Achieving a five-fold increase in total government revenue, from TZS 38.4 trillion to over TZS 192 trillion, is an extremely ambitious goal that requires not just tax policy adjustments but a fundamental, sustained economic transformation and significant governance reform.
The strategy must focus on three primary drivers: Accelerated Economic Growth, Radical Tax and Non-Tax Base Expansion, and Maximizing Returns from State Assets.
1. 🚀 Exponential Economic Growth (The Foundation)
The only way to sustainably multiply revenue by five times is by achieving a massive and sustained increase in the country's Gross Domestic Product (GDP). Tax revenue is directly proportional to the size of the formal economy.
* Targeted Investment: Prioritize high-multiplier infrastructure (energy, digital backbone, transport networks) to drastically reduce the cost of doing business and enable rapid private sector expansion.
* Industrialization and Value Addition: Shift the economic structure away from raw material export to manufacturing and value-added processing (e.g., in agriculture, mining). This increases corporate profits, employment, and income, expanding the tax base dramatically.
* Financial Sector Development: Implement policies to deepen and broaden the financial system. Financial development is proven to significantly increase tax revenue mobilization by bringing transactions into formal, traceable channels.
2. 🏛️ Radical Revenue Base Expansion and Compliance
This involves both improving the collection of existing revenue types and creating new ones.
A. Taxes (Current Share: ~51%)
The TZS 19.6 trillion tax base must be significantly broadened through enforcement and formalization.
* Formalize the Informal Sector: Introduce a simple, low-rate, and technologically administered Presumptive Tax that is mandatory for Small and Medium Enterprises (SMEs) not yet in the VAT system. This brings millions of transactions and businesses into the tax net for the first time.
* Leverage Technology for Compliance:
* Mandate and strictly enforce the use of Electronic Fiscal Devices (EFDs) for all consumption-related taxes (VAT on Goods and Services).
* Integrate the tax authority's systems with other government databases (land registry, customs, vehicle registry, banking) to use Big Data Analytics to detect under-reporting and non-filers in real-time.
* Combat Evasion and Avoidance: Launch a highly-funded, specialized unit to aggressively audit and prosecute complex tax crimes, particularly in large corporate transfers and international trade.
B. Levies, Fees, Fines, Penalties and Forfeits (Current Share: ~6%)
This non-tax revenue stream must be optimized and expanded.
* Modernize Property Rates: Introduce comprehensive, digitized land and property mapping (Rates and Fees) to ensure all taxable properties are assessed at current market values, and implement efficient, automated collection systems.
* Enforce Fines/Penalties: Drastically improve the collection rate for environmental, traffic, and regulatory fines through automated systems and stricter enforcement to deter non-compliance.
* Introduce New Regulatory Fees: Create fees for high-demand, environmentally sensitive, or luxury activities (e.g., carbon emission fees, higher license fees for highly-polluting industries).
C. Social Contribution (Current Share: ~9%)
This depends heavily on formal employment expansion.
* Massive Job Formalization: As the economy grows and the informal sector formalizes (Strategy 1 & 2A), the number of employees making social contributions will surge. This is the main lever.
* Broaden the Contribution Base: Review social security law to include contributions from high-income self-employed professionals or mandate contributions from certain categories of independent contractors in the gig economy.
3. 💰 Maximizing Returns from State Assets
A. Revenue from Exchange Transactions & Fair Value Gains (Current Share: ~31%)
This is a critical area for multiplying non-tax revenue.
* Optimize State-Owned Enterprises (SOEs): Implement rigorous performance contracts and corporate governance reforms for all SOEs (Utilities, Ports, Energy, etc.) to ensure they operate profitably. Target significantly higher dividend transfers to the government.
* Asset Monetization and Commercialization: Identify high-value, non-strategic government assets and monetize them through Public-Private Partnerships (PPPs) or commercial leases, generating long-term revenue streams (e.g., commercializing government land, developing toll roads, selling power generation to private firms).
* Financial Asset Management: Actively manage the government's investment portfolio to maximize Fair Value Gains and interest receipts from loans/deposits.
Conclusion
The path to a five-fold revenue increase is a virtuous cycle: Massive Investment \rightarrow Accelerated GDP Growth \rightarrow Formalization of the Economy \rightarrow Broader Tax and Non-Tax Base \rightarrow Exponential Revenue Growth. No single tax hike can achieve this; it requires synchronized, decade-long structural reform.
Would you like me to focus on a specific revenue type, such as Taxes on Goods and Services, and detail the policy steps required for a five-fold increase in that category?