The Tanzania Revenue Authority (TRA) achieved significant milestones in tax collection during the 2024/25 fiscal year (July 2024 – June 2025), reflecting enhanced administrative efficiency, taxpayer compliance, and technological advancements.

Key Highlights

• Total Collection: TZS 32.26 trillion, exceeding the target of TZS 31.05 trillion (103.9% performance rate).
• Annual Growth: 16.7% increase from TZS 27.64 trillion in 2023/24.
• Quarter 4 (April – June 2025): Collected TZS 8.22 trillion against a target of TZS 7.84 trillion (104.8% performance, 15.8% growth from Q4 2023/24).
• Monthly Achievements:
  • Consistently surpassed monthly targets for 12 consecutive months, a record since TRA’s establishment in 1996.
  • Average monthly collection: TZS 2.69 trillion, the highest in TRA history.
  • Peak collection: TZS 3.58 trillion in December 2024.
• Major Milestones:
  • Exceeded the annual target for the first time since 2015/16.
  • Recorded the highest single-month collection in December 2024.

Monthly Collection Breakdown (FY 2024/25)

Revenue Forecast for FY 2025/26

The TRA has set a target of TZS 36.066 trillion for the 2025/26 fiscal year, reflecting an anticipated growth of 11.8% from 2024/25. This ambitious target is supported by:

• Continued taxpayer education and compliance initiatives.
• Deployment of modern tax systems (IDRAS, TANCIS).
• Strengthened cooperation with business communities.
• Enhanced staff performance monitoring and accountability.

Projected Monthly Targets for 2025/26

Implications for Tanzania’s Economic Development (2025/26 Budget)

The TRA’s strong revenue performance in 2024/25 and the optimistic forecast for 2025/26 are critical for funding Tanzania’s TZS 56.49 trillion budget for 2025/26, which aims to achieve 6% GDP growth and aligns with the Third Five-Year National Development Plan (2021/22–2025/26) and Vision 2025. Below are the key implications for economic development:

1. Strengthened Fiscal Capacity

• Domestic Revenue Mobilization: The TRA is projected to collect TZS 36.066 trillion in 2025/26, contributing significantly to the budgeted TZS 38.9 trillion in domestic revenues (70.1% of the total budget). This reduces reliance on external financing, which is expected to contribute TZS 16.02 trillion (including grants and loans).
• Fiscal Discipline: The TRA’s consistent overperformance (103.9% in 2024/25) and a controlled budget deficit (TZS 30 billion in January 2025) reflect improved tax administration and fiscal management, enabling sustainable funding for development projects.
• Reduced External Debt Dependency: With domestic revenue covering over 70% of the budget, Tanzania is moving toward greater self-reliance, despite an external debt of $32.89 billion in September 2024.

2. Support for Flagship Infrastructure Projects

The TRA’s revenue surplus supports the completion of strategic projects outlined in the 2025/26 budget, including:

• Standard Gauge Railway (SGR): Enhancing transport infrastructure to boost trade and regional connectivity.
• Julius Nyerere Hydropower Project (2,115 MW): Increasing electricity production to support industrial growth.
• Ruhudji (358 MW) and Rumakali (222 MW) Hydropower Plants: Expanding energy access for economic activities.
• Liquefied Natural Gas (LNG) Project: Positioning Tanzania as a regional energy hub.
• John Magufuli Bridge (Kigongo-Busisi): Improving domestic and cross-border connectivity.

These projects drive industrial capacity, competitiveness, and job creation, aligning with the budget’s theme of “Inclusive Economic Transformation through Strengthening Domestic Revenue Mobilization.”

3. Economic Growth and Job Creation

• GDP Growth: The 2025/26 budget targets 6% GDP growth, building on 5.5% growth in 2024 (TZS 156.6 trillion GDP). The TRA’s revenue performance supports investments in key sectors like agriculture (26% of GDP), construction (13%), and mining (10%), which are critical for economic expansion.
• Job Creation: The budget aims to create employment opportunities, with 41,117 jobs projected from $3.7 billion in registered investment projects (January–May 2025). Strong tax revenue enables funding for human capital development, including education and health initiatives.
• Private Sector Growth: Improved tax compliance and a 20% annual increase in private sector credit indicate robust business activity, further supported by tax reforms like VAT exemptions for farmers, producers, and clean energy.

