01 — OverviewExecutive Summary
Part I of this series showed that Tanzania's government revenue and spending have both grown more than thirty-fold since 2000, and that spending has shifted decisively toward development and debt service. This report turns back to the revenue side of the ledger for a closer look, using the same 26-year run of Ministry of Finance monthly data (IMF format) — but this time tracking year-on-year growth for every single year from 2001 to 2025, and breaking tax revenue down into its component parts: import duty, VAT/excise on domestic goods, income tax, and other taxes, plus a separate look at non-tax and local-government (LGA) revenue.
The headline finding from Part I — revenue growing thirty-fold — masks a much bumpier reality underneath. Growth has not been a smooth upward line; it has stumbled sharply in at least four identifiable periods, each tied to a recognisable economic shock. And beneath the aggregate numbers, the internal composition of the tax base has shifted in ways that matter: Tanzania is taxing income more and imports somewhat less than it did two decades ago, even though indirect taxes still supply more than half of all tax revenue. Five findings frame this report.
- Revenue growth has been volatile, not smooth. Growth fell below 10% year-on-year in four distinct episodes — 2009, 2019, 2020-2021, and 2023 — each aligned with a recognisable economic shock (the global financial crisis, aggressive tax enforcement, COVID-19, and a post-boom slowdown respectively).
- Income tax is the fastest-growing tax source. Its share of total tax revenue rose from 25.8% (2000-2004) to 36.2% (2020-2024) — the clearest sign of a genuinely broadening, formalising tax base.
- Import duty's long decline has partly reversed. Its share of tax revenue fell from 41.9% to a low of 29.4% (2015-2019), before climbing back to 36.4% (2020-2024), plausibly reflecting higher global commodity prices and capital-goods imports for infrastructure projects.
- Indirect taxation still dominates, but less than before. Import duty and VAT/excise combined still supply 51-65% of all tax revenue across every period studied — a structural feature of the tax system that has softened only gradually.
- Non-tax revenue has been the fastest-growing revenue category of all. It grew roughly 40-fold between 2000-2004 and 2020-2024 — faster than tax revenue itself (roughly 20-fold) — with local-government (LGA) own-source revenue, first captured distinctly in the data around 2010/2011, now contributing about 21% of the total.
Read this alongside TICGL's flagship Dira 2050 policy-gaps analysis
A tax base that still leans heavily on indirect taxes, and revenue growth that repeatedly stumbles when the global or domestic economy hits a shock, are both direct inputs into how reliably Tanzania can fund the investment Dira 2050 requires. TICGL/TERI recommends reading this report alongside the Dira 2050 policy-gaps analysis, and alongside Part I of this series on the expenditure side of the budget.
Read: What's Next for Tanzania's Economy? The Policy Gaps Keeping $1 Trillion Out of Reach by 2050 →About TERI — TICGL's Research Institute
This report was produced under the Tanzania Economic Research Institute (TERI), TICGL's dedicated research arm covering public finance, fiscal policy, and Tanzania's broader economic development. It is the second in a two-part series built from the same 26-year Ministry of Finance dataset used in Part I — this time isolating the revenue side for a year-on-year growth analysis and a detailed breakdown of tax composition. It forms part of TERI's wider Tanzania Works: The Political Economy of Shared Prosperity series, produced to be adapted directly into government, parliamentary, and development-partner policy briefs.
Visit TERI — teri.ticgl.com →02 — At a GlanceKey Numbers From the Revenue & Tax Analysis
Revenue & Tax Revenue Growth, Year-on-Year (2001-2025)
Source: TICGL/TERI analysis of Ministry of Finance, Government Budgetary Operations data (IMF format), monthly series aggregated to annual totals, year-on-year % change.
03 — MethodologyData, Method and Why This Matters Now
Part I of this series aggregated monthly data into five-year period averages to reveal the long-run structural shift in spending. This report keeps that period-average lens for tax composition, but adds a year-by-year view specifically for revenue growth, since the timing of growth shocks — not just their existence — is itself informative about what causes them.
Monthly revenue data (total revenue, tax revenue, and its components: import duty, domestic VAT/excise, income tax, and other taxes, plus non-tax revenue and LGA own-source revenue) were summed into annual totals for each of the 26 complete calendar years, 2000-2025. Two views are then built from these annual totals: a year-on-year percentage-growth series for every year from 2001 to 2025 (to identify growth shocks), and five-year period averages — 2000-2004 through 2020-2024 — for the compositional tables (to identify structural shifts in what is taxed). All monetary figures are presented in billions of Tanzanian Shillings (TZS billion).
