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Stakeholders have urged the government in co-operation with other stakeholders to establish a legal framework for Corporate Social Responsibility (CSR) practices as to ensure its effective implementation and compliance for the benefit of both national and international interests.

Speaking at the Policy Forum breakfast debate on 27th February 2015 at New Africa Hotel, Ms. Winfrida Onesmo, from the Arusha NGO Network (ANGONET) which addresses issues concerning natural resources and environmental conservation, said CSR as stipulated in the 2009 mining policy of Tanzania is still fragmented and lacks focus on how interests of Tanzanians and business communities are ensured.

Onesmo was presenting on a study which ANGONET conducted to assess the situation of CSR in Tanzania’s mining industry with a specific focus on Tanzanite which according to her found that there was endemic poor governance (e.g. secrecy in contracts) and that the service levy of 0.3% of annual turnover of mining companies supposed to be paid to the local authorities does not seem adequate to finance public services to surrounding communities.

“Once the CSR legal framework is in place, CSOs in collaboration with the Government and private sector can establish a national awareness platform to strengthen the ethical and moral conduct of the business,” she recommended.

She further suggested that the central and local Governments to integrate CSR in their development plans and establish a clear strategy for CSR so as to reverse the current practice where CSR is simply being applied as a branding and marketing strategy by Mining Companies.

However, Simon Shayo, the Vice President Sustainability at Geita Gold Mine Tanzania (GGM), presented on the practical experience of CSR in his company noting that in 2012 and 2013 alone, GGM contributions totaled over Tshs 450 Billion Tanzanian Shillings in taxes and royalties to the Government, making GGM one of the single largest and most compliant tax payers for Mining Sector in Tanzania, both in 2013 and 2014.

He stressed that GGM has agreed to pay 0.3% of its annual turnover as Service Levy to the Geita Town Council effective from the 1st of July 2014 instead of the US$200,000 paid in lieu of all local taxes provided under the original MDA of 1999.

Mr. Shayo went on to say that AngloGold Ashanti/GGM believes that communities should be better off for Geita Gold Mine having been there as his company has, through the Kilimanjaro challenge against HIV fund, built a Voluntary Counselling and Treatment Centre in Geita Town in support of government initiatives to combat HIV and AIDS and has also signed a five-year contract worth over TZ 680million to support Lake Victoria’s first medical boat.

He however mentioned some of the challenges which they face as being;frequent changes of legal and policy frameworks, falling gold prices and illegal/artisanal/small-scale mining.

During the plenary discussion participants insisted that CSR should be seen as mutually beneficial to all stakeholders and therefore to achieve this, the government needs to come up with a clear legal framework to support it.

CSOs and other stakeholders including AMREF have lauded the government for launching the long-awaited National Education and Training Policy (ETP) that had been in the back-burner for almost eight years.

Speaking soon after the launch, Dr. Serafina Mkuwa, a representative of AMREF working on sexual reproductive said that the policy can finally be operationalized as among other things, it now allows re-entry of pregnant girls to school after giving birth.

Dr. Mkuwa also commended Policy Forum and the PAMOJA TUNAWEZA alliance which comprises of five organizations namely: AMREF Health Africa, Restless Development, Health Actions Promotion Association (HAPA), NIMR Mwanza Centre and Medicos Del Mundo for organizing a Breakfast Debate titled “should pregnant girls return to school after giving birth” held on 28th of January 2015 at the New Africa Hotel, Dar es Salaam to contribute to efforts push the policy’s finalization.

Speaking during the debate, Dr. Rebecca Balira from the National Institute for Medical Research (NIMR) for Sexual and Reproductive Health, Rights (SRHR) Alliance “Pamoja Tunaweza” said that 55,000 girls were expelled from school between 2003 and 2011 out of which a huge number were students from secondary schools therefore operationalizing this policy would give these girls their right to education.

Commenting on the same, Dr. Elizabeth Mapella from the Ministry of Health and Social welfare (MOHSW) assured the audience that the government including the president himself was committed to operationalize the policy.

Prof. Sifuni Mchomewas quoted by the media saying that this decision to launch the ETP was taken by the government after an outcry from stakeholders who had been advocating for many years for the overhaul of the education system following the fall in education standards in the country.