4. Social and Human Capital Development

• Health and Education: The 2025/26 budget allocates funds for training 28,000 health workers, expanding specialist services to 9 referral hospitals, and revitalizing pharmaceutical production (e.g., ARV manufacturing in Arusha). Education investments focus on skills development to support industrialization.
• Elections and Social Services: Significant allocations for the 2025 general elections and social welfare programs ensure inclusive growth, funded primarily through domestic revenue.

5. Digital and Technological Advancements

• Tax Systems: The deployment of modern systems like IDRAS and TANCIS has enhanced tax collection efficiency, contributing to the TRA’s record performance. These systems are expected to sustain revenue growth in 2025/26.
• Digital Economy: The budget supports ICT growth (projected at 13.5% by 2026), including over 400 communication towers in rural areas and the National Digital Economy Strategic Framework 2024–2034, fostering digital inclusivity and economic transformation.

6. Challenges and Risks

• Tax Base Expansion: Tanzania’s tax-to-GDP ratio (14.9% in 2024/25) remains below the Sub-Saharan Africa average (18.6%), indicating a need to broaden the tax base, particularly in agriculture and the informal economy.
• Global and Regional Risks: Potential global economic slowdown, geopolitical tensions, and the 2025 general elections may dampen investment and growth.
• Debt Management: Rising external debt ($32.89 billion) requires prudent fiscal policies to maintain creditworthiness.

Conclusion

The TRA’s exceptional performance in 2024/25, with a record-breaking TZS 32.26 trillion collected, underscores Tanzania’s progress in domestic revenue mobilization. The forecasted TZS 36.066 trillion for 2025/26 will play a pivotal role in funding the TZS 56.49 trillion budget, supporting infrastructure, industrialization, and social development. By reducing reliance on external financing and fostering inclusive growth, Tanzania is poised to achieve its 6% GDP growth target and advance toward Vision 2050. However, addressing challenges like the narrow tax base and global economic uncertainties will be critical to sustaining this trajectory.

Tanzania’s inflation in March 2025, as detailed in the April 2025 Monthly Economic Review, shows an upward trend in headline inflation, driven primarily by rising food and energy prices, while core inflation has declined. Below, we outline the current inflation trends and their drivers, using specific figures from the document to provide clarity.

Headline Inflation Trend

Figure: Headline inflation rose to 3.3% in March 2025, up from 3.0% in March 2024.

Explanation:

• Trend: The 0.3 percentage point increase indicates a moderate upward trend in overall price levels, but inflation remains within national targets and regional benchmarks of the East African Community (EAC) and Southern African Development Community (SADC).
• Drivers: The document attributes this rise primarily to increases in food and energy prices (Page 3). These components have exerted significant upward pressure on the Consumer Price Index (CPI), which is based on a 2020=100 index.
• Context: Despite the increase, headline inflation is relatively stable, supported by the Bank of Tanzania’s monetary policy, which maintains the Central Bank Rate at 6% to keep inflation expectations below the 5% medium-term target.

Food Inflation Trend

Figure: Food inflation surged to 5.4% in March 2025, up from 1.4% in March 2024.

Explanation:

• Trend: The sharp 4.0 percentage point increase reflects significant price pressures in the food sector, which has a CPI weight of 26.1%.
• Drivers: Higher prices for staple crops—maize, rice, and beans—are the primary drivers, amplified by logistical challenges in transportation due to seasonal heavy rains. These rains disrupted supply chains, increasing costs for producers and traders.
• Mitigation: The National Food Reserve Agency (NFRA) held 587,062 tonnes of food stocks (mainly maize and paddy) and released 32,598 tonnes to local traders by March 2025, which helped mitigate further price spikes. The overall food supply remained adequate, preventing even higher inflation.
• Impact: The document notes that unprocessed food inflation’s contribution to overall inflation has increased, making it a key driver of the 3.3% headline rate.

Core Inflation Trend

Figure: Core inflation decreased to 2.2% in March 2025 from 3.9% in March 2024.

