A Comprehensive Analysis of Tax Collection versus Money Circulation Patterns in Tanzania's Major Economic Hubs (2023-2025)
Tanzania's economy has demonstrated notable resilience and growth in recent years, with nominal GDP rising from TZS 189 trillion in 2023 to TZS 235 trillion in 2025 and real GDP growth accelerating to 6.0 percent. Over the same period, tax revenue performance also improved, reaching a record TZS 31.3 trillion in 2025 and lifting the tax-to-GDP ratio from 11.5 percent to 13.3 percent.
However, a deeper examination of money circulation patterns and regional economic activity reveals a troubling reality: large volumes of money are actively circulating through households, businesses, and regions far beyond formal tax capture.
The five major economic hubs—Dar es Salaam, Mwanza, Arusha, Mbeya, and Dodoma—together accounted for about 30-34 percent of national GDP in 2025. Yet Dar es Salaam alone dominates tax collection at 70%, translating into an effective capture rate of over 60 percent of the city's recorded economic output, far exceeding the national tax-to-GDP ratio.
This imbalance stems from centralized business registration and headquarters-based taxation. Revenues generated from mining in Mwanza and Shinyanga, agriculture in Mbeya, tourism in Arusha, and trade across secondary cities are often recorded and taxed in Dar es Salaam, masking severe under-collection in regions where real economic activity occurs.
In 2025, approximately 45 percent of Tanzania's GDP—about TZS 105.7 trillion—was generated informally. This resulted in an estimated annual tax leakage of TZS 14.1 trillion, nearly 45 percent of actual tax collections. Even with recent digital reforms, only about 5-7 percent of informal transactions are currently captured.
| Indicator | 2023 | 2024 | 2025 (Actual/Prelim.) | Source |
|---|---|---|---|---|
| GDP (Current Prices) | TZS 189.0 trillion | TZS 213.0 trillion | TZS 235.0 trillion | NBS, BoT, IMF |
| GDP (USD) | $70.3 billion | $79.2 billion | $87.4 billion | World Bank, BoT |
| GDP Growth Rate (Real) | 5.2% | 5.5% | 6.0% | IMF, AfDB |
| Quarterly Growth (2025) | - | - | Q1: 5.8%, Q2: 5.5%, Q3: ~6.0%, Q4: ~6.9% | BoT |
| Tax Revenue Collected | TZS 21.7 trillion | TZS 27.9 trillion | TZS 31.3 trillion | TRA, BoT |
| Tax-to-GDP Ratio | 11.5% | 13.1% | 13.3% | MoF, BoT |
| Dec 2025 Monthly Collection | - | - | TZS 4.13 trillion (record high) | TRA |
| Population | ~63 million | ~65 million | ~66.5 million | NBS |
| Money Velocity | 3.5 | 3.4 | 3.3 | BoT |
Money velocity declined from 3.5 to 3.3 due to increased digital transactions and higher savings rates, indicating more stable but slower cash circulation. This creates a paradox: tax revenue is growing faster than GDP (12.2% vs 10.3%) while money is circulating more slowly.
| Indicator | 2024 | 2025 | Growth | Notes |
|---|---|---|---|---|
| Total Banking Assets | TZS 63.51 Trillion | TZS 69.2 Trillion | +9.0% | Q4 data |
| Total Deposits | TZS 42.34 Trillion | TZS 46.8 Trillion | +10.5% | Customer deposits |
| Total Loans & Advances | TZS 37.38 Trillion | TZS 41.2 Trillion | +10.2% | 60% of assets |
| Mobile Money Transactions | TZS 198.86 Trillion | TZS 223.4 Trillion | +12.3% | Annual value |
| Digital Payment Growth | - | +15% | - | TRA e-filing pilots |
Mobile money transactions (TZS 223.4 trillion) now represent approximately 95% of Tanzania's annual GDP, highlighting the massive scale of digital financial activity. However, only 5-7% of these transactions are currently captured for tax purposes, representing a significant opportunity for revenue enhancement.