 

 

The Ileje District Commissioner has hailed the support extended by civil society organisations in her district and admitted her own work would have been more difficult in their absence. Rosemary Staki Senyamule acknowledged the work done by IRDO, MIICO, Restless Development and Policy Forum to name a few and advised government to see CSOs more than just faultfinders but partners in development.

Conversely, she challenged CSOs to not only criticize government but also give solutions to the issues they raise. This counsel was given during a meeting between Policy Forum, MIICO, IRDO and visitors representing Oxfam America at the District Commissioner’s office who were interested in knowing the engagement of Tanzanian citizens and CSOs in development programmes.

Since 2012, MIICO, IRDO and Policy Forum have been working closely with district officials on Social Accountability Monitoring (SAM) training to selected civic actors. After the training, the civic actors collected and analyzed documents from Ileje district council and noted that although there was a budget allocation for health centre staff, none had been employed despite the construction of dispensaries for Chabu and Shinji villages having been completed and ready for use for almost eight years. The villagers were still being forced to cross a crocodile-infested river to Malawi using a makeshift bridge to access health services.

After constant follow-up by the civic actors, Chabu village now sees staff working and providing health services with villagers not having to go through a needless journey.

Ms. Senyamule’s appreciation of the role of CSOs speaks to the importance of "collective action" whereby multiple stakeholders see development outcomes from working together particularly in cases where lone action is unviable.

 

 

Recently the International Consortium for Investigative Journalists (ICIJ), a US-based watchdog released a report   with data on monies wired to the HSBC Bank in Switzerland (one of the world’s largest banks) including by people associated or connected to Tanzania. About a hundred people wired $ 114 million (equivalent to 205 billion Tanzanian shillings) for year 2006/07.

Based on the report, in the East African region Kenya takes the lead position while Tanzania ranks second followed by Uganda, Burundi and lastly Rwanda. These countries have $559.8m, $114m $89.3m, $30.2m and $2.1m in the HSBC bank account respectively. The maximum amount of money associated with one client connected to Tanzania was $20.8m.

Policy Forum is aware of the fact that our laws do not limit one from opening and running offshore accounts. It is required, however, that before the opening of the account a permit/approval has to be sought from the central Bank of Tanzania (BoT). There are therefore legitimate uses for Swiss bank accounts and trusts. Thus, Policy Forum, does not intend to suggest that the account holders listed in the ICIJ Swiss Leaks have broken the law or otherwise acted improperly.

There have been different reactions to the released data and a great concern expressed by stakeholders is the purpose of using secret bank accounts. The information on the ICIJ website does not provide a link for full downloading of the source files.

There have been cries in Tanzania and other African countries over tax avoidance as well as illicit financial flows which deprive our countries with significant financial resources that would have helped in the provision of social services to our people. To curb these problems and others related to them, transparency is highly important and any information that would lead to helping asset recovery would no doubt benefit many poor nations.
Many Tanzanians are still keen to receive an investigative report on Swiss billions emanated from a private motion tabled by the Kigoma North legislator Zitto Kabwe in November 2012. A special team which was chaired by the former Attorney General Frederick Werema was formed and promised to make the report public but this has not happened until now.

It is in the public interest to have in public the Tanzania-associated clients who hold these accounts. This is particularly important as part of the government’s initiative to advance transparency. Transparency is actually amongst the four pillars of focus in the Tanzania Open Government Partnership Action Plan.  As Attorney General  George Masaju promised that the final report  would be  tabled in the Parliament, Tanzanians  are  looking  forward to  see the implementation of it  and that  corrective measures are taken  based on findings of the  report.
In these times of serious public pessimism, it is vital that key information and especially one that has to do with the interest of the people be provided to the public accurately and timely. If this does not happen then citizens will always believe that those in power are involved in plundering our wealth and hiding it abroad.

 

Different civic actors have called upon the government to fully operationalize the reviewed National Education and Training Policy (ETP) of 1995 which now allows pregnant girls to return to school after they have given birth and recommended that sexual and reproductive education be given to young girls and young mothers.

This call was made during the Policy Forum Breakfast debate on 30th January 2015 at the New Africa Hotel.

Dr. Rebecca Balira from the National Institute for Medical Research (NIMR) for Sexual and Reproductive Health, Rights (SRHR) Alliance “Pamoja Tunaweza” said that 55,000 girls were expelled from school between 2003 and 2011 out of which a huge number were students from secondary schools and 0.9 % of those were from primary schools.

