Tanzania's Revenue Authority (TRA) is on a roll! They've smashed their first-quarter tax target for the 2025/26 financial year, collecting a whopping 8.97 trillion Tanzanian shillings (tri/-). This impressive feat represents 106.3% of their quarterly goal, and it's all thanks to a boost in business and investment.
The TRA's quarterly report reveals a consistent upward trend from July to September. Each month, collections exceeded the set targets.
- In July, they achieved 104.1% of their target, collecting 2.68 tri/- against a goal of 2.57 tri/-.
- August saw the highest performance of the quarter, with 2.82 tri/- collected against a target of 2.56 tri/-, equating to 110%.
- The trend continued in September, with the TRA collecting 3.47 tri/- against a target of 3.31 tri/-, or 105%.
Elijah Mwandubya, the Deputy Permanent Secretary in the Ministry of Finance, highlighted that this success stems from ongoing reforms. These reforms aim to improve efficiency, broaden the tax base, and strengthen digital revenue systems across the nation.
But here's where it gets interesting: The government attributes this achievement to three key strategies: expanding the taxpayer register, improving compliance through digital platforms, and enhancing the professionalism of tax officers. These factors have significantly boosted voluntary tax payments and reduced revenue leakage.
In this first quarter, the 8.97 tri/- collected represents 106.3% of the quarterly target. This was accomplished without introducing new tax rates or increasing existing ones – a testament to the effectiveness of their strategies.
This strong revenue performance allows the government to fund a larger portion of its development agenda through internal capacity, rather than relying on additional tax burdens for businesses.
The total budget for 2025/26 is set at 56.49 tri/-. 68.3% of this, or 38.6 tri/-, is allocated to recurrent expenditure, covering wages, debt servicing, and other operational costs. Development expenditure accounts for 29%, or 16.4 tri/-, of the budget.
The government primarily finances its budget through domestic revenue, contributing 38.9 tri/-. The remaining funds come from external sources, including grants, concessional loans, and commercial loans.
Mr. Mwandubya emphasized that the government doesn't plan to impose additional taxes on the business community. The recent results demonstrate that efficiency reforms can yield better results than simply raising tax rates.
He stated that the potential for increasing domestic revenue lies in expanding the taxpayer base, supporting business operations, and maintaining an efficient and transparent tax system.
The increase in revenue collection also stems from the TRA's workforce, which has undergone intensive training to improve audit quality, enforcement, and modern risk-based revenue management. This shift has strengthened oversight and broadened the tax net.
The government will continue investing in digital infrastructure and administrative reforms to sustain robust revenue performance and foster private sector–led growth.
During a recent event, the Deputy PS awarded 561 graduates in various disciplines, including certificates, diplomas, degrees, and master’s qualifications in tax collection, information security, and customs management.
What do you think? Do you agree that efficiency reforms are a better approach than raising taxes? Share your thoughts in the comments below!