Explanation:

• Trend: The 1.7 percentage point decline indicates easing price pressures from non-food items, which constitute 73.9% of the CPI basket.
• Drivers: Core inflation excludes volatile items like food, energy, and utilities. The reduction suggests stable or declining prices for services and non-food goods, reflecting lower underlying inflationary pressures.
• Impact: The document highlights that core inflation’s contribution to overall inflation has gradually diminished, with unprocessed food inflation taking a larger role. This decline helps moderate the headline inflation rate despite food and energy spikes.

Energy, Fuel, and Utilities Inflation Trend

Figure: Energy, fuel, and utilities inflation increased to 7.9% in March 2025 from 6.6% in March 2024.

Explanation:

• Trend: The 1.3 percentage point rise makes this the highest inflation component, with a CPI weight of 5.7%.
• Drivers: The increase is primarily due to rising prices of petroleum products and wood charcoal, the latter linked to scarcity following seasonal rains (Page 5). The document notes the weight of wood charcoal in the energy component but does not quantify it.
• Impact: High energy inflation significantly contributes to the 3.3% headline rate, as energy costs affect transportation, production, and household expenses, amplifying overall price pressures.

Additional Context and Drivers

• Global Commodity Prices: Rising global fertilizer prices (up 2% to USD 615.13 per tonne) increase agricultural input costs, indirectly contributing to food inflation by raising production expenses. Conversely, a 4% drop in crude oil prices to USD 70.70 per barrel may have tempered energy inflation slightly, though domestic petroleum price hikes dominated.
• Monetary Policy: The Bank of Tanzania’s stable Central Bank Rate (6%) and adequate liquidity management (no reverse repo auctions) help anchor inflation expectations, preventing runaway price increases despite food and energy pressures.
• CPI Dynamics: The CPI weights show food (26.1%) and energy (5.7%) as smaller shares compared to core items (73.9%), but their volatility gives them outsized impacts on headline inflation. Month-on-month data shows food inflation at 2.5% and energy at 2.9% for March 2025, reinforcing their role as key drivers.

Conclusion

In March 2025, Tanzania’s headline inflation rose to 3.3% (from 3.0% in 2024), driven by surging food inflation (5.4%, up from 1.4%) and energy, fuel, and utilities inflation (7.9%, up from 6.6%). Food price increases, fueled by maize, rice, and bean costs and rain-related logistical challenges, and energy price hikes, driven by petroleum and wood charcoal, are the primary drivers. Core inflation’s decline to 2.2% (from 3.9%) moderate’s overall pressures, but unprocessed food’s growing contribution underscores its significance. The NFRA’s 587,062-tonne food stock and 32,598-tonne release helped contain food inflation, keeping headline inflation within EAC and SADC benchmarks.

Key Figures: Tanzania’s Inflation Trends and Drivers (March 2025)

Notes:

• All inflation figures reflect March 2025 unless stated otherwise.
• Food inflation driven by maize, rice, bean prices, and logistical issues from rains.
• Energy inflation driven by petroleum and wood charcoal price hikes.
• Source refer to the April 2025 Monthly Economic Review.

Tanzania’s economic performance in March 2025, as detailed in the April 2025 Monthly Economic Review, shows both alignment and divergence with global economic trends. Below, we compare Tanzania’s inflation, growth outlook, and commodity market influences with global forecasts, using specific figures to illustrate the relationship.

Inflation Trends

Global Trend: The IMF forecasts global inflation at 4.3% for 2025, declining to 3.6% in 2026, reflecting a slower-than-expected easing due to trade tensions and persistent pressures in advanced economies. Inflation is decreasing but remains above pre-pandemic levels in many countries.

Tanzania’s Performance: Tanzania’s headline inflation was 3.3% in March 2025, up from 3.0% in March 2024, driven by food (5.4%) and energy, fuel, and utilities (7.9%) price increases (Pages 3, 4, 5). Core inflation, excluding volatile items, fell to 2.2% from 3.9%.

Tanzania’s inflation is lower than the global forecast of 4.3%, aligning with the global trend of declining inflation. However, its food and energy-driven inflation spike mirrors global pressures from supply constraints and trade disruptions. Tanzania’s inflation remains within national and regional (EAC and SADC) targets, indicating stronger control compared to some advanced economies facing persistent pressures.