The findings from the survey they had conducted at the district level show that most of the stakeholders interviewed were in support of the re-entry policy but some were hesitant because of their moral beliefs, she said.

She mentioned some of the key milestones achieved in implementing the re-entry policy at national level as being: the ETP being translated into swahili (in 2010) to ensure smooth implementation at all levels of society, the Ministry of Education and Vocational Training preparing draft guidelines (in 2009) for the implementation of the re-entry policy once the approval of the reviewed ETP is complete and some of the NGOs at the grassroots (at district and ward levels) already engaging stakeholders on the issue.

Dr. Majaliwa Marwa, another presenter from UNFPA Tanzania, said that millions of young people have poor access to information especially with respect to sexual and reproductive health as data shows that about 23% of young women age 15–19 have already begun childbearing whereby 15% of them started having sex at the age of 15. He stressed the importance of comprehensive sex education coupled with appropriate access to Sexual Reproductive Health services in positively transforming young people’s lives.

He suggested some of the key steps that need to be taken as being: reviewing and amending the existing laws and policies on age of consent, child protection and teacher codes of conduct and initiating and scaling up age, gender and culturally-appropriate sex education in primary schools.

The discussants were; Chimpaye Marango from the Ministry of Education and

Vocational Training (MOEVT),and from the Ministry of Health and Social welfare (MOHSW) there were Dr. Georgina Msemo and Dr Elizabeth Mapella

The discussant from the MOEVT admitted that the ETP and its guidelines are currently being reviewed and will be launched soon for operationalisation. She said after the policy was reviewed about 80 people were tasked to go around to stakeholders to get their views on the re-entry policy. She expressed surprise, however, that from the presentations, there was information that some people in schools who were not aware of the policy.

The discussant from the ministry of health pointed out that the views of the parents were not taken on board during the survey something that poses a challenge for the implementation re-entry policy if all stakeholders are not involved.

She also stressed the importance of collecting the views of the boys who impregnated these young girls to improve the understanding of the problem. She assured the audience that the government including the president himself is committed to operationalise.

The Citizen’s Budget document is issued to improve citizen’s access to budgetary information
with the objective of promoting accountability and transparency in public finance management.
It presents the Government budget in a simple language, highlighting its important features and
making it easy for a common person to understand and grasp the budget. The policies and
programmes reflected in the Government budget affect the lives of all citizens and therefore it is
important for them to fully comprehend its implications.

To read the document click here.

To read the Budget Bill, 2014, click 1 and 2

Kindly be informed that Policy Forum Secretariat office will be closed for Christmas and New Year Holiday from 22nd December 2014 to 13th January 2015.

The office will be opened and resume its regular activities and operations on Tuesday 13th January 2015.               

We apologize in advance for any inconvenience that this may cause.                         

We encourage you all to send us any pressing/urgent matters to the PF Secretariat Office by end day tomorrow (Friday evening) by email (info@policyforum.or.tz), phone:  +255 22 2780200

All other matters will be addressed when our office will be re-opened.

We would like to wish a Happy Holiday Season to you all.

Following the recent tabling and discussion of the Controller and Auditor General's (CAG) report on the Independent Power Tanzania Limited (IPTL) Tegeta Escrow Account (TEA) in parliament and the subsequent public outcry regarding revelations of unprecedented fraud, we, the undersigned Civil Society Organizations (CSOs)  wish to communicate our joint position on the controversy. We have reviewed the National Audit Office (NAO) report to the Public Accounts Committee (PAC), PAC’s report to the National Assembly on November 26th 2014, and numerous related documents, and OBSERVE as follows on the shortfalls of our institutions to exercise their functions transparently and accountably:

1. That Pan Africa Power Solutions Tanzania’s (PAP) acquisition of Mechmar’s 70 percent of IPTL’s shares was fraudulent and the subsequent transfer of TEA funds to IPTL/PAP of at least US$ 120 million was illegal and involved the collusion of senior government officials, Tanesco’s Board of Directors, the Business Registrations and Licensing Agency (BRELA) and private banks.

2. That the withdrawal of the money from the TEA in 2013 was the culmination of two decades of energy policy capture by private interests and corruption involving IPTL, Tanesco and the Ministry of Energy and Minerals (MEM).  

