Employers Against Skills Uplifting Tax

The Citizen (Dar es Salaam)

Rosemary Mirondo

25 June 2011

Tanzanian employers are up in arms over what they see as the government’s attempt to neglect the human resource development role and pass it to the private sector, a move they argue would lower the country’s business competitiveness in the region.

The Association of Tanzania Employers (ATE) chairman, Mr Cornelius Kariwa, said the six per cent Skill and Development (SDL) tax on employers should be reviewed because it was not yielding the desired results for quantity and quality skills development.

Mr Kariwa said the government could not run away from its cardinal responsibility to use other taxes other than SDL to invest in general education of the population if it expected to compete with other countries in the job market.

He was speaking yesterday during a high level conference and ATE’s annual general meeting held at the International Labour Organisation offices in Dar es Salaam.

The conference was attended by the minister for Labour and Employment Ms Gaudencia Kabaka as chief guest.

Mr Kariwa noted that with the high charges against Kenya’s 2 per cent, while Uganda and Rwanda do not charge such fees, the government was adding undue pressure and “hidden” cost of doing business on investors and locals businesses.

“We want this system reviewed because despite the high charges employers are still forced to use their own resources and funds to train employees to match the required market skills,” said Mr Kariwa, who added that the SDL tax should be brought down to 2 per cent.

He said ATE also wants members to be considered for rebates and a voucher scheme to encourage those who subscribed to NACTE’s standard’s policy to lower the cost of training.

He said at the moment, the 4 per cent SDL that is to be given to Higher Education Students Loans Board and the 2 per cent that goes to Treasury, would be subject to abuse by the authorities. Meanwhile, Ms Kabaka said for the local economy to be strong, diversified, resilient, and competitive, employers need to invest much in education and equip employees with requisite knowledge and skills.

“The government is committed in this endeavor and has been taking various measures to improve human capital development ranging from legal to policy interventions,” he said.

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