Enhancing Economic Development through Strategic Local Revenue Mobilization: Insights from Tanzania's Fiscal Year 2023/24

Overview:

Local Government Authorities in Tanzania have shown promising revenue collection from their own sources for the fiscal year 2023/24. The cumulative revenue collection reached TZS 854.8 billion, which is 76.8% of the target set for the year (TZS 1,112.5 billion). This indicates a high likelihood of achieving the annual target.

Performance by Zone:

The performance varies across different zones, with the Dar es Salaam and Lake zones contributing the most significant shares.

Table 1: Local Government Revenue Performance by Zone (Billions of TZS)

Key Points:

1. Dar es Salaam Zone:
   • Target: TZS 240.1 billion
   • Actual: TZS 198.7 billion
   • Actual/Target Ratio: 82.8%
   • Percentage Share: 23.2%
   • Notable for having the highest share of revenue collection.
2. Lake Zone:
   • Target: TZS 230.1 billion
   • Actual: TZS 176.3 billion
   • Actual/Target Ratio: 76.6%
   • Percentage Share: 20.6%
   • Second highest in terms of revenue collection share.
3. South Eastern Zone:
   • Target: TZS 149.4 billion
   • Actual: TZS 130.4 billion
   • Actual/Target Ratio: 87.3%
   • Percentage Share: 15.3%
   • Highest actual/target ratio among all zones.
4. Central Zone:
   • Target: TZS 173.0 billion
   • Actual: TZS 129.6 billion
   • Actual/Target Ratio: 74.9%
   • Percentage Share: 15.2%
5. Northern Zone:
   • Target: TZS 167.2 billion
   • Actual: TZS 124.0 billion
   • Actual/Target Ratio: 74.2%
   • Percentage Share: 14.5%
6. Southern Highlands Zone:
   • Target: TZS 152.7 billion
   • Actual: TZS 95.8 billion
   • Actual/Target Ratio: 62.7%
   • Percentage Share: 11.2%
   • Lowest actual/target ratio among all zones.

Implications:

• The overall good performance, especially in the Dar es Salaam and Lake zones, is attributed to improved economic activities and increased usage of point-of-sale devices.
• The higher actual/target ratio in the South Eastern zone suggests effective revenue collection strategies.
• The data indicates a potential for other zones to enhance their revenue collection mechanisms to meet or exceed their targets.

Local government revenue collections in Tanzania for the 2023/24 fiscal year

Local government revenue collections in Tanzania provides a snapshot of economic activities, regional disparities, technological adoption, and policy implications. It serves as a valuable tool for assessing economic health, identifying growth opportunities, and formulating targeted development strategies to foster sustainable economic development across all regions of Tanzania.

1. Economic Activity and Growth: The increased revenue collection suggests improved economic activities within Tanzania. When local governments collect more revenue, it often indicates a growing economy where businesses are thriving and contributing taxes.
2. Regional Economic Disparities: The distribution of revenue across different zones highlights regional economic disparities. Zones like Dar es Salaam and the Lake Zone contribute significantly more to revenue collection compared to others. This can reflect differences in economic development, infrastructure, and business activities among these regions.
3. Infrastructure and Technology Adoption: The mention of increased usage of point-of-sale devices indicates a trend towards modernizing revenue collection methods. This adoption of technology not only enhances efficiency in revenue collection but also signifies a level of technological advancement within the economy.
4. Policy Implications: For policymakers, this data underscores the importance of targeted economic policies and investments. Zones with lower revenue collections may require focused interventions to stimulate economic growth, improve infrastructure, and support local businesses.
5. Overall Economic Health: Achieving 76.8% of the revenue target suggests a robust economic performance but also indicates areas for potential improvement in revenue mobilization strategies. This balance between achievement and potential growth areas is crucial for sustaining economic development.