3. That the process of arbitration through the International Centre for the Settlement of Investment Disputes (ICSID) initiated by TANESCO in 2008 to resolve the claimed over-payment of capacity charges throughout the IPTL contract period (2002 to date) was systematically sabotaged by PAP and IPTL’s former minority shareholders VIP Engineering and Marketing (VIP) through the manipulation of Tanzania’s legal system, leaving the cost of IPTL power an unresolved issue.

4. The notion that TEA ‘is not public money’ is an argument put forward by the apologists of IPTL/PAP/VIP to confuse informed discussion of the basic issues at stake.

WE COMMEND the CAG and PAC for their crucial role in monitoring and holding to account public officials for their actions and decisions related to the IPTL/TEA scam by auditing related financial statements and demanding explanations and justifications from those concerned. In a democratic system, however, this is not adequate. When these explanations and justifications from the duty-bearers are found to be unsatisfactory, parliament has an obligation to ensure the initiation of corrective action by using the full extent of their legislative and constitutional powers.

WE ARE CONCERNED about the ease with which the TEA funds were transferred from the Bank of Tanzania (BOT) to private banks, and subsequently to individual bank accounts. These acts manifest a lack of due diligence on the part of the parties concerned. We highlight below numerous related concerns:

•    BRELA: The CAG report shows that there were clearly lapses with the due diligence processes at the Business Registration and Licensing Authority (BRELA) concerning the transfer of Mechmar’s notional 70% share ownership of IPTL. Owners of the mysterious entity Piper Link, PAP and its mysterious shareholder Simba Trust, all crucial players in the scam, should have been detected through background checks or deterred had they known their names would have been made publicly accessible.

•    Banks, due diligence and suspicion of money laundering: Under the Anti-Money Laundering Act of 2006, all banks and financial institutions should take reasonable due diligence measures to identify politically exposed persons, to establish the source of their funds and to monitor them. The fact that senior politicians, some at the centre of previous corruption scandals, opened accounts at Mkombozi Bank and were paid large amounts shows that normal customer monitoring procedures, including money laundering risks, were not adhered to. The transfer of US$65 million from Mkombozi Bank to a bank in the Netherlands also strongly suggests abuse of normal ‘know your customer’ procedures. In turn, Stanbic Bank stands accused of complicity in the payment of large amounts of cash to PAP/IPTL beneficiaries on a single day. The fact that the PAC could not ascertain the names of others whose bank accounts were credited with suspiciously large amounts and that the Financial Intelligence Unit (FIU) was not notified about such transactions, also points to bank irregularities. Although the Bank of Tanzania took steps to indemnify itself against potential legal challenges related to the TEA, it failed to undertake its own due diligence of the case, relying on guarantees by interested parties.

•    Transparent contracting: Current pressure to make all energy sector contracts public must include contracts between government and private power producers, if Public-Private Partnerships (PPP) are not to be discredited.  There are now increased grounds for not only public disclosure in contracting but full participation of parliament in the contracting process, from tendering, performance and completion when it comes to joint venture agreements of this nature. Full public and parliamentary scrutiny and discussion of PPP contracts and contract implementation would have made it difficult for PAP and VIP to exploit the systemic weaknesses within BRELA, Tanesco and the Tanzania Revenue Authority (TRA).

•    The culture of impunity:  If those involved in this scandal are not held accountable for their abuse of power and the theft of public money, it will be a continuation of our systemic weaknesses related to prosecution of leaders shown to have been involved in corrupt practices, some of them repeat offenders. The public is growing increasingly offended by these acts of grand corruption, the manner in which those accused of corruption defend their actions, and the apparent impunity of those involved.  There is a risk that continued impunity will communicate the wrong messages, namely: 1) that it is risk-free to misappropriate public funds on a huge scale, and 2) the state has no moral authority to caution against wrongdoing.

