Key focus areas in Finance ministry’s Sh20.2 trillion budget

Dodoma. The Ministry of Finance yesterday presented a record Sh20.19 trillion budget for the 2025/26 financial year, placing strong emphasis on public debt servicing and the introduction of a national policy to manage public assets more effectively.

The budget represents a 22.05 percent increase from the Sh16.54 trillion allocated in the 2024/25 financial year.

Presenting the budget in Parliament, Finance and Planning minister Mwigulu Nchemba revealed that Sh14.22 trillion has been earmarked for servicing government debt, which remains the largest component of the ministry’s recurrent expenditure.

In total, the ministry plans to spend Sh19.43 trillion on recurrent costs. This includes Sh1.10 trillion allocated to public service salaries and Sh18.33 trillion for other recurring expenses. Development expenditure is set at Sh757.79 billion.

The minister also announced a key strategic intervention—developing a policy on the management of public assets. The aim, he said, is to improve the use and oversight of government-owned assets to maximise value and enhance transparency in public resource management.

“The policy will provide clear guidelines for identifying, recording, valuing and using public assets in a way that contributes to economic growth,” Dr Nchemba said.

In terms of revenue, the ministry is targeting the collection of Sh50.17 trillion in the 2025/26 fiscal year to finance the broader government budget. Of this amount, Sh34.10 trillion is expected to be raised by the Tanzania Revenue Authority (TRA) through tax and non-tax revenue collections.

The balance is expected to be sourced from grants (Sh1.07 trillion), concessional and commercial loans from both domestic and external lenders (Sh14.95 trillion) and other non-tax revenues (Sh53.54 billion).

To improve revenue collection and fiscal discipline, the Finance ministry plans to introduce a unified electronic system for government payment invoices and strengthen the digital infrastructure supporting financial and asset management systems across public institutions.

Institutions under the ministry are expected to play a key role in delivering the budget’s priorities.

The TRA, in particular, is expected to collect Sh32.31 trillion from tax revenues and Sh1.79 trillion from non-tax sources. The tax authority will also continue expanding its digital systems to enhance tax compliance and reduce leakages.

The Public Procurement Regulatory Authority (PPRA) has been tasked with developing two new modules under the National e-Procurement System of Tanzania (NeST). One module will support procurement auctions while the other will offer electronic catalogues for goods and services, aimed at improving procurement efficiency and transparency.

The Capital Markets and Securities Authority (CMSA) intends to sensitise 15 million Tanzanians about capital markets and expand financial literacy. It also aims to increase the number of licensed capital market professionals by 10 percent to 993 and work with stakeholders to develop six new financial products to broaden participation.

The Bank of Tanzania (BoT), as the central bank, will continue with its mandate of maintaining macroeconomic stability. This includes keeping inflation below 5 percent, managing interest rates in line with market liquidity, maintaining foreign reserves sufficient for at least four months of imports and ensuring currency stability. The BoT will also continue promoting digital payments to reduce reliance on cash.

The government’s collective investment company, UTT-AMIS, projects that it will grow its fund assets to Sh3.51 trillion in 2025/26, up from Sh2.97 trillion in the current fiscal year. The firm expects to increase its investor base to 580,000 and post a pre-tax profit of Sh37.40 billion, up from Sh27.38 billion in 2024/25.

The Tanzania Insurance Regulatory Authority (Tira) plans to build a digital system for managing microinsurance, upgrade its information and communication technology for interoperability with other public systems and audit key players in the insurance sector.

Meanwhile, the Parliamentary Budget Committee has recommended the development of a comprehensive national tax policy. The committee’s chairman, Mr Oran Njeza, said such a policy would guide the types of taxes collected, their rates, exemptions and the application of revenues.

“Tanzania lacks an overarching tax policy despite having many tax laws,” said Mr Njeza. “It is important to have a framework that ensures consistency, fairness and predictability for both taxpayers and investors.”