Two things make a dedicated revenue-side analysis useful now. First, Part I already showed that expenditure growth has outpaced domestic revenue in most years — understanding exactly which revenue sources are most exposed to shocks (and which have grown most reliably) matters directly for that financing gap. Second, the shift toward income tax and non-tax revenue, if sustained, has real implications for tax fairness and for how exposed government revenue is to global commodity-price and trade-volume swings that hit import duty hardest.
1. Revenue Growth Has Been Volatile, Not Smooth
Four clear shocks in 26 yearsAveraged over five-year periods, Tanzania's revenue growth looks steady. Viewed year by year, it is anything but — four distinct episodes of sharply slower growth stand out clearly against the surrounding years.
| Year | Total Revenue Growth | Tax Revenue Growth | Year | Total Revenue Growth | Tax Revenue Growth |
|---|---|---|---|---|---|
| 2001 | +13.9% | +13.7% | 2014 | +20.0% | +13.9% |
| 2002 | +15.5% | +17.7% | 2015 | +15.5% | +12.8% |
| 2003 | +18.3% | +18.6% | 2016 | +9.7% | +23.3% |
| 2004 | +20.9% | +22.2% | 2017 | +16.7% | +7.7% |
| 2005 | +18.7% | +18.4% | 2018 | +16.0% | +4.6% |
| 2006 | +26.3% | +26.0% | 2019 | +8.8% | +9.1% |
| 2007 | +31.8% | +34.7% | 2020 | +4.1% | +4.3% |
| 2008 | +26.3% | +26.4% | 2021 | +5.7% | +5.3% |
| 2009 | +8.8% | +10.9% | 2022 | +17.8% | +15.6% |
| 2010 | +16.2% | +14.5% | 2023 | +5.9% | +7.8% |
| 2011 | +25.1% | +22.7% | 2024 | +18.4% | +17.5% |
| 2012 | +24.4% | +22.5% | 2025 | +16.7% | +19.5% |
| 2013 | +12.7% | +18.9% |
Source: TICGL/TERI analysis of Ministry of Finance, Government Budgetary Operations data (IMF format), year-on-year % change from annual totals.
2009 — the global financial crisis
Revenue growth fell to 8.8% in 2009, down from more than 25% in each of the two preceding years. This lines up closely with the 2008/09 global financial crisis, which disrupted international trade, commodity prices, and foreign-exchange flows — all of which feed directly into import duty and corporate income tax collections.
2019 — the enforcement slowdown
Growth slowed to 8.8% again in 2019, continuing a decline from 2017-2018. This period is widely associated with complaints from the business community about aggressive tax enforcement and stringent compliance measures, which some economic commentators believed dampened investment sentiment and voluntary compliance in the short term.
2020-2021 — COVID-19
Growth fell to 4.1% and 5.7% respectively — the two weakest years in the entire 26-year series — tracking the direct impact of the COVID-19 pandemic on tourism, international trade, and domestic production.
2023 — a post-boom cooldown
Growth slowed again to 5.9%, after a strong 17.8% in 2022. This could reflect a statistical "base effect" following the prior year's high growth, or a genuinely tougher economic and business environment during that period — the data alone cannot fully distinguish between the two explanations.
These explanations are economically-informed interpretations consistent with well-known historical and economic events, not statistical proof of causation drawn from budget data alone. Confirming them with confidence would require comparing this revenue data against GDP growth, inflation, and international commodity-price data for the corresponding years.
2. Inside Tax Revenue: A Slow Shift Toward Income Tax
Structural, multi-decade shiftUnlike Part I's revenue tables (which showed each tax as a share of total government revenue), this section looks purely inside tax revenue itself: out of every TZS 100 of tax collected, how much comes from where.
| Period | Import Duty | VAT/Excise (Domestic) | Income Tax | Other Taxes |
|---|---|---|---|---|
| 2000-2004 | 41.9% | 22.6% | 25.8% | 9.7% |
| 2005-2009 | 38.6% | 21.9% | 29.5% | 10.0% |
| 2010-2014 | 32.7% | 19.2% | 36.1% | 12.0% |
| 2015-2019 | 29.4% | 21.7% | 33.9% | 14.9% |
| 2020-2024 | 36.4% | 19.3% | 36.2% | 8.1% |
Source: TICGL/TERI analysis of Ministry of Finance, Government Budgetary Operations data (IMF format).
