Controller and Auditor General Mussa Assad briefs the media in Dodoma yesterday on the 2013/14 audit report compiled by his office.
Dar es Salaam. A handful of influential people are stealing taxpayers’ money and depriving millions of Tanzanians of quality social services.
Controller and Auditor General Mussa Assad revealed the scam yesterday as he presented his Audit Report for the 2013/14 financial year in Parliament. Billions of poor taxpayers’ money went to ghost workers and to retired employees who had been working in diplomatic missions and who continue to live in the countries they were posted to. Some of it was stolen through tenders that were awarded without following the right procedures and through the misuse of tax incentives by some multinational firms.
The review was based on an analysis of a sample of 176 institutions that report directly to the Central Government. Some 163 of those institutions are under the Local Government Authorities. There were also 775 development projects. And Tanzania lost Sh22.33 billion due to misuse of tax exemptions, according to Prof Assad, who succeeded Mr Ludovick Utouh in December last year.
This was the case when Geita Gold Mine and Resolute Tanzania decided to import oil using exempted documents but ended up giving the petroleum products to their contractors, who did not qualify for the incentive.
In the same vein, the country lost Sh392 million when the Arusha-based Kiliwarrior Expeditions Limited received an exemption to import vehicles that ended up not being used for the purpose they were intended. “Another Sh53.4 million was lost due to misuse of tax exemptions by Karatu-based Kilemakyaro Mountain Lodges,” said Prof Assad. “I advise the government to fill these loopholes by making routine follow-ups on how tax exemptions are being utilised.”
Prof Assad is a Certified Professional Accountant who, prior to his appointment as CAG, taught at the University of Dar es Salaam’s Business School. He gave nine of the 176 audited Central Government institutions and some 13 of the 163 LGAs a Qualified (dirty) Opinion, signalling that he had reservations about the way they conducted their financial transactions. In auditing, a qualified opinion is offered when an independent auditor gets the impression that the audited financial statements do not reflect a fair view of the transactions. An Unqualified Opinion is essentially a Clean Bill of Health and means that the audited institution has presented its financial statements fairly.
Accompanied by the chairperson of the Public Accounts Committee, Ms Amina Mwidawa (CUF-Special Seats), Local Authorities’ Accounts Committee Chairman Rajab Mbarouk and Chairperson for the Parliamentary Budget Committee Kidawa Saleh (Special Seats, CCM), Prof Assad said the audited LGAs and Central Government institutions made transactions totalling Sh4.4 billion and Sh4.6 billion respectively with companies that did not issue receipts generated through Electronic Fiscal Devices (EFDs). This denied the government an opportunity to collect the right amount of tax. Prof Assad said: “My audit has also established that former government employees, including those who have died, those who resigned and those who have retired, are still receiving salaries through their accounts. Health insurance, Pay As You Earn and social security contributions are still being deducted from these salaries.”
Tanzania lost some Sh1.01 billion in salaries to ghost workers while another Sh845 million was paid to pension funds, health insurance schemes, financial institutions and to Tanzania Revenue Authority (TRA) from these people’s salaries.
A total of Sh543.797 million was paid to Tanzania’s embassies and high commissions in Kinshasa in the Democratic Republic of Congo, Maputo in Mozambique, Ottawa in Canada and in Washington DC in the United States. “I advise that instead of paying Foreign Service Allowance to retirees, the ministry of Foreign Affairs and International Cooperation should consider the same amount to facilitate transportation of personal effects,” he said.
A total of Sh1.889 trillion was not disbursed for development activities to Central Government institutions as expected in the 2013/2014 budget while another Sh312.04 billion, meant for development expenditure at LGA level, was not disbursed that year.
Some more billions of taxpayers’ money were lost through tenders without following the proper bidding process. Some LGAs and Central Government Authorities paid more than the amounts that were prescribed on the contracts while some procurements were conducted outside the agreed plan for the financial year.
As for some audited public institutions, the National Housing Corporation issued Sh1.75 billion in tenders using a non-competitive bidding procedure and this led to only one company being picked to do the job. The Ngorongoro Conservation Authority issued a Sh2.3 billion tender on restrictive procedur–meaning that only a selected few bidders were allowed–and this without proper reasons.
