The government has proposed a total budget of 49,345.7 billion shillings for the fiscal year 2024/25, marking an 11.2 percent increase compared to the previous year's budget of 44,388.1 billion shillings.
Today, at the Pius Msekwa Hall in Dodoma, Minister of Finance Dr. Mwigulu Nchemba (Mb) presented these recommendations to the Committee of the Whole Parliament.
Within this budget, revenues are projected to be sourced as follows: an estimated 29,858.4 billion shillings to be collected by the Tanzania Revenue Authority, 3,408.1 billion shillings in non-tax revenue from independent Ministries, Institutions, and Departments, and 1,344.1 billion shillings in income for Local Government Authorities.
Reflecting on Tanzania's economic growth, the proposed budget increase for the fiscal year 2024/25 suggests a continued trajectory of economic expansion. The significant 11.2 percent rise from the previous year's budget indicates confidence in the country's economic prospects and a commitment to further development initiatives.
However, several challenges could pose hurdles to the successful implementation of this budget. One of the main challenges is ensuring effective revenue collection, particularly in light of the economic disruptions caused by the global pandemic. With a substantial portion of revenue expected to be generated through taxation and non-tax revenue, the government will need to address issues such as tax evasion, informal economic activities, and administrative inefficiencies within revenue collection agencies.
Enhancing fiscal discipline and ensuring prudent expenditure management will be crucial. Tanzania, like many other countries, faces the challenge of balancing various development priorities with limited resources. Allocating funds efficiently to critical sectors such as healthcare, education, infrastructure, and social welfare programs will be essential for sustainable growth and poverty reduction.
Maintaining macroeconomic stability amidst external and internal uncertainties is paramount. Global economic trends, fluctuations in commodity prices, and domestic factors such as inflation and exchange rate volatility could impact the budget's effectiveness. Sound monetary and fiscal policies, coupled with prudent debt management practices, will be vital to mitigate these risks and safeguard macroeconomic stability.
Lastly, addressing structural bottlenecks and promoting private sector-led growth are imperative for unlocking Tanzania's full economic potential. Enhancing the business environment, reducing red tape, and fostering innovation and entrepreneurship will be critical in driving long-term economic growth, job creation, and poverty alleviation.
Hence, while the proposed budget reflects Tanzania's commitment to economic growth and development, addressing challenges such as revenue mobilization, expenditure management, macroeconomic stability, and structural reforms will be key to realizing its objectives and fostering inclusive and sustainable growth.