Budget 2025/26 seen as Tanzania’s first step towards economic self-reliance

Dar es Salaam. Tanzania’s budget for the 2025/26 financial year has been described as a crucial starting point in the country’s journey towards economic self-reliance, especially at a time when some international donors are scaling down aid or shifting their priorities elsewhere.

This was emphasised by Advocate Senior Manager of the Tax Department at Ernst & Young (EY), Freddy Rugangila,

during an economic and tax stakeholders forum held on June 13, 2025, in Dar es Salaam a day after Finance Minister Dr Mwigulu Nchemba tabled the budget in Parliament.

According to Rugangila, the budget demonstrates the Government’s resolve to reduce dependence on foreign aid by strengthening domestic revenue collection to fund key development projects.

“When you align this with Vision 2050, it’s clear that this budget is the first real step towards building a self-sustaining economy,” Rugangila said. “The proposed new revenue streams, if well implemented, could offer long-term solutions for the national economy.”

He further highlighted the importance of integrating electronic receipt systems with the Tanzania Revenue Authority (TRA) to enhance transparency, close revenue leakages, and boost collection efficiency.

Stakeholders’ key recommendations

In addition to Rugangila’s remarks, stakeholders at the forum proposed five key recommendations to support effective implementation of the budget that include expanding the tax base and exploring new revenue streams.

Others are strengthening tax administration systems, eliminating bureaucratic bottlenecks that frustrate taxpayers, revisiting the proposed travel insurance fee for foreign visitors and fully integrating receipt systems with the TRA.

Meanwhile the CEO of the Tanzania Private Sector Foundation (TPSF), Raphael Maganga, applauded the Government’s commitment to shielding the local production sector from unfair foreign competition. He emphasized the need to broaden the tax base to ensure that the tax burden does not continue falling on a small group of individuals and businesses.

“The Government has demonstrated its intention to grow the economy in partnership with the private sector,” Maganga noted. “But expanding the tax base is critical to spreading the responsibility fairly.”

Maganga also supported measures to tighten regulations on foreigners entering Tanzania for business purposes, noting that this would help safeguard economic opportunities for Tanzanians.

However, EY consultant Beatrice Melkiory raised concerns over the proposed $44 travel insurance fee for foreigners visiting mainland Tanzania, a fee similar to the one introduced in Zanzibar in October 2024.

“This could discourage some tourists, especially if not well explained or perceived as an unnecessary cost,” she warned.

Although the fee is designed to cover medical emergencies, lost luggage, and emergency travel, stakeholders stressed the importance of careful implementation to avoid negative effects on tourism.

Budget priorities and the road ahead

The 2025/26 budget focuses on several key priorities, including preparations for the upcoming general election, construction of sports infrastructure for Afcon 2027, implementation of strategic development projects, and improving the overall business environment.

Stakeholders further underscored the need to remove legal and technological barriers that delay tax compliance, alongside upgrading ICT systems to enhance efficiency throughout the entire revenue collection process.

Overall, stakeholders welcomed the budget’s focus on building economic self-reliance but emphasized that success will depend on the Government’s commitment to implementing their recommendations.

Strengthening domestic revenue, creating a conducive business environment, and safeguarding key sectors will be critical to accelerating sustainable economic growth.