| Region/City | 2023 GDP (TZS Trillion) | 2024 GDP (TZS Trillion) | 2025 GDP (TZS Trillion) | % of National GDP (2025) | Notes/Source |
|---|---|---|---|---|---|
| Dar es Salaam | 32.2 | 34.0 | 36.0 | 15.3% | Urban services and trade hub |
| Mwanza (Lake Zone) | 12.7 | 13.4 | 14.2 | 6.0% | Mining and fisheries |
| Arusha (Northern Zone) | 6.0 | 6.3 | 6.7 | 2.9% | Tourism recovery |
| Mbeya (Southern Highlands) | 7.5 | 7.9 | 8.4 | 3.6% | Agriculture |
| Dodoma (Central Zone) | 5.5 | 5.8 | 6.1 | 2.6% | Infrastructure |
| Shinyanga | 7.5 | 7.9 | 8.4 | 3.6% | Mining-heavy region |
| Other Regions | 117.6 | 137.7 | 155.2 | 66.0% | Remainder of national GDP |
| National Total | 189.0 | 213.0 | 235.0 | 100% | NBS/IMF/BoT/WB aggregates |
The five major cities contributed ~34% of national GDP in 2025, with Dar es Salaam's share declining slightly (from 17.1% to 15.3%) due to faster rural/mining growth in Lake and Southern zones.
| City | Population (Est. 2025) | GDP (TZS Trillion) | GDP Per Capita (TZS) | GDP Per Capita (USD) |
|---|---|---|---|---|
| Dar es Salaam | 5.8 million | 36.0 | 6,206,897 | 2,307 |
| Mwanza | 1.2 million | 14.2 | 11,833,333 | 4,399 |
| Arusha | 0.9 million | 6.7 | 7,444,444 | 2,767 |
| Mbeya | 0.7 million | 8.4 | 12,000,000 | 4,461 |
| Dodoma | 0.8 million | 6.1 | 7,625,000 | 2,834 |
| National Average | 66.5 million | 235.0 | 3,533,835 | 1,314 |
| City | 2023 Daily (TZS Billion) | 2024 Daily (TZS Billion) | 2025 Daily (TZS Billion) | Growth 2024-2025 | Primary Sectors |
|---|---|---|---|---|---|
| Dar es Salaam | 88.2 | 93.2 | 98.6 | +5.8% | Trade, Finance, Manufacturing, Port |
| Mwanza | 34.8 | 36.7 | 38.9 | +6.0% | Mining, Fishing, Trade |
| Arusha | 16.4 | 17.3 | 18.4 | +6.4% | Tourism, Agriculture, Trade |
| Mbeya | 20.5 | 21.6 | 23.0 | +6.5% | Agriculture, Mining, Trade |
| Dodoma | 15.1 | 15.9 | 16.8 | +5.7% | Government, Infrastructure, Services |
| National Average | 517.8 | 583.6 | 643.8 | +10.3% | All sectors |
Comprehensive analysis of money circulation and tax alignment across major economic hubs (2023-2025)
| Year | Tax Revenue (TZS Trillion) | GDP (TZS Trillion) | Tax-to-GDP Ratio | Growth YoY | Key Drivers |
|---|---|---|---|---|---|
| 2023 | 21.7 | 189.0 | 11.5% | - | Baseline recovery |
| 2024 | 27.9 | 213.0 | 13.1% | +28.6% | Digital collection, economic growth |
| 2025 | 31.3 | 235.0 | 13.3% | +12.2% | Mining exports (+38.9%), record Dec collection (4.13T) |
| 2025/26 Target | ~33.1 | ~248.0 | 13.3-14.1% | - | TRA modernization goals |
Tax-to-GDP ratio improved from 11.5% to 13.3%, adding 1.8 percentage points in two years. However, this remains below the Sub-Saharan Africa average of 16% and East African Community peers like Kenya (15%). The gap represents approximately TZS 6.3 trillion in untapped annual revenue.
