Tanzania Cuts Donor Dependency, New Budget Accelerates Middle Income Journey

DAR ES SALAAM, TANZANIA

In what many Members of Parliament considers to be the historical anti-poverty and business boosting budget, Tanzania’s next financial year budget has clearly indicated that the country is in the accelerated mood towards achieving its middle income status by 2025.

Like in other East African countries, Tanzania Minister for Finance and planning Dr. Philip Mpango, on Thursday presented to the National Assembly the estimates of government Revenue and Expenditure the budget for 2019/2020 that totals sh 33.1trillion ($ 14.5m).

Implementing the Blue Print

The budget estimates took bold steps in accommodating recommendations included in the National Blueprint that seeks to improve ease of doing business in the country in a bid to boost and stimulate business in the East Africa’s fastest growing economy according to the World Economic Forum (WEF2018).

Towards that end, the budget estimates proposes to cut down over 100 taxes and levies, lowering Value Added Taxes to some commodities and levying more on exports to boost local products.

Jubilation as Donor Dependency Goes Down

MPs who will debate the budget from next Monday were initially pleased for the major tax reforms proposed by the government and the continuation of previous projects. “I like the consistency in funded the on-going projects like the standard gauge railway, the Rufiji power dam and free education scheme,” said one MP.

Furthermore, the new estimates to be endorsed next week cuts down the country’s donor dependency to 8 percent, in an unprecedented acceleration that economic analysts believe would achieve zero dependency in few years to come. Few years ago, the dependency on loans, credits and assistance stood at more than 30 percent.

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