As Tanzania continues its journey toward economic self-reliance, the performance of the Tanzania Revenue Authority (TRA) has taken center stage in the country’s budget operations. With consistent improvements in tax collection and administrative reforms, TRA is emerging as the main engine of domestic revenue mobilization. But the key question remains: Can TRA revenues fully support Tanzania’s budget and eliminate the fiscal deficit?

TRA’s Strong Performance: Numbers Speak

From July 2024 to March 2025, TRA collected TZS 24.05 trillion, exceeding the target of TZS 23.21 trillion by TZS 0.84 trillion. This represents a performance rate of 103.62% and a 17% increase compared to the same period in 2023/24.

Projection: By June 2025, TRA is expected to collect over TZS 32 trillion, positioning it to potentially cover most of Tanzania’s recurrent budget.

In comparison, Tanzania typically receives about TZS 7–8 trillion annually in foreign aid and loans. TRA’s revenue is now 4–5 times greater, proving the growing power of domestic resource mobilization.

January 2025 Snapshot: TRA’s Role in Budget Execution

A closer look at January 2025 reveals the real weight of TRA revenues:

• Total Government Revenue: TZS 2,697.8 billion
• TRA Tax Revenue (part of above): TZS 2,222.3 billion
• Total Government Expenditure: TZS 3,576.1 billion

➤ Resulting Budget Deficit:

Deficit = Expenditure – Revenue
= TZS 3,576.1B – TZS 2,697.8B
= TZS 878.3 billion

Even though TRA slightly exceeded its tax collection target by 0.3%, it could not fully cover government spending. This left a financing gap of TZS 878.3 billion, highlighting ongoing fiscal pressure.

Can TRA Close the Budget Gap?

TRA’s improved performance is helping reduce the budget deficit. For example:

• In Q3 (Jan–Mar 2025), TRA overcollected by TZS 100 billion.
• If this overperformance continues each quarter, it would amount to TZS 400–500 billion annually.
• This could reduce the budget deficit by 50% or more.

Still, to completely eliminate the deficit, either:

• Expenditure must be reduced, or
• Other revenues (like non-tax income or grants) must fill the remaining gap.

From Deficit to Surplus — What’s Required?

Let’s do the math:

• Annual Government Expenditure Estimate (FY 2024/25): TZS 38–40 trillion
• Projected TRA Revenue: TZS 32 trillion
• Remaining gap: TZS 6–8 trillion

So even with TRA’s strong performance, Tanzania still faces a potential shortfall of TZS 6–8 trillion annually, unless:

• Development expenditure is strategically reduced,
• Non-tax revenues improve (e.g., state dividends, fees),
• Or external financing is maintained temporarily.

Only when total revenue exceeds expenditure will Tanzania begin to see a budget surplus.

Key Takeaways

TRA Is Leading, But Not Alone

The Tanzania Revenue Authority has undeniably become the pillar of fiscal sustainability. Its strong revenue performance is reducing Tanzania’s dependence on foreign aid and increasing its ability to fund development locally.

But as January’s numbers show, TRA alone is not yet enough to balance the budget. A comprehensive approach — combining efficient spending, improved non-tax revenues, and sustained tax reforms — is essential.

With smart fiscal management and continued TRA performance, Tanzania can achieve true budget independence — and perhaps, a future surplus.

Tanzania Budget Operations vs TRA Revenue

Summary Insights from the Table

• TRA is Tanzania’s main source of domestic financing, contributing over 80% of total monthly revenues and consistently exceeding targets.
• Despite this strength, budget deficits persist due to high recurrent and development spending.
• If current TRA performance continues, it could reduce the deficit by half, but a surplus requires more than just tax revenue — it needs:
  • Better non-tax revenue collection
  • Spending controls
  • Efficient use of resources

In the first nine months of the 2024/25 fiscal year, the Tanzania Revenue Authority (TRA) collected TZS 24.05 trillion, surpassing its target of TZS 23.21 trillion by TZS 0.84 trillion — a performance rate of 103.62%. Compared to the same period in 2023/24, this marks a 17% increase in revenue, highlighting the success of tax reforms, improved compliance, and administrative efficiency. With projected annual collections expected to exceed TZS 32 trillion, domestic revenue now significantly outpaces annual foreign development support (typically TZS 7–8 trillion), positioning TRA as the central force in financing Tanzania’s economic stability and development.

1. Strong Tax Revenue Performance Supports Budget Execution

In January 2025, tax revenue collections reached TZS 2,222.3 billion, slightly exceeding the government’s target by 0.3%. This enabled the government to finance 62% of its total expenditure of TZS 3,576.1 billion using domestic revenue — a clear demonstration of the growing role of TRA in budget sustainability.

Interpretation: With tax revenue making up over 80% of total government revenue, TRA is already the pillar of fiscal financing, especially in a context where development partners' grants and loans cover only TZS 7–8 trillion annually.

