2024/25 budget: Experts cast hope over economic growth

DAR ES SALAAM: SOME economic experts have expressed hopes that the proposed 2024/25 budget will enhance economic growth.

Speaking at a budget briefing organised by the Ernst & Young (EY) organisation in Dar es Salaam over the weekend, they noted that it will have great impact in raising the economy.

EY Country Managing Partner, Mr Joseph Sheffu, said the next budget intends to boost the economy considering that the growth had in the recent years gone down due to global crises such as Russia-Ukraine war and Covid-19 pandemic.

“We see that this budget intends to enhance economic growth rate,” Mr Sheffu said.

Head of Economics department at the University of Dar es Salaam, Dr Innocent Pantaleo, said Tanzania still indicates strong macroeconomic fundamentals that make it resilient, despite global economic slowdown.

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Dr Pantaleo said the inflation has remained at single digit, while lending rates charged by banks decreased slightly an average of 5.4 per cent.

“We see more intention of engaging private sector when you look at tax interventions,” he said, adding that the budget also encourages local production, hence would lead to more employments, more vibrant private sector.

He argued that measures have also been proposed to mitigate effects of climate change, citing the focus on promoting clean cooking energy as among measures.

“This budget proposes more revenue collection measures such as to increase the use of electronic devices and system to increase the revenue,” he pointed out.

However, Dr Pantaleo advised the government to put more efforts to increase domestic revenue for funding development projects.

On his part, Mr Fredy Lugangira, EY Senior Tax Manager, commended the government, saying the proposed fiscal changes aimed at increasing tax base and compliance to increase the revenue.

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For instance, proposed introduction of 5 per cent on non-residents for payment made to resident digital content creators.

EY Associate Director Chiaru Masonobo commended the government’s proposal to have VAT exemption on various items including supply of aircraft, aircraft engine, aircraft parts, aircraft maintenance to local manufacturers, supply and importation of water treatment chemicals and water meter.

She said these exemptions will, among others, attract more investors in the aviation sector, which is key driver for tourism growth.