Tax Collection Efficiency Mark Tanzania's Fiscal Year 2023/2024

First Quarter (Robo ya Kwanza: July-September)

For the first quarter of 2022/2023, the actual tax collection was TZS 5,924,493.01 million. The target for the first quarter of 2023/2024 was set at TZS 6,745,293.35 million. The actual collection for this period in 2023/2024 was TZS 6,574,845.86 million, which is approximately 2.53% below the target but represents a year-over-year increase of 10.96% from the previous year's actual collection.

Second Quarter (Robo ya Pili: October-December)

In the second quarter of 2022/2023, the actual tax collection was TZS 6,561,658.01 million. The target for the second quarter of 2023/2024 was set at TZS 7,460,410.20 million. The actual collection for this period in 2023/2024 was TZS 7,341,719.12 million, falling short of the target by approximately 1.59%. However, this is a year-over-year increase of 11.88% from the actual collection of the previous year.

Third Quarter (Robo ya Tatu: January-March)

The actual tax collection for the third quarter of 2022/2023 was TZS 5,936,715.24 million. The target for the same quarter in 2023/2024 was TZS 6,966,477.40 million. The actual collection in 2023/2024 was TZS 6,634,890.46 million, which is about 4.77% below the target. Despite missing the target, this still marks an 11.76% increase from the previous year's actual collection.

Fourth Quarter (Robo ya Nne: April-June)

For the fourth quarter of 2022/2023, the actual tax collection stood at TZS 5,715,589.31 million. The target for the fourth quarter of 2023/2024 was TZS 7,125,289.72 million. The actual collection for this period in 2023/2024 was TZS 7,087,140.82 million, which is just 0.54% below the target. This represents a significant year-over-year increase of 23.98% from the previous year's actual collection.

Annual Totals

The total actual tax collection for the year 2022/2023 was TZS 24,138,455.57 million. The target for the year 2023/2024 was TZS 28,297,470.67 million. The total actual collection for 2023/2024 came to TZS 27,638,596.26 million, which is approximately 2.33% below the target. However, this reflects an overall increase of 14.47% from the previous year’s total actual collection.

Summary

• First Quarter: 10.96% increase in actual collections year-over-year, but 2.53% below the 2023/2024 target.
• Second Quarter: 11.88% year-over-year increase, 1.59% below the 2023/2024 target.

Third Quarter (continued)

• Third Quarter: 11.76% year-over-year increase in actual collections, but 4.77% below the 2023/2024 target. This indicates a strong year-over-year growth, though slightly below the set target for 2023/2024.

Fourth Quarter (Robo ya Nne: April-June)

• Fourth Quarter: The year-over-year increase in actual collections was 23.98%, the highest among all quarters, demonstrating significant improvement compared to the same period in the previous year. The actual collection was only 0.54% below the target for 2023/2024, indicating a very close achievement of the set goal.

Annual Totals

• Annual Totals: For the entire fiscal year, the total actual tax collection in 2023/2024 was TZS 27,638,596.26 million, which is a 14.47% increase from the previous year's total of TZS 24,138,455.57 million. Despite the increase, the total collection was 2.33% below the overall target of TZS 28,297,470.67 million for 2023/2024.

Conclusion

The data highlights a consistent year-over-year increase in tax collections across all quarters, showing significant progress in tax revenue generation:

• First Quarter: 10.96% increase, 2.53% below target.
• Second Quarter: 11.88% increase, 1.59% below target.
• Third Quarter: 11.76% increase, 4.77% below target.
• Fourth Quarter: 23.98% increase, 0.54% below target.
• Annual Increase: 14.47% overall increase, 2.33% below annual target.

The tax collection performance for 2023/2024 demonstrates strong growth in comparison to 2022/2023, with each quarter showing improvements despite slight shortfalls in meeting the targeted figures. The most notable growth occurred in the fourth quarter, indicating a positive trend towards the end of the fiscal year.

Tanzania across the fiscal years 2022/2023 and 2023/2024 provides several insights into the country's economic development

Tanzania in 2023/2024 indicates a robust and growing economy, marked by substantial improvements in tax revenue. The consistent growth in tax collections, despite falling slightly short of ambitious targets, suggests effective economic policies and a resilient economic structure. These positive indicators are likely to contribute to further economic development, enhanced public services, and improved infrastructure, setting a solid foundation for Tanzania's future growth and prosperity.

Strong Economic Growth

Year-over-Year Increase in Tax Collection:

• The consistent year-over-year increases in tax collections across all quarters indicate strong economic growth. The significant increases, especially the 23.98% growth in the fourth quarter, suggest robust economic activity and improvements in the efficiency of tax collection mechanisms.

Improved Tax Collection Efficiency

Narrow Gaps Between Targets and Actual Collections:

• The relatively small percentage differences between the targets and actual collections (e.g., 2.53% below target in the first quarter, 1.59% below target in the second quarter) demonstrate improved accuracy in setting realistic tax revenue targets and enhanced efficiency in tax collection. This improvement can be attributed to better compliance, stronger enforcement of tax laws, and possibly broadening the tax base.

Economic Stability and Resilience

Sustained Growth Across Quarters:

• The sustained growth across all four quarters, with increases ranging from 10.96% to 23.98%, reflects economic stability and resilience. This indicates that the economy is not only growing but also capable of maintaining momentum despite potential challenges.

Potential Areas for Improvement

Meeting Targets:

• While the actual collections have shown significant improvements, the fact that they fell slightly short of the targets (e.g., 2.33% below the annual target) suggests room for further enhancements. On addressing the shortfall could involve strengthening tax administration and compliance efforts further, reducing tax evasion, and fostering an even more conducive business environment.

Positive Economic Indicators

Increased Revenue for Development:

• The increased tax revenue provides the government with more resources for development projects, social services, and infrastructure improvements. This is critical for sustained economic development and improving the quality of life for citizens.

Encouraging Investment

Confidence in Economic Policies:

• The positive trends in tax collection can boost confidence among investors and international stakeholders in Tanzania's economic policies and governance. This could lead to increased foreign and domestic investments, further spurring economic growth.

Source: TRA-2024