Multinationals should be made transparent

At the current exchange rate of about Sh1,600 to the dollar, that amounts to nearly Sh2 trillion. That is the revenue loss that Tanzania incurs every year through corporate malpractices by mostly multinational companies operating in the country.

In a poor country like Tanzania where most people can hardly afford two decent meals a day and the government has difficulties in funding its budget, $1.25 billion is quite a lot of money.

At the current exchange rate of about Sh1,600 to the dollar, that amounts to nearly Sh2 trillion. That is the revenue loss that Tanzania incurs every year through corporate malpractices by mostly multinational companies operating in the country.

The money, which is lost through corporate tax avoidance, evasion and corruption, is equivalent to five per cent of the country’s gross domestic product (GDP). For a government whose annual budget is yet to reach Sh20 trillion, a loss of between 10-11 per cent of revenues is quite huge.

The financing of the budget still depends heavily on foreign handouts that are not only unpredictable but also cost dearly in terms of the conditionalities to get the aid. If the money could be tapped, it could greatly ease the funding of many key ministries whose budgets in the current financial year have been less than a trillion shillings.

Most importantly, Tanzania could use the money to improve the currently wanting provision of basic services and construct key social and economic infrastructure such as roads, schools and health facilities.

 Source:http://www.thecitizen.co.tz/oped/Multinationals-should-be-made-transparent/-/1840568/2039524/-/i02v64/-/index.html