DAR ES SALAAM: TAXES collected on imported goods contributed more than one-third of government tax revenue between October and April, highlighting the growing importance of border collections in financing public expenditure.
According to the Bank of Tanzania’s latest Government Budgetary Operations report, taxes on imports generated 7.21tri/- during the seven-month period, representing about 35.7 per cent of the 20.19tri/- collected in total tax revenue. Overall government revenue, including non-tax receipts, amounted to 23.40tri/-.
The figures point to the continued importance of imports including fuel, machinery, industrial raw materials and consumer goods as a source of government revenue, even as authorities pursue measures to broaden the domestic tax base and improve tax compliance. Monthly collections from import taxes remained resilient throughout the period, rising from 984.8bn/- in October to 1.09tri/- in March before easing slightly to 1.06tri/- in April.
The increase was supported largely by value-added tax (VAT) on imported goods, which climbed to 476.5bn/- in April from 405.7bn/- in October.
Revenue from sales tax and excise duty on local goods also improved over the period, reaching 585.4bn/- in April compared with 549.2bn/- in October. Income tax remained the single largest source of domestic tax revenue, contributing 6.60tri/- between October and April.
ALSO READ: When farmers reap big harvests without toxic chemicals
Collections, however, fluctuated from month to month, dropping to 762.1bn/- in February before rebounding to 1.55tri/- in March. Revenue from other inland taxes totalled 1.55tri/- over the review period, while non-tax revenue, including collections by local government authorities, reached 3.21tri/-, reflecting the government’s continued efforts to diversify revenue sources beyond taxation.
The revenue performance comes as the government intensifies reforms aimed at strengthening tax administration through digital systems, expanding the tax base and formalising businesses to support sustainable domestic revenue mobilisation.
While border taxes remain one of the government’s most reliable revenue streams, economists have long argued that sustained growth in inland tax collections will be critical to reducing dependence on imports and ensuring revenue growth keeps pace with the expansion of the domestic economy.