Dar es Salaam — The
Budget expenditure for the last financial year was implemented by only
68.56 per cent (Sh22.265 trillion) as the wage bill and local financing
of development projects, the Bank of Tanzania's annual report for the
year ended June 2019 shows.
The government
tabled a Sh32.5 trillion expenditures plan in Parliament in June 2018,
which was approved for the 2018/19 financial year .
In the previous
year, the Budget was implemented by 64.5 percent, as the government
spent Sh20.468 trillion out of the planned Sh31.711 trillion.
Out of the Sh22,265
trillion spent in the last financial year, the BoT says in its latest
operational report for the year to June 30, 2019 that development
expenditure was Sh8.45 trillion while recurrent expenditure was Sh13.8
trillion.
"Out of the
resources spent on development projects, 76.8 percent was from domestic
sources. Government expenditure was equivalent to 16.6 percent of GDP,"
states the central bank in its report.
Budget
implementation has been a concern among lawmakers and experts who have
been calling for framing credible and realistic budgetary estimates,
instead of adopting unrealistic ambitions.
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In the financial year to 2014/15, the expenditure targets were met by 84.9 percent, equivalent to 17.3 percent of GDP.
In the following
year (2015/16), total expenditure amounted to Sh17.759 trillion, or 91.5
percent of the budgeted amount. This was equivalent to 18.8 percent of
GDP.
In 2016/17, the
expenditure was 66.5 per cent of the budget as the government had been
aligning with its priorities especially in the development expenditure.
Revenue and grants
According to the
central bank, domestic revenues collected by the government in 2018/19
amounted to Sh18.5 trillion, higher than the amount collected in the
previous financial year by 3.2 percent.
It was also estimated to be equivalent to 13.8 percent of GDP.
However, according
to the budget speech delivered in Parliament in June 2018, the
government planned to collect Sh20.15 trillion from domestic sources,
with Sh18 trillion being the targets for tax revenue to be collected by
the Tanzania Revenue Authority (TRA).
The BoT says that,
out of the total revenue, 96.4 percent was collected by the central
government and the remaining share by the local government authorities.
Tax revenue, which
accounted for 86.1 percent of the central government's collections,
amounted to Sh15.38 trillion. This was below the annual target by 13.9
percent: equivalent to 11.4 percent of GDP.
"The
underperformance in tax collections was largely associated with
challenges of taxing the informal sector, underutilisation of electronic
fiscal devices (EFDs) and smuggling activities along the coast of the
Indian Ocean," states the central bank in the report.
Non-tax revenues
amounted to Sh2.4 trillion, which was above the annual target by 8.3
percent - and was equivalent to 1.8 percent of GDP. On the other hand,
external grants amounted to Sh461.2 billion, out of which Sh285.3
billion was project grants - with Sh175.9 billion being 'basket funds.'
External grants received in FY-2018/19 were equal to 0.3 percent of GDP.
However, the government had budgeted to get Sh2.68 trillion from the grants and concessional loans.
Financing
The report also
states that the government's budget operations in FY-2018/19 realized an
overall deficit of Sh4.23 trillion, which was financed through foreign
and domestic borrowing of Sh1.19 trillion and Sh3.037 trillion.
The deficit was equivalent to 3.1 percent of GDP. This was slightly below the government target of 3.2 percent.
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