TR urges reforms ahead of Dividend Day

DODOMA: AS Tanzania prepares to mark the Dividend Day or fondly called Gawio Day on June 6, 2025, at the State House in Chamwino, Dodoma, the spotlight is turning sharply toward the financial discipline of public institutions.

The event to be presided over by President Samia Suluhu Hassan will see public entities and minority interest companies formally remit their dividends and other nontax revenues to the Government Consolidated Fund.

More than a symbolic gesture, the Dividend Day reflects the government’s broader push for accountability, performance, and fiscal responsibility within the public sector.

This renewed emphasis comes amid growing concern over the erratic financial behavior of many public institutions. For years, the pattern of contributions from these entities has been inconsistent — both in terms of the number of institutions participating and the amounts remitted.

It’s a trend the Office of the Treasury Registrar (OTR), under the leadership of Mr Nehemiah Mchechu, is now working decisively to reverse.

A closer look at the data reveals the scale of the challenge In the 2019/20 fiscal year, 228 public institutions remitted 695.7bn/-to the Government Consolidated Fund through the OTR.

The following year saw a notable decline: only 202 institutions contributed, and the total dropped to 478.43bn/-.

In 2021/22, the number of contributors fell further to 134, although the total amount rebounded to 645.91bn/-.

Interestingly, in 2022/23, only 109 institutions contributed, the lowest participation rate in five years, yet contributions reached a record 777.34bn/-.

Most recently, in 2023/24, participation rose to 194 institutions, but the total amount fell sharply to 566.12bn/-.

This level of inconsistency has raised alarm across government circles.

On average, according to the OTR, only 59 percent of public institutions have contributed in the past three fiscal years.

That means nearly half of the institutions expected to remit their financial obligations — whether through dividends, statutory deductions, or other forms of nontax revenue — are either non-compliant or hampered by inefficiency and outdated governance structures.

Appointed in 2023, Mr Mchechu has made it clear that the current trajectory is unsustainable. He is spearheading a broad reform agenda aimed at bringing predictability, transparency, and accountability to how public institutions fulfill their financial responsibilities.

Central to this effort are three pillars: improving institutional performance monitoring, enforcing stricter compliance, and digitizing financial reporting systems to curb leakages and delays.

At the core of the OTR’s mandate is the management and oversight of a vast ecosystem of public entities — 308 in total.

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Of these, 252 are fully owned by the government, while 56 are companies in which the government holds minority shares.

Each institution, whether commercially or service-oriented, is expected to contribute to the national budget – not through taxes, but through non-tax revenue streams.

This is where the OTR functions as both an inv collector, ensuring the government receives its fair share from its own enterprises.

These contributions fall into three main categories, each governed by its own legal framework.

The first is dividends — paid by profit-making institutions as required under the Companies Act and the Public Corporations Act.

These returns reflect financial performance and serve as a benchmark for institutional management.

The second stream covers non-commercial or servicebased institutions that may not generate profits but are still required to support the national budget.

Under Section 12(3) of the Public Finance Act, these institutions must remit 15 percent of their gross income to the government.

This ensures that every institution contributes in some measure, regardless of profitability.

The third stream includes a broader mix of miscellaneous revenues. These cover surplus income, where 70 percent of any remaining balance after operational costs must be returned to the government — along with repayments on government loans, interest from on-lending arrangements, and proceeds from the Telecommunication Traffic Monitoring System (TTMS), which monetizes international phone traffic under regulations introduced in 2021.

These mechanisms are designed to ensure a more reliable and structured flow of non-tax revenue into the national treasury. However, their effectiveness ultimately depends on how consistently and responsibly public institutions fulfill their obligations.

It is within this context that the Dividend Day takes on deeper significance for Mr Mchechu. To him, it is more than a ceremonial occasion, it is a call to action.

“We are not just interested in numbers — we want sustainable contributions that reflect improved performance and good governance in public institutions,” he has stated in recent engagements. In his view, regularity, not randomness, should define how public entities contribute to national development.

To that end, the OTR is intensifying its own oversight efforts, strengthening institutional audits to identify and support non-compliant entities.

But enforcement alone is not enough Mr Mchechu is advocating for a deeper cultural shift — encouraging institutions to view contributions not as a burden, but as a reflection of their impact, legitimacy, and efficiency.

Analysts see this moment as a potential turning point. With a strategic vision, stronger performance metrics, and a results-oriented approach, the OTR may be well positioned to instill longoverdue fiscal discipline in the public sector.

Whether that ambition materializes will depend not only on policy and leadership but also on political will and institutional cooperation.

What’s clear is that the days of unpredictable and unaccountable contributions to the Government Consolidated Fund are being seriously challenged.

And at the forefront of that change stands a Treasury Registrar determined to change the narrative, beginning with the Dividend Day. Prepared by the Office of Treasury Registrar