• by IPS Correspondents (dar es salaam)
• Sunday, December 18, 1994
• Inter Press Service

DAR ES SALAAM, Dic 18 (IPS) - THE NETHERLANDS FRIDAY SUSPENDED 17.64 MILLION DOLLARS IN DEVELOPMENT AID TO TANZANIA IN PROTEST AGAINST ALLEGATIONS OF RAMPANT TAX EVASION IN THE EAST AFRICAN COUNTRY.

THE FROZEN AMOUNT IS PART OF THE 52.94-MILLION-DOLLAR ANNUAL BILATERAL AID EARMARKED BY THE HAGUE TO TANZANIA FOR 1995.

"WE HAVE SUSPENDED THE AID PENDING THOROUGH INVESTIGATIONS BY THE TANZANIA GOVERNMENT ON WIDESPREAD TAX EVASION AND EXEMPTIONS OF IMPORT DUTIES," SAID AN OFFICIAL OF THE NETHERLANDS EMBASSY HERE.

"WE MAY RESUME OUR BILATERAL COOPERATION IF WE ARE SATISFIED WITH THE RESULTS OF THE INVESTIGATIONS BEING CONDUCTED BY THE TANZANIA GOVERNMENT," SAID BERNHARD BERENDSEN.

THE NETHERLANDS BECAME THE THIRD EUROPEAN NATION TO WITHHOLD FINANCIAL SUPPORT TO TANZANIA. LAST MONTH, NORWAY AND SWEDEN SUSPENDED 28.5 MILLION DOLLARS TO PROTEST THE TAX EVASION, DUBIOUS EXEMPTIONS AND MISMANAGEMENT OF DONOR FUNDS.

THE DECISION TO KEEP BACK NETHERLANDS' DEVELOPMENT AID WAS REACHED AT A CONSULTATIVE MEETING HERE BY SENIOR OFFICIALS OF THE TWO GOVERNMENTS.

AT THE JOINT MEETING, THE NETHERLANDS GOVERNMENT EMPHASISED IT WOULD RESUME BILATERAL COOPERATION WITH TANZANIA AFTER A CONSULTATIVE GROUP DONOR MEETING IN PARIS, FRANCE, SCHEDULED FOR THE END OF FEBRUARY.

AT THE PARIS CLUB MEETING, DONORS ARE EXPECTED TO EVALUATE MEASURES TAKEN BY TANZANIA TO CURB TAX EVASION, IMPORT EXEMPTIONS AND MISMANAGEMENT OF AID FUNDS.

THE DONOR DECISION TO FREEZE AID TO TANZANIA FOLLOWED THE INABILITY OF PRESIDENT ALI HASSAN MWINYI'S GOVERNMENT TO COLLECT TAXES, SOMETHING WHICH HAS BEEN CAUSING THE COUNTRY TO LOSE AN ESTIMATED 125 MILLION DOLLARS EVERY YEAR.

IN NOVEMBER, MWINYI APPOINTED A COMMITTEE TO INVESTIGATE THE TAX EVASION AND IMPORT EXEMPTIONS FOLLOWING DONOR PRESSURE ON THE POOR PERFORMANCE OF TANZANIA'S ECONOMY.

THE PRESSURE LED TO MWINYI'S DISSOLUTION OF HIS CABINET IN WHICH HE APPOINTED A NEW PRIME MINISTER AND MINISTER FOR FINANCE.

© Inter Press Service (2014) — All Rights Reserved. Original source: Inter Press Service

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