Dar es Salaam. When Tanzanians went to the polls on October 29, the immediate aftermath was marked by unrest that brought normal economic activity in parts of the country to a near standstill.
Businesses shut their doors, transport slowed and many citizens remained indoors for almost a week amid uncertainty and security concerns.
For economists and policymakers, the expectation was straightforward: tax collections would fall, undermining the implementation of both recurrent and development spending outlined in the Sh56.5 trillion Budget approved by Parliament in June 2025.
Historically, such disruptions have translated into weaker consumption, delayed payments and subdued business activity, all of which tend to dent government revenue. This time, however, the outcome defied conventional expectations.
Despite the post-election disruption, the Tanzania Revenue Authority (TRA) posted a historic performance in December, collecting Sh4.13 trillion against a target of Sh4.01 trillion. It was the highest monthly collections in the country’s history and a strong signal that the economy had absorbed the political shock better than anticipated.
Difficult operating environment
Speaking to journalists in Dar es Salaam on January 1, TRA Commissioner General Yusuph Mwenda said the performance was particularly noteworthy given the difficult operating environment.
“The period after the election was not easy......However, the economy demonstrated resilience and taxpayers continued to meet their obligations,” he said.
Between October and December 2025, the tax authority collected Sh9.8 trillion, surpassing its target of Sh9.66 trillion. This was a 12.26 percent increase from the Sh8.73 trillion collected during the same period in the previous financial year.
Mr Mwenda noted that the strong outcome was especially striking given that part of the quarter was characterised by uncertainty, reduced commercial activity and limited mobility in some urban centres.
“The fact that we were able to exceed our targets under such conditions shows the depth of resilience in our revenue systems and the broader economy,” he said.
He attributed the performance to sustained economic activity ahead of the elections, improved taxpayer compliance and reforms implemented under the leadership of President Samia Suluhu Hassan, which have strengthened institutional capacity.
“Even when there were disruptions, the structures that support revenue collection remained functional. Systems continued to operate, businesses adjusted and taxpayers honoured their obligations,” he added.
Between July and December, average monthly collections stood at Sh3.13 trillion, compared with Sh2.75 trillion over the same period a year earlier.
For analysts, this trend suggests that Tanzania’s economy has developed greater shock-absorption capacity.
The Executive Director of the research body Repoa, Dr Donald Mmari, said the post-election performance indicated that revenue mobilisation has become less vulnerable to short-term political disruptions.
“In the past, events of this nature would have caused a significant dip in collections. This time the impact was limited, which tells us that institutional capacity has improved and that the economy is more resilient,” he said.
Dr Mmari attributed the outcome to sustained reforms in tax administration, digitalisation and stronger engagement with the private sector, which have helped maintain confidence during periods of uncertainty.
From an academic perspective, Dr Dorence Kalemile, a lecturer at the Institute of Accountancy Arusha, said that while unrest temporarily affected mobility and trade, the broader economic base remained intact.
“People stayed indoors and businesses slowed, but the system did not collapse. The fact that collections still grew shows that economic activity has become more diversified and less dependent on daily physical transactions alone,” she said.
She added that increased use of electronic systems—including digital payments and electronic fiscal devices—helped cushion the impact of reduced physical movement.
Similarly, Dr Isack Safari of St Augustine University of Tanzania said the post-election experience revealed the growing maturity of the country’s fiscal framework.
“Resilience is tested during moments of stress. The fact that revenue performance remained strong despite unrest indicates that the economy is no longer as fragile as it once was,” he said.
According to Dr Safari, maintaining stable revenue flows during a politically sensitive period sends a positive signal to investors that Tanzania can withstand shocks without derailing its development trajectory.
Growing trust
Another economist, Mr Samson Rutashobya from the University of Iringa, said the episode also demonstrated growing trust between taxpayers and the state.
“When people continue to pay taxes even when conditions are difficult, it shows confidence in public institutions and in the direction the country is taking,” he said.