| Region/Zone | Estimated Tax Collected (TZS Trillion) | % of National Tax | GDP Contribution (%) | Collection Efficiency Ratio |
|---|---|---|---|---|
| Dar es Salaam Zone | ~21.9 | 70% | 15.3% | 4.58x |
| Lake Zone (Mwanza) | ~3.1 | 10% | 6.0% | 1.67x |
| Northern Zone (Arusha) | ~1.6 | 5% | 2.9% | 1.72x |
| Central Zone (Dodoma) | ~1.6 | 5% | 2.6% | 1.92x |
| Southern Highlands (Mbeya) | ~1.6 | 5% | 3.6% | 1.39x |
| Other Zones | ~1.5 | 5% | 69.6% | 0.07x |
| NATIONAL TOTAL | 31.3 | 100% | 100% | 1.00x |
Mining zones (Mwanza, Shinyanga) saw collection efficiency rise from 0.08x to 1.67x due to 38.9% export growth and better monitoring. This demonstrates that targeted interventions can rapidly improve collection in specific sectors.
| City | Annual GDP/Circulation (TZS Trillion) | Target Tax @ 13.3% (TZS Trillion) | Estimated Actual Tax (TZS Trillion) | Gap (TZS Trillion) | Effective Collection Rate |
|---|---|---|---|---|---|
| Dar es Salaam | 36.0 | 4.79 | 21.9 | +17.11 (Surplus) | 60.8% |
| Mwanza | 14.2 | 1.89 | 3.1 | +1.21 (Surplus) | 21.8% |
| Arusha | 6.7 | 0.89 | 1.6 | +0.71 (Surplus) | 23.9% |
| Mbeya | 8.4 | 1.12 | 1.6 | +0.48 (Surplus) | 19.0% |
| Dodoma | 6.1 | 0.81 | 1.6 | +0.79 (Surplus) | 26.2% |
| Other Regions | 163.6 | 21.76 | 1.5 | -20.26 (Deficit) | 0.9% |
| Sector | Q2 2025 Growth (NBS) | Contribution to National Growth | Tax Collection Potential |
|---|---|---|---|
| Mining & Quarrying | 19.0% | ~10% of total growth | High - exports up 38.9% |
| Financial Services | 14.8% | ~2% of total growth | High - formal sector |
| Electricity & Water | 14.0% | ~1% of total growth | Medium - infrastructure enabling |
| Construction | 8.2% | ~0.57 percentage points | Medium - 65% urban |
| Industry | 7.8% | ~1.4 percentage points | High - 60% urban |
| Services | 6.5% | 47% of GDP, ~20-25% growth | High - concentrated in Dar |
| Agriculture | 5.2% | ~2% of total growth | Low - 45% informality |
| Tourism | 11.4% (arrivals) | ~1-2% of total growth | Medium - receipts USD 6.9B |
| Export Category | 2024 Value | 2025 Value | Growth | Tax Impact |
|---|---|---|---|---|
| Gold Exports | USD 2.8B | USD 3.9B | +38.9% | +TZS 2.2T in royalties/VAT |
| Tourism Receipts | USD 6.2B | USD 6.9B | +11.4% | +TZS 0.8T in levies/VAT |
| Total Exports | USD 9.1B | USD 10.8B | +18.7% | +TZS 3.5T total |
Mining sector (concentrated in Mwanza/Shinyanga) drove 38.9% export growth, contributing approximately TZS 2.2 trillion in additional tax revenue in 2025. This single sector accounted for 7% of total tax collections and demonstrates the revenue potential of properly taxing extractive industries.
| City | Formal Economy (TZS Trillion) | Informal Economy (TZS Trillion) | Informal % | Potential Tax Loss @ 13.3% (TZS Billion) |
|---|---|---|---|---|
| Dar es Salaam | 25.2 | 10.8 | 30% | 1,436 |
| Arusha | 4.0 | 2.7 | 40% | 359 |
| Dodoma | 3.7 | 2.4 | 40% | 319 |
| Mwanza | 7.1 | 7.1 | 50% | 945 |
| Mbeya | 3.4 | 5.0 | 60% | 665 |
| TOTAL (5 Cities) | 43.4 | 28.0 | 39% | 3,724 |
| National Estimate | 129.3 | 105.7 | 45% | 14,058 |
| Initiative | Coverage | Revenue Gain (2025) | Efficiency Improvement |
|---|---|---|---|
| TRA E-Filing Pilots | Dar es Salaam ports, select businesses | +15% revenue | 20% faster processing |
| Mobile Money Integration | Nationwide | +TZS 1.2T | Captured 12% of informal transactions |
| Electronic Tax Invoicing | Large businesses (>100M turnover) | +TZS 0.8T | Reduced VAT evasion by 18% |
| TOTAL DIGITAL IMPACT | - | +TZS 2.0T | +6.4% of total revenue |
Digital collection initiatives contributed TZS 2.0 trillion (+6.4% of total revenue) in 2025, validating the modernization strategy. Mobile money integration alone captured TZS 1.2 trillion from previously untaxed informal transactions. However, with mobile money handling TZS 223.4 trillion annually, only ~5-7% of these transactions are currently captured for tax purposes.