In light of the above, we CALL UPON the Government to bring to book all those involved in the pillaging of the TEA for abuse of power and theft of public funds. In particular, we ask the Government to demand the immediate and transparent repayment of all escrow monies paid fraudulently to PAP, plus interest, and to implement Parliament’s recommendations to resolve the IPTL affair in the public interest, namely:

1. PCCB, police and other security agencies to take action against all those mentioned in the PAC report and others who will have been found culpable after further investigations;

2. Chairpersons and members of Parliamentary Committees implicated in the saga to be sanctioned;

3. Stanbic Bank, Mkombozi Bank and other financial institutions to be investigated for failures in due diligence and money laundering;

4. Review of PCCB Act to address grand corruption and economic sabotage;

5. Government to consider appropriating the IPTL plant;

6. Government to review all power generation contracts.

The IPTL scandal represents a serious crisis in the legitimacy of the Government of Tanzania that can only be resolved by strong leadership and decisive action to bring closure to the long-drawn out IPTL saga once and for all.

Signed:
1.    Policy Forum
2.    Tanzania Coalition on Debt and Development
3.    ACTIVISTA
4.    Tanzania Youth Vision Association
5.    SIKIKA
6.    Action Aid Tanzania
7.    HakiElimu
8.    Youth Partnership Countrywide

VAT is very crucial and one of the leading sources of revenue collection as compared to other sources of taxation payable by a large number of people and has to be made efficient as possible, it has been learnt.

Speaking at the Policy Forum Breakfast Debate when presenting on “An Analysis of the VAT and the Tax Administration Bill of 2014”, Mr. Moses Kulaba, a member of the Tanzania Tax Justice Coalition, cautioned that a cumbersome VAT system will make tax collection difficult and will have a negative impact in the expansion of the country’s investment sector.

Mr. Kulaba’s presentation was a CSO analysis on the two tax bills tabled in parliament recently. He said, however, that because one of the main areas of strength of the VAT bill is that it proposes categories of entities that would be eligible for tax exemption, it is clear that there is a possibility of significant reduction of VAT exemptions.

He went further to mention some of the weaknesses of the bill, for instance that it does not set a time limit for deferred payments, creating a loophole for businesses deferring from paying taxes for a longer period of time thereby exposing such revenues to risks of being lost.

For this weakness, he recommended thatit would add more value and reduce possibilities of revenue loss if the Bill stipulated the length and number of times VAT payment could be deferred.

He mentioned another weakness of the bill being no specified criteria  for granting exemptions for essentials such as education, health and agriculture, posing an avenue through which VAT revenues may be lost.

On the Tax Administration Bill of 2014, Mr. Moses Kulaba said that the bill aimed at creating a modern, effective, fair and transparent tax administration; simplifying, unify, and harmonizing tax procedures from various tax laws; and promoting voluntary tax compliance, fair tax governance and increasing tax revenue.

Kulaba articulated one of the weaknesses of the Tax Administration Bill as being that Section 46.-(1) provides for self-assessment to determine primary liability - filed tax returns. Though this may be convenient to the tax payer, it may reward dishonest tax payers, a phenomenon that is not unusual in Tanzania hence revenue losses

He mentioned the other weakness as being; Section 73.-(6) of the TAA bill suggests establishment of a separate Bank Account with sufficient funds for the purposes of tax refunds but there are no provisions to address how the account will be prudently managed to avoid possible mismanagement. There also questions on how the refunds will be accounted for transparently and what would be the basis or criteria for determining the sufficiency of the fund as the term “sufficient” is relative.

On her part, Mrs. Eileen Rafferty, the Advisor of Tax Modernization Programme at DFID,gave a comparison of the Tanzanian tax regime and the tax regime in UK.

She applauded the style of debate which aimed at drawing people together to discuss on the tax legislation process in Tanzania and said the initiative was a very positive one and that Tanzanians should use to push for change, acknowledging that she had never witnessed such a similar effort in the UK.

She said that the UK tax legislation process involves multiple stages of consultations whereby different stakeholders at various stages comment on the drafts before the bill is passed into law.

Mrs. Rafferty went on to say that just like in Tanzania, there is a perception in the UK that big companies do not pay enough tax and hence suggested greater transparency to properly portray a country’s tax picture.

During plenary, a participant from Tanzania Revenue Authority, Mr. Lupenja, admitted that the main reason why the TRA is not collecting enough tax is because of tax exemptions which for the past three years have increased from 2.3% to 4.6% of GDP leading to tax base erosion.

He further elaborated that tax exemptions are very crucial in any tax regime but if they are too numerous, they will not be administered properly and become harmful.

“Tanzanians do not have a culture of paying taxes,” he said, calling upon the government to instill such a culture so that people comply in paying taxes.

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