"A forensic breakdown of Tanzania's budgetary operations — how much the government collected, what it spent, and what the numbers reveal about fiscal health and investment climate in 2026."
Domestic revenue collections in January 2026 remained robust at TZS 3,340.2 billion — surpassing the monthly target by 5.4%. Central Government revenue alone reached TZS 3,156.4 billion, reflecting strengthened tax administration and improved taxpayer compliance across all major categories.
Tanzania's tax performance in January 2026 demonstrates the effectiveness of ongoing TRA reforms and digital tax administration systems. Three of four tax categories exceeded their monthly targets, led by a strong surge in income tax collections.
Income tax collections grew robustly year-on-year, outpacing the target by 13.9% — reflecting broad-based expansion in formal sector employment, buoyant private sector credit (up 24.4%), and the Bank's specialized credit facilities for SMEs that are widening the taxable base. Import duties at +9.8% above target signal sustained trade momentum and rising import values, particularly in capital goods and industrial supplies. These trends suggest tax buoyancy above 1.0 — meaning tax revenue is growing faster than the economy, a positive signal for fiscal sustainability.
Non-tax revenue in January 2026 reached TZS 394.1 billion — falling short of the monthly target by 12.1%. This performance reflects timing differences in fee collection and payments from state-owned enterprises, though it remains substantially higher than the TZS 347.8 billion collected in January 2025.
The Government continued to align spending with available resources. Total expenditure of TZS 3,751.7 billion was split between recurrent commitments (TZS 2,689.9 billion, 71.7%) and development investment (TZS 1,061.8 billion, 28.3%), maintaining a consistent focus on infrastructure and capital formation.
Understanding the composition of government spending is crucial for investors. A higher development expenditure ratio signals infrastructure expansion, while the recurrent structure reveals fiscal rigidity and the cost of running government operations.
Of total recurrent spending, wages & salaries accounted for TZS 1,097.5 billion (40.8%), interest payments for TZS 492.6 billion (18.3%), and other goods, services, and transfers TZS 1,099.9 billion (40.9%). Interest payments of TZS 492.6 billion (down from an estimate of TZS 548.2 billion) reflect better-than-projected debt servicing conditions — partly supported by declining Treasury bill yields, which fell from 11.93% in February 2025 to 5.68% in February 2026.
Cumulative performance against the full-year FY 2025/26 budget provides a clearer picture of fiscal trajectory and whether Tanzania is on track to meet its annual revenue and expenditure targets.
All figures sourced directly from the Bank of Tanzania March 2026 Monthly Economic Review, Table A2 (Central Government Operations). All values in Billions of TZS unless stated.
| Revenue Category | FY 2025/26 Annual Budget | Jul–Jan 2026 Estimate | Jul–Jan 2026 Actual | Jan 2026 Estimate | Jan 2026 Actual | Jan 2025 Actual | YoY Change | vs Target |
|---|---|---|---|---|---|---|---|---|
| Total Revenue (incl. LGAs) | 40,466.1 | 23,806.5 | 24,596.3 | 3,624.1 | 3,340.2 | — | — | +5.4% ▲ |
| Central Govt Revenue | 36,857.7 | 22,821.2 | 23,638.5 | 3,488.7 | 3,156.4 | — | — | — |
| Total Tax Revenue | 32,176.0 | 18,518.2 | 20,302.6 | 2,578.9 | 2,762.3 | — | +9.9% ▲ | +7.1% ▲ |
