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 just nine months of the 2024/25 fiscal year, the Tanzania Revenue Authority (TRA) has collected TZS 24.05 trillion, marking a 17% increase compared to TZS 20.55 trillion collected during the same period in 2023/24. With projections showing total annual collections could exceed TZS 32 trillion, TRA’s performance now rivals the country’s reliance on external development financing — which typically stands at TZS 7–8 trillion annually from loans and grants. This growth signals that domestic revenue can progressively become a sustainable source for financing development projects, reducing dependence on foreign aid.

Revenue Collection Performance – January to March 2025 (Q3, FY 2024/25)

• Collected: TZS 7.53 trillion
• Target: TZS 7.43 trillion
• Performance: 101.32% of the target
• Growth: 13.47% compared to the same period in FY 2023/24 (which had TZS 6.63 trillion collected)

TRA exceeded the target by TZS 0.10 trillion (100 billion).

Cumulative Revenue – July 2024 to March 2025 (First 9 months)

• Collected: TZS 24.05 trillion
• Target: TZS 23.21 trillion
• Performance: 103.62%
• Growth: 17.01% compared to the same period in FY 2023/24 (TZS 20.55 trillion)

This is the highest ever 9-month collection in TRA’s history.

Historical Growth Comparison

• FY 2020/21 (Same period): TZS 13.59 trillion
• FY 2024/25 (Current period): TZS 24.05 trillion
• Growth in 4 years: 77% increase

This highlights the impact of reforms since President Samia Suluhu Hassan assumed office.

Key Drivers of Improved Revenue Collection

1. Leadership Directives

• Implementation of President Samia’s instructions to improve voluntary tax compliance.

2. Internal Improvements at TRA

• Improved staff discipline and innovation.
• Engagement with business communities and tax education.
• Deployment of the enhanced Customs Management System (TANCIS) in January 2025.
• Better enforcement of Electronic Fiscal Devices (EFDs).
• Weekend services at TRA offices (Saturday & Sunday).
• Weekly “Taxpayer Listening Day” (every Thursday).

3. Government Reforms and Environment

• Port services improvement led to increased imports/exports.
• Enhanced relations with investors.
• Rise in the number of Authorized Economic Operators (AEOs).

Focus for April – June 2025 (Q4)

• Finalization of IDRAS (Domestic Revenue System) by June 2025.
• Intensified tax education campaigns.
• Enforcement of electronic receipt issuance.
• Fair and equitable taxation (no favoritism).
• Collaboration with the Presidential Tax Review Taskforce.
• Strengthening audit and investigation units to fight tax evasion.

Tanzania’s revenue performance and how the Tanzania Revenue Authority (TRA) has improved in collecting taxes.

1. Strong Revenue Growth

• TRA collected TZS 24.05 trillion from July 2024 to March 2025.
• This is TZS 3.5 trillion more than the same period last year.
• It shows a 17% increase, which is a sign of strong economic activity and better tax compliance.

TRA is not only meeting but exceeding its targets.

2. Better Efficiency and Reforms Are Working

• TRA’s systems like TANCIS and EFD enforcement are helping track and collect taxes better.
• Opening offices on weekends and listening to taxpayers every Thursday builds trust and accessibility.

It shows that management reforms are paying off.

3. Business and Government Relationship is Improving

• The number of registered businesses and investors is going up.
• TRA is working more closely with them instead of just punishing—a shift from fear to collaboration.

4. Taxpayer Engagement is Crucial

• TRA is thanking taxpayers and encouraging patriotism.
• This signals that voluntary compliance is improving—people are paying taxes because they trust the system more.

5. Tanzania is Building a Stronger Economy

• A 77% growth in 4 years (from TZS 13.6T in 2020/21 to TZS 24.05T now) tells us:
  • There’s real momentum.
  • The government's focus on transparency, digital systems, and service delivery is helping.

🔑 In Simple Terms:

This report shows that Tanzania is collecting more tax than ever before, because:

• People are paying more willingly.
• TRA is doing a better job.
• The government is creating a good business environment.

Key Revenue Collection Figures – TRA Report (March 2025)

Could Tax Collections Alone Power Tanzania’s Development Projects?

Current Performance Shows Great Potential

From this report:

• TRA collected TZS 24.05 trillion in 9 months (July 2024 – March 2025).
• If this trend continues, TRA could collect over TZS 32 trillion by June 2025.

🧮 Estimation: If Q4 (Apr–Jun) brings another ~TZS 8 trillion → Annual Total = 24.05T + ~8T = ~TZS 32T

📉 Tanzania’s 2023/24 Budget Financing Gap (Aid + Loans)

According to past budgets:

• In 2023/24, Tanzania expected about TZS 7.26 trillion from concessional loans and grants.
• Out of a total budget of TZS 44.4 trillion, external financing accounted for ~16.4%.

🧾 So the financing gap Tanzania usually covers with aid/loans = ~TZS 7.2–8 trillion per year

🧠 What This Means

TRA already:

• Collected TZS 24.05T in just 9 months.
• Could reach TZS 32T annually soon.

If TRA can sustain and increase revenue growth:

• It can cover the same amount (or more) than what Tanzania receives from foreign aid and concessional loans.
• Example: TRA exceeding annual revenue by even just 10% = ~TZS 3T extra — halfway to the aid/loan gap.

📌 Key Considerations

Conclusion

Yes, TRA has the potential to replace or reduce Tanzania’s dependence on aid and loans, especially if:

• The current growth trend continues (13%–17% yearly),
• Reforms in tax systems and transparency are sustained,
• The government continues creating a good business and investment climate.

If Tanzania can fully fund development through its own taxes, it becomes more independent and self-reliant.