Composition of Tax Revenue, 2000-2025
Tax Revenue Composition by Five-Year Period
Import duty's share of tax revenue fell steadily from 41.9% (2000-2004) to a low of 29.4% (2015-2019) — consistent with East African Community Common External Tariff harmonisation lowering some intra-regional rates, and with growing domestic production reducing reliance on imports. It then climbed back to 36.4% (2020-2024), plausibly linked to higher global commodity prices (notably fuel) and a surge in capital-goods imports for major development projects during that period.
Income tax grew faster than any other tax source, from 25.8% to 36.2% of tax revenue — clear evidence of a broadening formal taxpayer base, driven by Taxpayer Identification Number (TIN) registration, TRA's electronic systems (including the Electronic Fiscal Device, EFD), and growth in formal-sector employment and registered companies.
- The rise of income tax is a genuine formalisation success worth protecting and extending through continued investment in TRA's digital systems.
- Import duty's rebound since 2020 is not necessarily a policy reversal — it may simply reflect global price cycles and one-off capital-goods import surges tied to specific infrastructure projects, and is worth watching rather than over-interpreting.
3. Direct vs. Indirect Taxation: Who Really Bears the Burden?
Indirect still dominant, direct share risingThis distinction matters economically. Direct tax (income tax) generally tracks a taxpayer's actual ability to pay (progressive), while indirect tax (import duty, VAT, excise) tends to affect everyone roughly equally regardless of income (somewhat regressive).
| Period | Direct (Income Tax) | Indirect (Import + VAT/Excise) | Other Taxes |
|---|---|---|---|
| 2000-2004 | 25.8% | 64.5% | 9.7% |
| 2005-2009 | 29.5% | 60.5% | 10.0% |
| 2010-2014 | 36.1% | 51.9% | 12.0% |
| 2015-2019 | 33.9% | 51.1% | 14.9% |
| 2020-2024 | 36.2% | 55.7% | 8.1% |
Source: TICGL/TERI analysis of Ministry of Finance, Government Budgetary Operations data (IMF format). "Other taxes" (mainly Inland Revenue, e.g. stamp duty, Skills Development Levy) is not split between direct and indirect since it is a mixed category.
Direct vs. Indirect Taxation, 2000-2025
For two decades, Tanzania's tax system has continued to rely more heavily on indirect taxation — 51-65% of all tax revenue across every period — even as the direct-tax share has climbed steadily from about a quarter to nearly a third of tax revenue. That climb is generally viewed as economically positive, since it reflects a broadening base of formal taxpayers rather than continued reliance on consumption taxes, which weigh more heavily, as a share of income, on lower-income households.
The modest increase in the indirect share between 2015-2019 (51.1%) and 2020-2024 (55.7%) is worth monitoring: if it continues, it could signal a partial reversal of the long-run move toward direct taxation.
- Continuing to grow the direct-tax share would be a meaningful equity improvement, since indirect taxes fall disproportionately on lower-income households as a share of what they earn.
- The recent uptick in the indirect share deserves a dedicated follow-up once 2025-2026 data is fully available, to confirm whether it is a temporary import-driven blip or a genuine reversal.
4. Non-Tax Revenue and the Rise of Local Government Collections
Fastest-growing revenue categoryWhile tax revenue has grown impressively, non-tax revenue — dividends from public enterprises, natural-resource royalties, administrative fees, and local-government own sources — has grown even faster, and is quietly becoming a meaningful pillar of government finance.
| Period | Avg. Non-Tax Revenue (TZS bn/yr) | LGA Own-Source Share of Non-Tax Revenue |
|---|---|---|
| 2000-2004 | 112.5 | – |
| 2005-2009 | 210.9 | 0.0%* |
| 2010-2014 | 584.4 | 29.7% |
| 2015-2019 | 1,839.8 | 21.0% |
| 2020-2024 | 4,444.4 | 21.1% |
Source: TICGL/TERI analysis of Ministry of Finance, Government Budgetary Operations data (IMF format). *LGA Own Source data is not available in the source dataset before 2010/2011; the 2005-2009 figure of 0.0% reflects absent data, not literally zero collection.
Non-Tax Revenue Growth, 2000-2025
LGA Own-Source Revenue, 2010-2025
Non-tax revenue grew roughly 40-fold between 2000-2004 and 2020-2024 — noticeably faster than tax revenue's roughly 20-fold growth over the same span. This tracks government efforts in recent years to expand collections from non-tax sources: dividends from state-owned enterprises, natural-resource royalties (mining, gas), registration and licensing fees, and improved collection of LGA own-source revenue following reforms such as electronic local-government fee-collection systems.
LGA own-source revenue only began appearing distinctly in this dataset around 2010/2011; before that, it is simply not available in the source data (not a true zero). Since then, it has consistently contributed roughly a fifth to just under a third of total non-tax revenue.
