Dodoma — THE government should review removal
of exemption of withholding tax on rental charges on aircraft lease
paid to non-residents as it will hamper growth of the aviation industry.
Mr Freeman Mbowe (Hai - Chadema) said removal of the exemption would
also hurt the tourism industry as it would lead to increased airfares in
the country. "Airfares are prohibitive in Tanzania.
They are too high," he said in his contribution to the 2014/15 government budget unveiled here last week.
The government has proposed removal of exemption of withholding tax
on rental charges for aircraft lease paid to a non-resident by a person
engaged in air transport business to scale down exemptions estimated to
cost the nation between 1.4tr/- and 2.1tr/- annually in lost revenue.
However, Mr Mbowe said the move would be counterproductive in view of
efforts to boost tourism, currently the country's leading foreign
exchange earner.
Mr James Mbatia (Nominated) also spoke strongly against the idea of
removal of the exemption of withholding tax on rental charges on
aircraft, arguing that it would destabilize the aviation industry.
Tanzania needed to take deliberate measures to make the aviation
industry competitive so as to attract local and foreign investments, he
said.
He said while neighbouring countries, including Kenya, were taking
measures to reduce costs in the aviation industry, Tanzania was doing
just the opposite.
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