Next budget to hit 55.06tri/-

DODOMA: THE government estimates to collect and spend 55.06tril/- in the 2025/26 fiscal year, highlighting six priority areas, including funding preparations for the 2025 general elections.

Additionally, aid from development partners is estimated to be 1.02tril/-, while concessional loans are estimated to stand at 5.6tril/-, and commercial loans from both domestic and international sources at 9.4tril/-.

Presenting the budget framework proposal for the 2025/2026 fiscal year in Parliament yesterday, Minister for Finance Dr Mwigulu Nchemba said that other priority areas include infrastructure development, strengthening productive sectors and improving social services.

Other areas include environmental management and climate change, enhancing institutional systems for good governance, and promoting gender equality and empowerment of special groups.

He said that domestic revenue is projected at 38.9 tril/- compared to the 34.6tril/- that is projected for 2024/25, with this increase factoring in macroeconomic fundamentals, strategies and measures being taken by the government to enhance revenue collection.

Dr Nchemba listed these measures as promoting the use of ICT systems, controlling tax exemptions and improving the business and investment environment to unlock new revenue sources.

“The government’s aim is to ensure that domestic revenue continues to fund a significant portion of the national budget, with at least 70 per cent of the total budget.

The government will continue implementing a medium-term revenue collection strategy aimed at increasing domestic revenue and reducing reliance on loans and aid in the budget,” he said.

Regarding spending, Dr Mwigulu said that it is expected to be 55.06tril/-, of which 38.6tril/- will be for recurrent expenditures and 16.4tril/- for development.

Specific Directives

He said the framework includes various directives for accounting officers to strictly follow during the preparation, implementation, monitoring and evaluation of the budget and plan.

Dr Mwigulu said the directives include prioritising the completion of ongoing projects before initiating new ones, settling debts of ongoing or completed projects, and ensuring that all collected revenue is deposited into the government’s Consolidated Fund.

Additionally, all departments are directed to utilise the government payment system (MUSE) for transactions and to use electronic government revenue collection systems effectively by regularly verifying, reconciling and auditing these systems at all collection points to prevent revenue loss.

Other directives include implementing the 2021 Guidelines on Requests and Disbursement of Funds, which emphasise avoiding contract commitments without assured funding to prevent debt accumulation, compliance with the Public Procurement Act that limits the awarding of tenders to non-citizens to support local firms and the use of electronic public procurement systems.

Dr Mwigulu further said adherence to contract agreements with suppliers, compliance with existing laws, regulations and guidelines, including tax laws and ensuring new projects are fully prepared, such as with land compensation payments or feasibility studies will also be strictly emphasised.

“Implementing the national strategy to improve access to foreign currency, including controlling unnecessary foreign exchange use, boosting production of export goods and services, enhancing the business and investment environment to attract foreign capital and prioritising local goods and services will be stressed,” the minister said.

He further said there is a need for close monitoring of the performance of state-owned enterprises, particularly those operating commercially, with a strategy to prepare them for listing on the stock market to reduce the government’s obligation to fund and manage them. The minister also called for sectoral collaboration in implementing multi-sector projects, ensuring environmental and climate change considerations and addressing community needs in planning and implementing development projects.

Budget Execution

He noted that in the first quarter of 2024/25, the government collected 11.5tril/- from all sources, of which 7.9tril/- came from domestic revenue, equivalent to 99.4 per cent of the 7.9tril/- target. Aid and concessional loans amounted to 1.37tril/-, commercial loans from the domestic market reached 1.6tril/- , while commercial loans from external sources were 593.65bn/-.