- Non-tax revenue growth is a genuine diversification win and reduces pressure to raise tax rates or introduce new taxes to fund the budget.
- LGA own-source revenue deserves continued investment in digital collection systems, given its demonstrated growth once such systems were introduced.
05 — SynthesisCross-Cutting Synthesis: The Revenue Side in One Picture
Reading the four themes together produces a coherent story about the other half of Tanzania's fiscal ledger:
Revenue has grown enormously over 26 years, but that growth has repeatedly stumbled during global and domestic shocks — a vulnerability worth planning around, not just celebrating the long-run average.
Income tax's rising share of tax revenue is the clearest sign that Tanzania's formal, registered economy is genuinely expanding and contributing proportionately more.
Import duty and VAT/excise still supply more than half of all tax revenue in every period studied — the tax system's center of gravity has shifted only gradually.
Growing nearly twice as fast as tax revenue, non-tax and LGA revenue are becoming structurally important — a trend that deserves as much policy attention as tax reform itself.
06 — RecommendationsPolicy Directions From the Revenue Analysis
Priority 1 — Build Shock Resilience Into Revenue Planning
- Use the four identified growth-shock episodes (2009, 2019, 2020-21, 2023) to stress-test future revenue forecasts against global and domestic shock scenarios.
- Pair this budget dataset with GDP, inflation, and international commodity-price data to move from plausible narrative to statistically robust causal analysis.
Priority 2 — Keep Broadening the Direct-Tax Base
- Sustain and extend TRA's TIN/EFD digitalisation programme, the primary driver of income tax's rising share.
- Monitor the 2020-2024 uptick in the indirect-tax share closely to determine whether it reverses the two-decade shift toward direct taxation.
Priority 3 — Double Down on Non-Tax and LGA Revenue
- Continue investing in digital LGA fee-collection systems, given their demonstrated impact on own-source revenue growth since 2010/2011.
- Explore further, transparent expansion of non-tax sources (SOE dividends, resource royalties) as an alternative to raising tax rates.
Recommendation for Further Analysis
- A dedicated tax-to-GDP and tax-buoyancy study, incorporating NBS GDP data, would allow this revenue analysis to speak directly to international benchmarks and collection efficiency.
"Tanzania's revenue story since 2000 is not one smooth climb — it is a series of genuine structural gains, repeatedly tested by shocks it could not control. The tax base has slowly become fairer and more formal; the next test is whether it can also become more resilient."
— TICGL / Tanzania Economic Research Institute (TERI)
07 — Sources & Data NotesReferences, Data Sources and Limitations
Tanzania Economic Research Institute (TERI), for TICGL, Uchambuzi wa Kina wa Mapato na Kodi ya Serikali ya Tanzania (2000-2025) — Sehemu ya Pili (Part II), a companion to Uchambuzi wa Takwimu za Mapato na Matumizi ya Serikali (2000-2026) (Part I), September 2026, based on the Ministry of Finance and Planning's monthly "Government Budgetary Operations" data (IMF format). All figures in this analysis are computed directly from that dataset by TICGL/TERI.
- Primary data: Ministry of Finance and Planning, United Republic of Tanzania — monthly Government Budgetary Operations tables (IMF format), January 2000 - December 2025.
- Method: Monthly revenue data summed to annual totals for 26 complete calendar years (2000-2025); year-on-year % change computed for 2001-2025; annual totals also averaged across five five-year periods (2000-2004 through 2020-2024) for compositional tables.
- Known limitations: This analysis does not incorporate GDP data, so it cannot compute tax buoyancy or a tax-to-GDP ratio — internationally standard measures of collection efficiency; a follow-up analysis incorporating NBS GDP data is recommended. The "Other Taxes" category (mainly Inland Revenue — e.g. stamp duty, Skills Development Levy) is a mixed category and was not split between direct and indirect taxation in Theme 3; it is shown as an independent third group. LGA Own Source revenue data is not available in the source dataset before 2010/2011 and was therefore not analysed for earlier periods. One data point (non-tax revenue in 2016) appears anomalously low in the source data and is presented as recorded, flagged here for transparency. As in Part I, explanations offered for various trends are economically-informed interpretations consistent with known policy history and events, not direct statistical proof of causation from this dataset alone.
- Related TICGL analysis: TICGL/TERI, "Tanzania Government Revenue & Expenditure, 2000-2026" (Part I of this series) — read here.
08 — Quick AnswersFrequently Asked Questions
Why did Tanzania's government revenue growth slow down in certain years?