| Region/City | % of National GDP (2025) | Contribution to 6.0% Growth | Key Growth Factors |
|---|---|---|---|
| Dar es Salaam | 15.3% | ~1.2 percentage points (20%) | Services (47% national GDP), FDI, infrastructure, port operations |
| Mwanza (Lake Zone) | 6.0% | ~0.6 percentage points (10%) | Gold/minerals (exports +38.9%), fishing, trade |
| Arusha (Northern Zone) | 2.9% | ~0.1-0.2 percentage points (2-3%) | Tourism (USD 6.9B receipts, +11.4% arrivals), agriculture |
| Mbeya (Southern Highlands) | 3.6% | ~0.1-0.2 percentage points (2-3%) | Agriculture (23% national GDP), food security |
| Dodoma (Central Zone) | 2.6% | ~0.1 percentage points (1-2%) | Hydropower (Julius Nyerere plant), infrastructure, government |
| Other Regions | 69.6% | ~3.8 percentage points (63%) | Agriculture, rural services, emerging sectors |
The five major cities/zones contributed ~2.2-2.4 percentage points (37-40%) of the 6.0% national growth in 2025. However, "Other Regions" accounting for 69.6% of GDP contributed 3.8 percentage points (63%) of growth, demonstrating that economic expansion is occurring broadly across Tanzania, not just in urban centers.
| Sector | 2025 Growth Rate | National GDP Share | Growth Contribution | Urban vs Rural |
|---|---|---|---|---|
| Services | 6.5% | 47% | ~3.1 percentage points | 75% Urban (Dar) |
| Industry | 7.8% | 18% | ~1.4 percentage points | 60% Urban |
| Agriculture | 5.2% | 23% | ~1.2 percentage points | 85% Rural |
| Mining | 19.0% | 5% | ~0.95 percentage points | 70% Rural (Mwanza, Shinyanga) |
| Construction | 8.2% | 7% | ~0.57 percentage points | 65% Urban |
| City | Annual Circulation (TZS Trillion) | Taxes Collected (TZS Trillion) | Capture Rate | Informality Adjusted Rate* | Gap to 16% SSA Target |
|---|---|---|---|---|---|
| Dar es Salaam | 36.0 | 21.9 | 60.8% | 42.6% (of formal) | +26.6% overcollection |
| Mwanza | 14.2 | 3.1 | 21.8% | 10.9% (of formal) | -5.1% undercollection |
| Arusha | 6.7 | 1.6 | 23.9% | 14.3% (of formal) | -1.7% undercollection |
| Mbeya | 8.4 | 1.6 | 19.0% | 7.6% (of formal) | -8.4% undercollection |
| Dodoma | 6.1 | 1.6 | 26.2% | 15.7% (of formal) | -0.3% undercollection |
| National | 235.0 | 31.3 | 13.3% | 7.3% (of formal) | -2.7% undercollection |
| Question | Finding | Data Point |
|---|---|---|
| Is tax collection growing with GDP? | Yes, but slowly | Tax grew 12.2% vs GDP 10.3% (2024-2025) |
| Does it match circulation velocity? | No - velocity mismatch | Velocity declined 3.4→3.3, but taxes grew faster |
| Does regional collection match regional GDP? | No - severe mismatch | Dar 70% tax vs 15% GDP; Others 30% tax vs 85% GDP |
| Is informal economy being taxed? | Partially - improving | 45% GDP informal, only ~5-7% captured |
