Non-tax revenue: The road to 1.8 tri/ target

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DAR ES SALAAM: TANZANIA’S journey towards collecting 1.79tri/- in non-tax revenue (NTR) in the next financial year, 2026/27, reflects a deliberate shift in how public resources are mobilised, with the Office of the Treasury Registrar (OTR) at the centre of the effort.

The revenue drawn from public entities and government minority interest companies, continues to strengthen its role as a key pillar in financing national development.

Presenting his ministry’s 144.85bn/- budget estimates to Parliament a few weeks ago, the Minister of State in the President’s Office-Planning and Investment, Prof Kitila Mkumbo, said the projected revenue will be channelled into the Consolidated Fund to support national priorities.

The next financial year’s Non-Tax Revenue (NTR) target of 1.79tri/- represents an increase from the 1.69tri/- approved for the current financial year, 2025/26, signalling continued strengthening of domestic resource mobilisation driven by improved performance of public investments.

Against this backdrop, implementation of the ongoing financial year shows steady progress, although performance varies across reporting periods.

By March 2026, NTR had reached 773.37bn/-, up from 664.53bn/- recorded during the same period in the previous financial year, reflecting improved returns from public entities and government minority interest companies.

This upward trend signals gradual gains in collection efficiency and institutional performance across key revenue streams, underscoring the need to sustain momentum in the remaining months of the financial cycle to ensure full attainment of the annual target by June 30, 2026. Beyond the figures, the pattern points to a broader shift: NTR performance is increasingly shaped not only by the scale of public investments, but also by the efficiency, timing and discipline of collection and remittance.

This, in turn, reinforces the need for systems that ensure steady and predictable inflows throughout the year, rather than accumulation towards the end of the budget cycle. Achieving such consistency depends largely on how well underlying revenue streams are structured and managed.

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It is within this context that the 1.79tri/- projection is anchored, drawing on key revenue streams generated from public entities and government minority interest companies. These include dividends, a statutory 15 per cent contribution on gross revenues from selected entities, returns from the Tanzania Telecommunications Traffic Monitoring System (TTMS), loan repayments and interest, as well as surplus and other remittances.

A closer look at these streams shows both continuity and gradual structural shifts. Dividends remain the dominant source, projected to rise from 743.88bn/- in 2025/26 to 835.82bn/- in 2026/27, reaffirming the central role of profitable public investments in sustaining fiscal space. By contrast, the 15 per cent levy on gross revenues is projected to decline from 784.52bn/- to 723.01bn/-, reflecting variations in performance and compliance across contributing entities.

While this points to pressure in one stream, others are expected to strengthen. TTMS-related collections are projected to almost double from 5bn/- to 9.8bn/-, while loan repayments and interest are expected to rise from 37bn/- to 62.22bn/-.

Similarly, surplus and other miscellaneous income are projected to increase from 122.37bn/- to 161.38bn/-. A notable change in the coming fiscal year is the absence of privatisation proceeds, which contributed 3.5bn/- in 2025/26 but are not expected in 2026/27, marking a full phase-out of that source.

Taken together, these movements indicate a gradual shift towards more predictable and recurring revenue streams. This evolving structure is also reflected in recent performance. In the 2024/25 financial year marking a historic milestone since the establishment of the OTR in 1959 collections reached 1.028 tri/-.

That performance was largely driven by dividends from commercial public institutions and companies amounting to 603.4bn/-, representing 59 per cent of total collections. This was followed by 363.4bn/- from the 15 per cent levy on gross revenues, accounting for 35 per cent, while 61bn/- came from other miscellaneous income, contributing 6 per cent.

The composition underscores the continued dominance of returns from state-linked investments and statutory contributions in driving non-tax revenue growth.

Taken together, this performance provides a clear benchmark for the 1.79tri/- target. It demonstrates both the scale of returns already being generated and the structural reliance on dividends and statutory contributions.

More importantly, it reinforces a key policy reality: Future growth will depend less on new sources and more on improving efficiency, profitability and compliance within existing public investments. Prof Mkumbo reaffirmed the government’s commitment to continued reforms aimed at strengthening public institutions to improve efficiency, self-sustainability and contribution to the Consolidated Fund in line with Dira 2050.

He further said the government expects public institutions to increase their contribution annually through non-tax revenue, job creation, production of goods and services, and broader economic participation, with the long-term ambition of increasing contribution to the national economy from approximately 3-5 per cent to 8-10 per cent by 2050.

As Prof Mkumbo noted, “The sustainability of non-tax revenue will depend on how effectively public institutions are governed, how efficiently they operate, and how disciplined they are in remitting statutory contributions.” Adding, “Strengthening these areas is key to unlocking their full contribution to national development.” The Parliamentary Standing Committee on Administration, Constitution and Legal Affairs has also called for stronger oversight of public entities to safeguard non-tax revenue performance.

Presenting the report on behalf of the Chairperson, Ms Zena Katambo, urged the OTR to strengthen supervision of public institutions to ensure adequate contributions and support achievement of the 2026/27 target.

The committee stressed that the OTR must ensure full collection and timely remittance of revenues into the Consolidated Fund, warning that any shortfall weakens the government’s ability to deliver essential services.

“We urge the Office of the Treasury Registrar to intensify supervision and enforcement to ensure full compliance in the collection and remittance of non-tax revenue, as any inefficiency directly affects the government’s ability to deliver public services,” the committee stated.

In his broader reflections, Treasury Registrar Nehemiah Mchechu said that despite progress, significant room remains to improve efficiency and institutional performance. Mr Mchechu stressed the need to expand the number of contributing entities, reduce reliance on subsidies and restructure loss-making institutions to strengthen revenue generation.

The OTR, which he heads, oversees 308 public entities and government minority interest companies with a combined public investment of 92.3 tri/-. According to Mr Mchechu, achieving sustained growth in non-tax revenue will depend largely on how effectively these institutions perform, particularly through dividends, which remain the largest contributor to collections.

“Delivering on the revenue target will require leadership that goes beyond traditional oversight. Boards and executives need to embrace foresight, agility and innovation in managing institutions operating under rapid economic and technological change,” he stressed.

He linked this approach to national ambitions under DIRA 2050, noting that future competitiveness and the ability to sustain non-tax revenue growth will depend on the quality of governance and institutional adaptability. Governance reforms, including competitive recruitment of chief executives and board members, are expected to strengthen leadership quality and institutional accountability.

Alongside this, investment in ICT systems and institutional capacity continues to enhance real-time monitoring, improve reporting accuracy and reduce leakages, making technology a central driver of accountability and revenue assurance.

Taken together, these developments reflect a broader transformation in non-tax revenue management, where public entities and minority interest companies are increasingly viewed as strategic financial assets.

Ultimately, the road to 1.79tri/- will depend on sustained reforms, stronger compliance and improved institutional performance. While progress is evident, achieving the target will require discipline across all revenue streams and continued strengthening of systems that support collection, oversight and accountability.