Minister for Finance and Planning, Dr Philip Mpango
The announcement was made yesterday in Parliament by Deputy
Minister for Finance and Planning, Dr Ashatu Kijaji who said the lowered
rate comes to effect this July when the new financial year starts.
She was responding to a question by CCM special seats MP Hawa
Mchafu who wanted an update on government’s pledge to lower PAYE to a
single digit.
Dr Kijaji reminded the House that the government has been reducing
PAYE from time to time, in 2006/07 the PAYE was at 18 per cent it was
lowered to 15 per cent in 2008/09, then 14 per cent in 2010/11 and then
down to 12 per cent in 2012/13 and following the drop last year it now
stands at 11 per cent.
“However, those who are in the top ladder of the workforce and take
home hefty packages will continue to be deducted 30 per cent of their
salaries in PAYE,” clarified the deputy minister.
Responding to a question by Mtambile MP, Masoud Abdallah Salim
(CUF) who queried why the government is failing to disburse pension
allowances that reflect the current costs of living, Dr Kijaji said in
July last year, the government increased monthly pension allowances by
100 per cent from 50,114,43/- to 100,125/-.
“The government has managed to increase the allowance five times
since 2004, when the retirees were being paid 21, 605/-” Dr Kijaji
pointed out.
She also reassured public servants that the government is committed
to improving welfare of retired civil servants by increasing their
monthly pension allowance this dependant on the country’s economic
growth.
While campaigning for office last year, President John Magufuli
promised that he would reduce PAYE tax charged on employees’ salaries in
a bid to improve workers’ welfare. However despite the reduction, the
pledged single digit has not been achieved.
Civil servant and private sector employees, through their trade
unions, have been at loggerheads with the government with the former
pushing for a substantial reduction of PAYE.
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