| Are high-growth sectors taxed adequately? | Mixed results | Mining (+19%) well-taxed; Agriculture (+5.2%) poorly taxed |
| Overall alignment verdict | MISALIGNED | Need +TZS 6.1T to reach 16% SSA benchmark |
| City | 2025 GDP (TZS Trillion) | Current Tax (TZS Trillion) | Target @ 16% SSA (TZS Trillion) | Gap (TZS Trillion) | Required Growth |
|---|---|---|---|---|---|
| Dar es Salaam | 36.0 | 21.9 | 5.76 | -16.14 (Redistribution needed) | Rebalance nationally |
| Mwanza | 14.2 | 3.1 | 2.27 | -0.83 (Overcollecting) | Reduce reliance, expand base |
| Arusha | 6.7 | 1.6 | 1.07 | -0.53 (Overcollecting) | Formalize tourism sector |
| Mbeya | 8.4 | 1.6 | 1.34 | +0.26 (Undercollecting) | +19% |
| Dodoma | 6.1 | 1.6 | 0.98 | -0.62 (Overcollecting) | Focus on property tax |
| Other Regions | 163.6 | 1.5 | 26.18 | +24.68 | +1,645% |
| NATIONAL | 235.0 | 31.3 | 37.6 | +6.3 | +20% |
| Intervention | Priority | Target Regions | Potential Revenue Gain (TZS Trillion) | Timeline | 2025 Progress |
|---|---|---|---|---|---|
| 1. Formalize Informal Economy | Very High | All, esp. Mbeya, Mwanza | +10.6 | 2025-2028 | Policy review initiated |
| TOTAL POTENTIAL | - | - | +44.6 | - | +TZS 7.0T in 2025 |
| Action | Q1 2026 | Q2 2026 | Q3 2026 | Q4 2026 | Expected Impact |
|---|---|---|---|---|---|
| Scale e-filing nationally | Pilot expansion | Mwanza, Arusha rollout | Mbeya, Dodoma rollout | Full integration | +TZS 2.5T |
| Mobile money tax integration | API development | Operator partnerships | Pilot launch | Nationwide | +TZS 1.8T |
| Mining contract reviews | Legal framework | Renegotiate royalties | New compliance | Enforcement | +TZS 1.2T |
| SME presumptive tax | Design scheme | Stakeholder consultation | Legislative approval | Implementation | +TZS 0.9T |
| Regional tax courts | Dodoma establishment | Arusha, Mwanza planning | Construction | Staffing | +TZS 0.4T (efficiency) |
| TOTAL 2026 TARGET | - | - | - | - | +TZS 6.8T (21.7% growth) |
| Scenario | 2025 Actual | 2027 Target | 2030 Target | Required CAGR | Key Milestones |
|---|---|---|---|---|---|
| Conservative (13-14%) | 31.3 | 37.7-39.7 | 47.9-51.7 | 8.9-10.5% | Current trajectory, minimal reforms |
| Medium (15-16%) | 31.3 | 42.5-45.4 | 55.4-59.0 | 12.1-13.6% | Digital systems, partial formalization |
| Ambitious (18%) | 31.3 | 51.0 | 66.4 | 16.2% | Full reform implementation |
| Vision 2050 Path | 31.3 | 55.0 | 95.0 | 24.9% | Transformational change required |
Target the Medium Scenario (15-16% tax-to-GDP) by 2030 as realistic with sustained reforms. This requires achieving TZS 55.4-59.0 trillion in tax revenue by 2030, representing a CAGR of 12.1-13.6%. The ambitious 18% scenario requires perfect execution of all reforms, while the Vision 2050 path would require transformational change beyond current policy tools.
