This is how govt plans to finance its Sh33tr budget

Friday June 14 2019

Ambassadors and leaders from various

Ambassadors and leaders from various institutions and international organisations follow proceedings in Parliament during the reading of the government’s main budget speech for the year 2019/2020 in Dodoma yesterday. PHOTO | EDWIN MJWAHUZI 

By Alawi Masare @AMasare

Dar es Salaam. The government has revealed its revenue sources for its Sh33.1 trillion expenditure plan in the 2019/20 financial year.
Finance and Planning minister Philip Mpango told Parliament yesterday that the government had increased its tax collection targets from Sh18 trillion estimated for the current financial year to Sh19.1 trillion.
Apart from the taxes, the government also expects to get Sh3.18 trillion as non-tax revenue.
The government promised to undertake various policy and administrative measures to strengthen and simplify revenue collection.

Dr Mpango mentioned some of the measures as establishing an independent ‘Office of Tax Ombudsman’ that will be responsible for receiving complaints from taxpayers.

“In order to increase domestic revenue collection, currently the government is finalising integrating the domestic revenue collection systems through Electronic Fiscal Device Management System (EFDMS).

“This measure is expected to curb revenue leakages in processing of tax refunds and issuance of fake receipts,” said Dr Mpango. According to him, development partners are expected to contribute Sh2.8 trillion while local governments will generate Sh765.5 billion.
The development partners’ contribution include Sh2.31 trillion, which are grants and concessional loans for development projects, Sh199.5 billion for Sector Basket Funds and Sh272.8 billion for the General Budget Support (GBS).

As the domestic revenue sources are expected to provide Sh23.05 trillion for the budget, the government will also borrow Sh7.2 trillion from both domestic and foreign sources.

Development expenditure is estimated at Sh12.25 trillion, which is 37.0 per cent of the total budget, of which Sh9.74 trillion is from internal sources and Sh2.51 trillion is from external sources.


The development expenditure includes Sh2.48 trillion budgeted for the construction of the standard gauge railway and Sh1.44 trillion for the Stiegler’s Gorge hydroelectric power project. 

Sh788.80 billion is planned for railway, water and rural electrification while Sh450.0 billion is for the higher education students’ loans.
The education sector will get Sh288.50 billion for fee-free basic education policy implementation.