PAC urges payment plan for debt to pension funds

 

THE Parliamentary Committee on Public Accounts (PAC) has tasked the government to immediately submit before the House a detailed plan on payment of debts amounting to over 1.5 trillion/- it owes pension funds.

The committee hinted that government’s efforts in clearing the debts - loans and employees’ contributions were disappointing thus affecting their operations. 

 

In its report on Controller and Auditor General (CAG) covering 2014 and 2015, the committee demanded the government to submit a quarterly report on how it was servicing the loans.

PAC Chairperson, Ms Naghenjwa Kaboyoka (Same East-CHADEMA), told the House that pension funds’ future seemed bleak should the government fail to take immediate measure to clear the debts.

“The government and its institutions at times have been acquiring loans from pension funds to implement various projects but have been reluctant in repaying such loans,” she said, calling on political will and determination to clear the debts.

Giving the details on the loans, the committee chairperson said the government owes NSSF 996.8bn/-, PPF (70.8bn/-), LAPF (53.6bn/-) and PSPF (348bn/-). The government also owes the National Health Insurance Fund (NHIF) about 76.9bn/-.

She faulted the government for taking too long to verify the loans, saying delay in clearing the debts places the funds into hard times and inability to pay pensions due to credit risks.

The committee demanded the government to implement its budgetary pledge made this financial year of paying PSPF 150bn/-. Ms Kaboyoka also informed the House that the committee resolved that the state should commit noncash bond amounting to 2.9 trillion/- for paying PSPF pensioners who retired before July 1, 1999.

“PSPF should not be given new directives on development projects’ implementation. It should neither issue loan to the government at this transition period until it stabilises,” she told the House.

On tax appeals and objections, the committee advised the government to engage competent and patriotic experts to find amicable solutions for the tax cases currently pending at the courts.

She said that the Tanzania Revenue Authority (TRA) fails to properly collect revenues due to increase of tax appeals, advising relevant authorities to work round the clock to ensure such cases are disposed.

In the financial year ending June 2014, the CAG unveiled several shortcomings which denied the government revenue, including unresolved tax appeals on cases worth over 1.7tri/-. According to the report, the amount had jumped to 6.8tri/- in the financial year ending June 2015.

The committee called on the government to allocate adequate budget for Tax Revenue Appeals Tribunal and Tax Revenue Appeals Board to enable it timely give ruling on tax related cases.

PAC further commended the government for bringing down tax exemption from 1.8tril/- recorded in financial year ending June 2014 to 1.6tri/- in June 2015.

However, the Bunge team faulted the state for failing to honour CAG and experts recommendation that demanded tax exemptions to be less than one per cent of the gross domestic product (GDP).

Tanzania’s GDP was estimated to be 94.6tri/- in 2015, up from 79.4tril/- in 2014 after rebasing. Meanwhile, the PAC announced that it has formed a sub-committee to examine the multi-billion shilling joint project to develop the Kigamboni Satellite City. NSSF management appeared before PAC two weeks ago and was questioned on a number of audit queries raised by the CAG, including the project.

The CAG had indicated that the pension fund entered into a joint venture with Azimio Housing Estates to form a Special Purpose Vehicle Company, Hifadhi Builders Limited.

Under the contract, Azimio was responsible to develop 20,000 acres of land situated at Rasi Dege, Kigamboni of which NSSF holds 45 per cent while Azimio has 55 per cent shares.

However, the CAG noted that only 300 acres could be counted for, advising NSSF management to confirm from the Ministry of Lands, Housing and Human Settlement Development if Azimio owns the remaining 19,700 acres in the area to avoid disputes. Ms Kaboyoka told the House that the sub-committee will start its task after the postponement of the ongoing parliamentary session.

“The committee will also study the contract, establish the existence of 19,700 acres questioned by CAG and review the project implementation report,” she noted. 

The Local Authorities Accounts Committee (LAAC) also submitted its views on CAG report which, among others, revealed a number of flaws in public funds management, poor project executions and violation of procurement law.

The committee’s report read by its chairman, Mr Vedasto Ngombale-Mwiru, also faulted the councils for failing to allocate 10 per cent from own sources for Youth and Women Development. He called on the House to come up with the best way that would help hold authorities responsible should they fail to implement the directive.

Mr Ngombale-Mwiru pressed the government to take legal measures against government officials who delay development project execution and those embezzling public funds.