| Period | Revenue Target (TZS Trillion) | Tax-to-GDP Ratio | Required Actions | Feasibility |
|---|---|---|---|---|
| 2026 | 38.1 | 14.1% | Immediate reforms above | ✅ Achievable |
| 2028 | 50.5 | 15.0% | Medium-term reforms + SME formalization | ✅ Realistic |
| 2030 | 66.4 | 18.0% | Full digital integration, 50% informal formalized | ⚠️ Ambitious |
| 2035 | 135.0 | 20.0% | Sustained growth, advanced economy features | ⚠️ Challenging |
| 2040 | 225.0 | 21.0% | High-income transition | ⚠️ Requires transformation |
| 2050 | 350.0 | 22.0% | Developed economy taxation | ❓ Possible but requires perfect execution |
| Risk Factor | Probability | Impact | Mitigation Strategy |
|---|---|---|---|
| Global Mining Prices | High | High | 2025 gold boom may not sustain; price volatility threatens 15% of new revenue. Diversify revenue base away from extractives. |
| Velocity Decline | Medium | Medium | Continued drop could require higher rates to meet targets. Monitor digital transaction patterns closely. |
| Political Resistance | High | High | Business lobby may block decentralization reforms. Build coalition with regional stakeholders. |
| Capacity Constraints | Very High | Critical | TRA may struggle to scale operations 5x in 5 years. Prioritize training and technology over headcount. |
| Digital Divide | Medium | Medium | Rural areas may lag, limiting mobile money tax integration. Invest in connectivity infrastructure. |
| Informal Pushback | High | Medium | SMEs may resist formalization without clear benefits. Package tax reforms with service improvements. |
| Year | National Velocity | Change | Key Drivers |
|---|---|---|---|
| 2023 | 3.5 | - | Baseline |
| 2024 | 3.4 | -2.9% | Increased mobile money, higher savings |
| 2025 | 3.3 | -2.9% | Digital transactions (+12.3%), financial inclusion |
Declining velocity indicates money is changing hands less frequently, partly due to: (1) Digital transactions that settle faster but circulate more slowly, (2) Increased savings rates (deposits +10.5% in 2025), and (3) More efficient payment systems reducing need for cash circulation. This creates a policy paradox: tax revenue is growing faster than GDP (12.2% vs 10.3%) while money circulates more slowly.
| Payment Method | Volume (TZS Trillion) | % of Total | Growth YoY | Tax Capture Rate |
|---|---|---|---|---|
| Cash | 94.0 | 40% | -5% | 5% (mostly informal) |
| Mobile Money | 223.4 | 95% | +12.3% | 15% (improving with integration) |
| Bank Transfers | 156.8 | 67% | +10.2% | 85% (formal sector) |
| Card Payments | 28.5 | 12% | +18% | 90% (mostly urban) |
| Country | GDP (USD Billion) | Tax-to-GDP Ratio | Tax Revenue (USD Billion) | Per Capita Tax (USD) | Money Velocity |
|---|---|---|---|---|---|
| Tanzania | 87.4 | 13.3% | 11.6 | 175 | 3.3 |
| Kenya | 118.1 | 15.2% | 17.9 | 355 | 3.8 |
| Uganda | 55.3 | 12.8% | 7.1 | 155 | 3.1 |
| Rwanda | 15.2 | 16.5% | 2.5 | 192 | 4.2 |
| Burundi | 3.8 | 14.1% | 0.5 | 42 | 2.8 |
| SSA Average | - | 16.0% | - | - | 3.5 |
| City | GDP (USD Billion) | Population (Million) | Tax Collection Share | Digital Payment Adoption |
|---|---|---|---|---|
| Nairobi | 45.5 | 5.1 | 65% of Kenya | 78% |
| Dar es Salaam | 13.4 | 5.8 | 70% of Tanzania | 62% |
| Kampala | 22.1 | 3.6 | 60% of Uganda | 55% |
| Kigali | 6.8 | 1.4 | 70% of Rwanda | 82% |
Dar es Salaam's 70% collection share is comparable to regional peers, but digital adoption lags Kigali significantly. Rwanda's higher digital payment adoption (82%) correlates with better tax capture, suggesting Tanzania should prioritize digital infrastructure investment.