2. Record-Breaking Collections Show TRA’s Growing Impact

Between July 2024 and March 2025, TRA collected TZS 24.05 trillion, surpassing its 9-month target of TZS 23.21 trillion — an impressive 103.62% performance rate. This marks a 17% increase from the TZS 20.55 trillion collected in the same period of 2023/24.

✅ Historical growth: In just 4 years, revenue collections have grown by 77% — from TZS 13.59 trillion in FY 2020/21 to TZS 24.05 trillion in FY 2024/25.
🔑 Implication: If sustained, TRA could reach or even surpass TZS 32 trillion annually, covering nearly the entire annual recurrent government budget, and reducing reliance on external debt or aid.

3. Efficient Systems and Reforms Are Paying Off

Key structural and technological reforms — like:

• TANCIS (Customs System),
• EFDs enforcement, and
• Upcoming IDRAS (Domestic Revenue System),

...are making TRA more efficient and transparent. For instance, during Q3 (Jan–Mar 2025) alone, TRA collected TZS 7.53 trillion, exceeding the target of TZS 7.43 trillion by TZS 0.10 trillion (100 billion).

4. Broader Economic Role – Reducing Deficits

In January 2025, the government faced a budget deficit of TZS 878.3 billion. However, TRA’s ability to exceed targets by TZS 100 billion in Q3 shows it can help narrow future fiscal gaps through robust domestic financing.

📌 Example: If TRA consistently overperforms by even TZS 100 billion per quarter, this could amount to TZS 400–500 billion annually, directly offsetting a significant portion of the deficit.

5. Reducing Dependency on Foreign Support

With development support (grants + loans) hovering between TZS 7–8 trillion annually, and TRA potentially generating TZS 32+ trillion, domestic revenue is on the path to becoming Tanzania’s primary engine of development financing.

TRA has demonstrated its potential to be the central engine of Tanzania’s domestic resource mobilization. With annual revenue likely to exceed TZS 32 trillion, and steady quarterly overperformance (e.g., Q3: 101.32%), TRA can reduce the country’s dependency on external aid, close budget deficits, and provide sustainable funding for key development priorities.

If this momentum continues, Tanzania’s economy will shift from externally supported to domestically driven — powered by TRA’s performance and smart fiscal management.

Table: TRA Revenue Performance and Government Budget Comparison

The Tanzania Revenue Authority (TRA) has emerged as a critical engine of domestic resource mobilization. From July 2024 to March 2025, TRA collected TZS 24.05 trillion, exceeding its target of TZS 23.21 trillion with a performance rate of 103.62%. Compared to the same period last year (TZS 20.55 trillion), this reflects a 17% growth. Notably, this figure is three times higher than the typical annual foreign support of TZS 7–8 trillion, demonstrating TRA’s central role in funding national priorities and reducing reliance on external aid.

What the Data Tells Us about TRA and Tanzania’s Budget Operations

1. TRA Is Becoming the Backbone of Tanzania’s Public Finances

The Tanzania Revenue Authority (TRA) has demonstrated exceptional performance by collecting TZS 24.05 trillion in just 9 months, surpassing its target by TZS 0.84 trillion. This performance means that TRA now covers more than 60% of the government’s total expenditure — especially the recurrent budget, which relies heavily on tax revenue.

💡 It shows Tanzania is increasingly funding its own budget — a sign of economic maturity and self-reliance.

2. TRA’s Growth Is Outpacing Economic Challenges

Despite global and regional economic challenges, TRA’s revenue has grown by:

• 17% year-on-year (Jul–Mar),
• 13.47% growth in Q3 alone,
• and 77% over four years (from TZS 13.59T in 2020/21 to TZS 24.05T now).

💡 This signals better tax compliance, improved systems, and strong policy leadership under President Samia.

3. Budget Deficit Still Exists but Can Be Reduced Domestically

The budget deficit in January 2025 was TZS 878.3 billion, but TRA had already overcollected TZS 100 billion in Q3. If this performance continues consistently across quarters, TRA alone could contribute TZS 400–500 billion annually to closing the deficit — nearly half of the gap.

💡 This shows that strategic tax reforms and improved administration can reduce borrowing needs.

4. Domestic Revenue May Replace Foreign Dependency

Currently, Tanzania receives TZS 7–8 trillion annually in loans and grants for development. If TRA hits its projection of TZS 32 trillion, it will collect 4–5 times more than what donors give — effectively making domestic revenue the main engine for development.

💡 Tanzania is shifting from aid-dependence to self-driven development — a major policy milestone.

5. Trust, Technology, and Taxpayer Engagement Are Working

TRA’s success is also due to:

• Better use of digital systems (TANCIS, EFDs, IDRAS),
• Weekend and Thursday services,
• Listening to taxpayers and improving relationships.

💡 People are paying taxes more willingly — which is critical for long-term sustainability.

✅ Final Takeaway:

This data tells us that Tanzania is building a self-reliant economy, and TRA is the cornerstone of that transformation. With good leadership, effective systems, and strong taxpayer engagement, domestic revenue is proving to be more stable and sustainable than foreign aid or debt.