was of the view that the PAYE reduction should go together with a government employing qualified tax professionals, who should be retained in the tax administration system.
“My plea to the government should strengthen the tax administration system, to broaden the tax income and embark on tax education to ensure voluntary tax compliance,” he said.
Dr Shayo was optimistic that PAYE reduction will boost spending and eventually improve the economy. Dr Shayo commended the removal of the 6 per cent value retention fee, noting that heavy loans on students delay traditional individual savings. He said student debt slows economic growth, as borrowers are being prevented from fully participating in the economy.
“The removal of 6 per cent retention on student loans is based on the fact that collective student loans in Tanzania are argued to reach staggering billions, it’s not surprising that education debt has an influence on the Tanzania economy,” he explained.
He added; “On overall move to economy, is that one devastating impact of post-college debt is that it stifles the entrepreneurial spirit amongst the young people.”
For her part, the Lecturer at the Tumaini University Dar es Salaam College (TUDARCO) Rachel Yusuph said President Samia has clearly shown her determination to support the welfare of the working class. Ms Rachel said although the government hasn’t announced new salaries in the coming year but the President has promised to do so in the next year, saying this should serve as a motivation factor for workers to continue working hard.
“The President knows what exactly her people want and of course, she is exactly doing the same. I commend her for the bold decisions and commitment to address workers’ concerns on low salaries,” she said.
She was also impressed by President Samia’s decision to increase the age of dependents on the National Health Insurance Fund (NHIF) from 18 to 21 years, saying the government has highly protected parents from covering medical bills for their children.
“This has been a challenge for a long time, given the fact that most people of the age between 18 and 21 are still under care of their parents and unable to meet health service bills,” she added.
