Following the ongoing improvement of quantity and quality of social services, and the
productive sectors in general, spending needs of Tanzania are growing rapidly and more than the
foreign resources can actually meet. Therefore, it is important that the country seeks the ways to
mobilizing more domestic financial resources.
Although revenue collection as a percentage of GDP has recently increased, from 11.8% in
2004/05 to 17.9% in 2008/09, it is still not enough and ought to grow much faster. Domestic
revenue is expected to contribute 56% to the total revenue in 2009/10, while 33% will be coming
as foreign grants and loans. To increase the relative share of domestic revenue in the total
spending and also as a percentage of GDP, boosting domestic revenue has to be a part and parcel
of the MKUKUTA II‘s strategic objective for the next 5 years. This is a matter of concern as we
know that the major sources of revenue have remained the same for quite a number of years.