| Taxes on Imports | 11,563.0 | 6,884.7 | 7,171.7 | 977.2 | 1,073.0 | 839.4 | +27.8% ▲ | +9.8% ▲ |
| Income Tax | 11,367.9 | 6,378.7 | 8,004.0 | 747.1 | 850.8 | 677.7 | +25.5% ▲ | +13.9% ▲ |
| VAT & Excise (Local Goods) | 7,016.5 | 3,866.0 | 3,774.1 | 661.4 | 622.6 | 553.0 | +12.6% ▲ | -5.9% ▼ |
| Other Taxes | 4,887.7 | 1,388.9 | 1,352.7 | 193.3 | 216.0 | 152.3 | +41.8% ▲ | +11.7% ▲ |
| Non-Tax Revenue | 4,681.7 | 4,303.0 | 3,335.9 | 909.7 | 394.1 | 347.8 | +13.3% ▲ | -56.7% ▼ |
| LGA Own Sources | 1,680.5 | 985.3 | 957.8 | 135.4 | 183.8 | — | — | +35.7% ▲ |
| Grants | 1,069.9 | 577.2 | 511.1 | 86.8 | 3.5 | — | — | -96.0% ▼ |
| Expenditure Category | FY 2025/26 Annual Budget | Jul–Jan 2026 Estimate | Jul–Jan 2026 Actual | Jan 2026 Estimate | Jan 2026 Actual | Jan 2025 Actual | YoY Change |
|---|---|---|---|---|---|---|---|
| Total Expenditure | 48,775.0 | 29,051.0 | 27,511.4 | 4,146.0 | 3,751.7 | — | — |
| Recurrent Expenditure | 31,281.3 | 17,998.1 | 17,953.5 | 2,694.8 | 2,689.9 | — | 71.7% of total |
| Wages & Salaries | 10,917.5 | 7,581.7 | 7,590.5 | 1,101.4 | 1,097.5 | 942.5 | +16.4% ▲ |
| Interest Payments (Total) | 6,493.7 | 3,655.7 | 3,174.9 | 548.2 | 492.6 | 375.1 | +31.3% ▲ |
| of which: Domestic | 3,697.3 | 2,153.3 | 2,149.7 | 373.8 | 386.0 | — | — |
| of which: Foreign | 2,796.4 | 1,502.5 | 1,025.2 | 174.4 | 106.6 | — | — |
| Other Goods, Services & Transfers | 7,088.6 | 6,760.7 | 7,188.1 | 1,045.1 | 1,099.9 | 1,040.4 | +5.7% ▲ |
| Development Expenditure | 17,493.7 | 11,052.9 | 9,557.9 | 1,451.2 | 1,061.7 | 1,218.1 | -12.8% ▼ |
| Local Development | 12,117.8 | 8,078.1 | 7,651.0 | 934.2 | 801.0 | — | — |
| Foreign-Funded Development | 5,375.9 | 2,974.8 | 1,906.9 | 517.1 | 260.7 | — | — |
| Item | FY Budget | Jul–Jan Estimate | Jul–Jan Actual | Jan Estimate | Jan Actual |
|---|---|---|---|---|---|
| Balance Before Grants | -8,308.9 | -5,244.5 | -2,915.0 | -522.0 | -411.5 |
| Grants | 1,069.9 | 577.2 | 511.1 | 86.8 | 3.5 |
| Overall Balance (After Grants) | -7,239.0 | -4,651.1 | -3,542.5 | -435.2 | -107.2 |
| Foreign Financing (Net) | 4,286.3 | 2,014.8 | 1,697.3 | 101.3 | 18.0 |
| Loan Drawdowns | 5,966.4 | 4,327.9 | 3,496.8 | 440.3 | 257.2 |
| Amortization (Repayments) | -4,389.7 | -2,341.4 | -1,819.7 | -339.0 | -239.1 |
| Domestic Financing (Net) | 2,952.6 | 2,636.3 | 1,845.1 | 333.8 | 89.1 |
| Bank Borrowing | 2,466.1 | 2,201.9 | 239.0 | 278.8 | 73.9 |
| Non-Bank (Net of Amortization) | 486.5 | 434.4 | 1,606.2 | 55.0 | 15.3 |
Note: Positive financing = government borrowing; negative = repayments/deposit build-up. Source: Bank of Tanzania — Table A2 (Ministry of Finance data). Actual 2026 figures are provisional.
TICGL's assessment of Tanzania's fiscal position and its implications for investors, businesses, and development partners operating in Tanzania.
Tanzania's fiscal performance in January 2026 reveals a government that is collecting more than expected (revenue +5.4% vs target) while spending less than budgeted (expenditure -9.2% vs estimate). This combination narrows the budget deficit and reduces domestic borrowing pressure — which in turn helps keep Treasury bill yields down (5.68% in Feb 2026 vs 11.93% in Feb 2025) and lowers the cost of private sector credit. For investors, this fiscal prudence is a strong signal of macroeconomic stability and government capacity to maintain development spending without crowding out private investment.