| Assessment Criteria | Status | Evidence |
|---|---|---|
| National Level Alignment | ❌ MISALIGNED | 13.3% vs 16% SSA target (-2.7 pp gap) |
| Regional Distribution | ❌ SEVERELY MISALIGNED | Dar 60.8% vs others 1-26% effective rates |
| Sectoral Coverage | ⚠️ PARTIAL | Mining/Services good; Agriculture poor |
| Formality Integration | ⚠️ IMPROVING | 45% GDP still informal; digital up 15% |
| Growth Sustainability | ✅ POSITIVE | Tax growth (12.2%) > GDP growth (10.3%) |
| Velocity Matching | ❌ DIVERGING | Tax↑ while velocity↓ creates tension |
| Source | Data Type | Period Coverage | Reliability |
|---|---|---|---|
| National Bureau of Statistics (NBS) | Q1 & Q2 2025 quarterly GDP releases; 2023 annual regional GDP | 2023-2025 | High |
| Bank of Tanzania (BoT) | Q3 & Q4 2025 preliminary estimates; money supply, velocity, banking data | 2023-2025 | High |
| Tanzania Revenue Authority (TRA) | Monthly collection reports; December 2025 record (TZS 4.13T) | 2023-2025 | High |
| IMF | 2025 full-year aggregates; Article IV consultation reports | 2023-2025 | High |
| World Bank | 2025 economic updates; exchange rate data (avg. 2,690 TZS/USD) | 2023-2025 | High |
| African Development Bank (AfDB) | East Africa Economic Outlook 2025 | 2023-2025 | High |
Date: January 2026 using latest available data through December 2025
Currency: All figures in Tanzania Shillings (TZS) unless otherwise stated
Exchange Rate: 1 USD = 2,690 TZS (average 2025)
Next Update: Upon release of NBS Regional GDP 2025 report (expected Q2 2026) for refined regional estimates
| City | GDP (TZS T) | Growth | Tax (TZS T) | Efficiency | Grade |
|---|---|---|---|---|---|
| Dar es Salaam | 36.0 | 5.8% | 21.9 | Overcollecting | B+ |
| Mwanza | 14.2 | 6.0% | 3.1 | Improving | B |
| Arusha | 6.7 | 6.4% | 1.6 | Undercollecting | C+ |
| Mbeya | 8.4 | 6.5% | 1.6 | Undercollecting | C |
| Dodoma | 6.1 | 5.7% | 1.6 | Fair | B- |
Tanzania stands at a critical juncture. The economy is growing at 6.0%, tax collections reached a record TZS 31.3 trillion in 2025, and the tax-to-GDP ratio improved to 13.3%. Yet beneath these positive headlines lies a fundamental misalignment: taxation is not occurring where money actually circulates.
The choice is clear: Transform Tanzania's tax system to match economic reality, or continue collecting from convenient urban centers while the rural majority and informal economy escape taxation. One path leads to Vision 2050. The other leads to perpetual revenue shortfalls and regional inequality.
The question is not whether Tanzania can afford to reform. It's whether Tanzania can afford not to.
Report Title: Is Tanzania Effectively Taxing Where Money Actually Circulates?
A Comprehensive Analysis of Tax Collection versus Money Circulation Patterns in Tanzania's Major Economic Hubs (2023-2025)
Published By: Tanzania Investment and Consultant Group Ltd (TICGL)
Publication Date: January 2026
Data Coverage: 2023-2025 (with projections to 2050)
Last Updated: January 22, 2026
Primary Data Sources:
• National Bureau of Statistics (NBS) - Q1/Q2 2025 GDP Releases
• Bank of Tanzania (BoT) - Q3/Q4 2025 Preliminary Estimates
• Tanzania Revenue Authority (TRA) - Monthly Collection Reports
• International Monetary Fund (IMF) - 2025 Article IV Consultation
• World Bank - Tanzania Economic Update 2025
• African Development Bank (AfDB) - East Africa Economic Outlook 2025
Contact Information:
Website: www.ticgl.com
Economic Dashboard: ticgl.com/dashboard
Analytics Platform: data.ticgl.com/analytics
Disclaimer: This analysis uses the best available data from official sources as of January 2026. All projections are based on current trends and assume sustained policy implementation. Actual outcomes may vary based on economic conditions, policy changes, and external factors. Regional GDP estimates for 2025 are preliminary pending NBS's official regional report expected in Q2 2026.
© 2026 Tanzania Investment and Consultant Group Ltd (TICGL). All rights reserved.
This report may be cited with proper attribution to TICGL.
This comprehensive analysis represents a collaborative effort combining Amran Bhuzohera's expertise in tax policy and regional economics with Dr. Bravious Felix Kahyoza's deep knowledge of financial modeling and public-private partnerships. Together, they bring over two decades of combined experience in analyzing Tanzania's economic landscape and providing strategic insights for sustainable development.