He added that improved engagement between the revenue authority and taxpayers, alongside better dispute-resolution mechanisms, has reduced resistance and encouraged compliance.
For the current fiscal year, the Sh56.5 trillion budget requires the TRA to collect Sh36.06 trillion in taxes. If achieved, this would raise the tax-to-GDP ratio to more than 14.1 per cent, up from 13.7 per cent in 2024/25.
Mr Mwenda said the authority remains optimistic that the target is attainable, provided economic stability is maintained.
“The lessons from the post-election period are clear. Even under pressure, our systems can deliver. The focus now is to sustain this momentum and ensure that revenue growth continues to support national development,” he said.
Beyond revenue figures, broader macroeconomic indicators also point to resilience despite the election-related disruption.
With a diversified economic base, Bank of Tanzania (BoT) figures show that exports of goods and services rose to $17.05 billion in the year ending October 2025, up from $15.13 billion in the corresponding period in 2024.
In its November 2025 Monthly Economic Review, the BoT reported that exports of goods alone reached $10.14 billion, compared with $8.46 billion a year earlier. The increase was driven by higher exports of gold, manufactured goods, tobacco, cashew nuts and coffee.
Gold exports surged by 38.9 per cent to $4.6 billion during the year ending October 2025, largely due to higher global prices. Traditional exports rose by 25.2 per cent to $1.44 billion, supported by strong performance in tobacco and cashew nuts.
Tanzania also earned $312.5 million from cereal exports—mainly maize and rice—up from $221.6 million in the previous year, reflecting increased demand from neighbouring countries.
The services sector continued to perform strongly, with receipts rising to $6.91 billion in the year ending October 2025 from $6.67 billion previously. This was largely driven by tourism and transport.
Tourist arrivals increased by 11.4 per cent to 2.32 million, while transport earnings—primarily freight—rose to $2.47 billion from $2.26 billion.
Inflation trends have also been supportive. Annual food inflation eased to 6.4 percent in October 2025 from 8.2 per cent a year earlier, helped by adequate domestic food supplies and favourable exchange rates that supported imports. Non-food inflation declined sharply to one per cent from 4.1 per cent, largely reflecting lower petroleum prices.
At the same time, Tanzania’s shift towards a less-cash economy has gathered pace. Data from the Tanzania Communications Regulatory Authority show that mobile money transactions reached nearly 599 million by September 2025, up from about 500 million in July, underscoring the growing role of digital payments in economic activity.
Sustaining the gains
While the latest revenue figures highlight Tanzania’s growing economic resilience, economists caution that sustaining the momentum will require policy consistency, institutional discipline and continued engagement with taxpayers.
Dr Mmari said maintaining stability in policy and governance will be critical to ensuring that strong revenue performance extends beyond exceptional months such as December.
“Resilience is not automatic; it must be protected. The government must continue providing a predictable policy environment. Any sudden policy reversals can quickly erode the confidence that has been built,” he said.
Dr Kalemile stressed that continued expansion of digital systems would be essential to sustaining gains in revenue mobilisation, while cautioning against overburdening small and medium-sized enterprises.
“The tax system must keep pace with a digital economy, but enforcement should be balanced to avoid undermining growth,” she said.
Dr Safari emphasised that long-term resilience depends on strong institutions rather than short-term administrative pressure.
“The strength we are seeing comes from systems, not individuals. Investment in professionalism, training and ethical standards within revenue-collecting agencies is crucial,” he said.
Mr Rutashobya added that open dialogue with taxpayers remains key. “The lesson from the post-election period is that engagement works better than coercion. Expanding the tax base, rather than squeezing existing taxpayers, will support steady and sustainable revenue growth,” he said.
As Tanzania moves forward, the post-election revenue surge offers a rare moment of reassurance: even under political strain, the economy has shown an ability to hold firm—and, in some areas, to grow.
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