Economic Growth Outlook

Global Trend: The IMF revised global growth downward to 2.8% for 2025 and 3.0% for 2026, from 3.3% for both years, due to trade tensions, unpredictable policies, and diminishing fiscal buffers. Risks include climate change and limited fiscal space in developing economies.

Tanzania’s Performance: The document does not provide a specific GDP growth rate for Tanzania in 2025 but notes that monetary policy supports economic growth while maintaining inflation below 5%. Domestic challenges include rising food and energy prices and logistical issues from seasonal rains.

Tanzania faces similar downside risks as the global economy, such as trade tensions and climate-related disruptions (e.g., heavy rains impacting food transport). However, its stable monetary policy (Central Bank Rate at 6%) and adequate liquidity suggest resilience compared to developing economies with limited fiscal space. Tanzania’s growth is likely moderated but supported by prudent policies, aligning with the global trend of cautious optimism.

Commodity Market Influences

Global Trend: Commodity markets show divergent trends:

• Gold prices rose 3% to USD 2,983.25 per ounce due to safe-haven demand.
• Fertilizer prices increased 2% to USD 615.13 per tonne due to supply constraints.
• Palm oil prices edged up 0.2% to USD 1,069 per tonne on Asian demand.
• Crude oil prices fell 4% to USD 70.70 per barrel due to oversupply.
• Coffee and sugar prices dropped 2% and 1.5%, respectively, due to improved production.

Tanzania’s Performance: Tanzania, a commodity-dependent economy, is impacted by these trends:

• Gold: Rising gold prices benefit Tanzania’s export revenues, as gold is a major export.
• Fertilizer: Higher fertilizer prices increase agricultural input costs, potentially raising food prices (e.g., maize, rice, beans), contributing to 5.4% food inflation.
• Palm Oil: Stable palm oil prices support Tanzania’s edible oil sector, aligning with robust Asian demand.
• Crude Oil: Lower oil prices reduce Tanzania’s import bill, easing pressure on energy inflation (7.9%) despite domestic petroleum price hikes.
• Coffee and Sugar: Declining coffee and sugar prices may reduce export earnings, impacting trade balance.

Tanzania’s economy is closely tied to global commodity price movements. Positive trends (gold, palm oil) bolster exports, while negative trends (fertilizer, coffee, sugar) pose challenges. The drop in crude oil prices provides relief, aligning with global oversupply benefits, but domestic supply chain issues amplify food price pressures, diverging from global commodity price declines in some sectors.

Policy and Structural Considerations

Global Trend: The global economic outlook is tilted downward due to trade tensions, unpredictable policies, and climate change, particularly affecting developing economies with limited fiscal buffers.

Tanzania’s Performance: Tanzania’s monetary policy remains stable, with the Bank of Tanzania maintaining the Central Bank Rate at 6% and ensuring liquidity through interbank rate management (Page 5). The National Food Reserve Agency’s release of 32,598 tonnes of maize and paddy mitigated food inflation (Page 4). However, logistical challenges and climate-related rains increase costs.

Tanzania’s proactive policies align with global efforts to stabilize economies amid uncertainties. Its food reserve strategy counters global supply chain disruptions, and monetary stability mitigates trade tension impacts. However, climate change (seasonal rains) and limited fiscal space, common in developing economies, pose shared challenges.

Conclusion

Tanzania’s economic performance in March 2025 aligns with global trends in declining inflation (3.3% vs. 4.3% globally) and cautious growth outlooks, supported by stable monetary policy and commodity export strengths (e.g., gold). However, it faces unique pressures from food (5.4%) and energy (7.9%) inflation, driven by domestic logistical issues and global commodity price hikes (e.g., fertilizer). While global risks like trade tensions and climate change affect Tanzania, its prudent policies and food reserves provide resilience, positioning it favorably among developing economies.

Key Economic Indicators: Tanzania vs. Global Trends (March 2025)

Notes:

• Tanzania’s data reflects March 2025 unless stated otherwise.
• Global figures are IMF forecasts or commodity price changes for March 2025.
• Source pages refer to the April 2025 Monthly Economic Review.