Revenue growth fell below 10% in four periods — 2009 (global financial crisis), 2019 (a slowdown following aggressive tax enforcement in 2017-18), 2020-2021 (COVID-19), and 2023 (a slowdown after a high-growth 2022, possibly a base effect). These are the clearest growth shocks in 26 years of data.
Which tax source has grown fastest in Tanzania since 2000?
Income tax has grown fastest as a share of total tax revenue, rising from 25.8% in 2000-2004 to 36.2% in 2020-2024, reflecting formalisation of employment, TIN registration, and TRA's electronic tax systems (EFD).
Is Tanzania's tax system more direct or indirect?
Indirect taxation (import duty plus VAT/excise) still dominates, supplying 51-65% of tax revenue across every period studied, though direct taxation (income tax) has risen steadily from about a quarter to more than a third of tax revenue.
How much has Tanzania's non-tax revenue grown?
Non-tax revenue grew roughly 40-fold, from an average of TZS 112.5 billion per year in 2000-2004 to TZS 4,444.4 billion in 2020-2024 — faster growth than tax revenue itself over the same period, which grew about 20-fold.
How much do local governments (LGAs) contribute to non-tax revenue?
LGA own-source revenue, which only began appearing distinctly in the data around 2010/2011, now makes up about 21% of all non-tax revenue collected.
Muhtasari kwa Kiswahili
Mapato na Kodi ya Serikali ya Tanzania (2000-2025): Kasi ya Ukuaji na Mabadiliko ya Muundo wa Kodi — Ripoti hii ni Sehemu ya Pili ya mfululizo wa uchambuzi wa TICGL/TERI wa bajeti ya Tanzania, ikijikita kwenye upande wa mapato pekee. Inachambua kasi ya ukuaji wa mapato kwa kila mwaka (2001-2025) na muundo wa ndani wa mapato ya kodi, kutumia takwimu zilezile za kila mwezi za Wizara ya Fedha zilizotumika kwenye Sehemu ya Kwanza.
Matokeo makuu: Ukuaji wa mapato haujawa wa mstari ulionyooka — umeshuka chini ya asilimia 10 mara nne: 2009 (mtikisiko wa kifedha duniani), 2019 (baada ya msisitizo mkali wa ukusanyaji kodi), 2020-2021 (UVIKO-19), na 2023 (kudorora kwa muda). Ndani ya kodi, kodi ya mapato (income tax) imekuwa chanzo kilichokua kwa kasi zaidi — kutoka asilimia 25.8 hadi 36.2 ya kodi yote. Ushuru wa forodha umeshuka kwa muda mrefu kabla ya kupanda tena hivi karibuni. Kodi isiyo ya moja kwa moja bado inatawala (asilimia 51-65 ya kodi yote). Mapato yasiyo ya kodi yameongezeka kwa kasi zaidi ya kodi yenyewe — karibu mara 40 — huku mchango wa Halmashauri (LGA) ukifikia karibu asilimia 21 ya mapato hayo.
Hitimisho kuu ni kwamba mfumo wa kodi wa Tanzania umeendelea kubadilika kimuundo kwa miongo miwili — ukiongeza utegemezi kwa kodi ya moja kwa moja na mapato yasiyo ya kodi — huku bado ukikabiliwa na hatari za nje zinazoathiri ukuaji wa mapato mara kwa mara. Kuendelea kuimarisha mapato yasiyo ya kodi na kodi ya moja kwa moja, huku ukiboresha uthabiti wa ukusanyaji wakati wa misukosuko ya nje, ni eneo muhimu la kuzingatia katika mipango ya bajeti ijayo.
- Ukuaji wa Mapato 2025: asilimia 16.7; Ukuaji wa Kodi 2025: asilimia 19.5
- Sehemu ya Kodi ya Mapato: asilimia 36.2 (2020-24), juu kutoka asilimia 25.8 (2000-04)
- Sehemu ya Ushuru wa Forodha: asilimia 36.4 (2020-24), ikiwa imeshuka hadi asilimia 29.4 (2015-19) kabla ya kupanda tena
- Ukuaji wa Mapato Yasiyo ya Kodi: ~mara 40 kati ya 2000-04 na 2020-24
- Sehemu ya Halmashauri (LGA) katika Mapato Yasiyo ya Kodi: ~asilimia 21
Chanzo: Tanzania Economic Research Institute (TERI), kwa ajili ya TICGL, Uchambuzi wa Kina wa Mapato na Kodi ya Serikali ya Tanzania (2000-2025) — Sehemu ya Pili, Septemba 2026.