Tanzania's Finance Minister, Dr. Mwigulu Nchemba, has tabled a TZS 56.49 trillion ($21.6 billion) national budget proposal for the fiscal year 2025/26, marking a 12% increase from the previous year.
The government plans to finance the budget through TZS 40.47 trillion in domestic revenues, TZS 1.07 trillion in grants, and TZS 14.95 trillion in borrowings comprising TZS 6.27 trillion in domestic loans and TZS 8.68 trillion from external sources.
The proposed fiscal plan allocates significant resources toward personnel costs (TZS 9.17 trillion), goods and services (TZS 5.58 trillion), debt interest payments (TZS 6.49 trillion), and transfers to public institutions and local authorities (TZS 22.17 trillion).
A further TZS 7.72 trillion is earmarked for domestic and external debt repayments. The government is targeting a real GDP growth rate of 6.0% in 2025, up from an estimated 5.5% in 2024, with inflation expected to remain within a 3.0%–5.0% band. Domestic revenue is projected to rise to 16.7% of GDP, while tax revenue is set to reach 13.3%.
The 2025/26 budget emphasizes completion of flagship infrastructure projects, revitalization of high-impact productive sectors, and improvements in the business and investment climate.
Strategic priorities include preparation for hosting the 2027 Africa Cup of Nations, funding the 2025 general election entirely from domestic resources, and further investments in health, education, and logistics.
In a bid to strengthen tax administration and widen the revenue base, the government announced a suite of reforms.
These include enhanced use of digital tax systems (TAUSI), mandatory use of electronic fiscal devices (EFDs), and expanded oversight of local revenue streams.
The government also plans to formalize taxation of digital services by including online marketplaces and advertising platforms in its tax net.
Key tax policy changes include VAT exemptions on agricultural inputs, locally produced fertilizers and cooking oil, domestically printed newspapers, and compressed natural gas for vehicles.
Conversely, exemptions will be removed from bitumen and gaming supplies. Excise duty increases are proposed for alcoholic beverages, telecommunications services, and fuel.
The government will also introduce new levies on imported vehicles and machinery, along with passenger surcharges on rail and air transport.
To support public health and social protection, 70% of new excise revenues will be allocated to the AIDS Trust Fund, with the remaining 30% directed to the newly established universal health insurance scheme.
The government will also streamline tax obligations for small transport operators, including motorcycles and three-wheelers, and reduce hotel levies and licensing costs to support the tourism and SME sectors.
Tanzania continues to position itself as a competitive investment destination in East Africa. In line with this, the budget proposes amendments to the Business Licensing Act to prevent arbitrary closure of businesses and empower the Trade Minister to reserve specific sectors for domestic participation, reinforcing inclusive economic growth.
Minister Nchemba concluded by affirming the government’s commitment to sustaining fiscal stability, accelerating economic transformation, and delivering on the targets of Tanzania’s Vision 2025.