BUSINESS & THE ECONOMY

The Citizen (November 8th) reported that Tanzania lost at least $33 million (about TShs 40 billion) in uncollected non-tax forest revenue in the fiscal year 2006/07 as a result of the shortage of staff and supporting resources for the collection and prevention of illegal logging. The Head of Cooperation at the Finnish Embassy told a recent general budget review meeting in Dar es Salaam that the low rates of investment and expenditure on forest revenue collection and forest law enforcement also limited the revenue collection from forestry.

The non-tax revenue in forestry consists of registration fees, forest royalty fees, export permits, and penalties for forest law violations.

In royalties of timber sales alone, which account for about 93% of all forestry revenue collected, the Government loses around $23.8 million (TShs32 billion) annually.
Development partners urged the Government to put its house in order and strengthen its revenue collection mechanisms. They said it is incomprehensible that Tanzania should fail to collect so much revenue and still continue to depend on foreign aid to fund its budget.

The Ministry of Natural Resources and Tourism budget was cut by 13.8% for 2007/08 which has directly affected the ministry’s ability to effectively manage the forest resources and the revenue collection.
However, although the forest sector’s contribution to revenue collection increased from TShs 4 billion in 2001 to about TShs 15.2 billion in 2006, Government expenditure on forest activities particularly in relation to revenue collection decreased (Thank you Jerry Jones for sending this – Editor)

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