Dodoma. Parliament's Budget Committee has urged the government to strengthen accountability in public expenditure, warning that weak controls on the use of tax revenue could undermine voluntary tax compliance and efforts to increase domestic revenue.
Presenting the committee's views during debate on the Sh62.3 trillion budget for the 2026/27 financial year on Monday, June 15, 2026, committee chairman Mr Mashimba Ndaki said revenue mobilisation must be matched by prudent and transparent use of public funds.
"Efforts to mobilise tax revenue must go hand in hand with accountability in the use of tax proceeds. Without proper expenditure controls, voluntary tax compliance will inevitably decline," he told Parliament.
The committee's review found that despite strong revenue performance, the government continues to face challenges that result in significant revenue leakages.
According to the committee, some businesses continue to evade taxes by failing to use electronic fiscal devices (EFDs) and concealing financial records to reduce their tax liabilities.
Lawmakers also cited widespread smuggling at border posts, attributing the problem to shortages of personnel and inspection equipment, including cargo scanners.
The committee further raised concerns over the growing cost of tax exemptions and incentives, which reached Sh3.12 trillion in 2024, noting that assessments of whether such incentives deliver the intended economic benefits are not conducted regularly.
It also identified weaknesses in revenue collection systems, including internet outages, lack of backup infrastructure and increasing pressure on existing digital platforms, which have contributed to delays in cargo clearance and reduced collection efficiency.
To address the challenges, Parliament recommended further investment in the Tanzania Revenue Authority's digital systems, including the Integrated Domestic Revenue Administration System (IDRAS) and the Tanzania Customs Integrated System (TANCIS), to improve efficiency and minimise revenue losses.
The committee said the systems require about Sh30.2 billion for upgrades and integration with other government platforms.
Lawmakers also proposed the construction of a backup data centre in Dodoma at an estimated cost of Sh70 billion to ensure uninterrupted operations when the main facility experiences technical problems.
To curb smuggling, the committee urged the government to strengthen border patrols, deploy drones and install cargo scanners at key border points.
In addition, Parliament recommended the introduction of tax education in schools and higher learning institutions through collaboration between the Tanzania Revenue Authority (TRA) and the Ministry of Education, Science and Technology.
The recommendations came as Parliament continued debating the government's budget proposals tabled by Finance Minister Khamis Mussa Omar on June 11, 2026.
