In Summary

This will be the third revenue and expenditure plan of President John Magufuli’s government, which has anchored its development vision on industrialisation.

Today is Budget Day and almost everyone’s ears and eyes will be on Finance minister Philip Mpango as he tables the government’s Budget for the 2018/19 financial year.

This will be the third revenue and expenditure plan of President John Magufuli’s government, which has anchored its development vision on industrialisation.

Individuals, companies and institutions will be keen to follow what the minister will put on the table in Parliament in Dodoma in terms of taxes and other fiscal measures. A majority will be hoping for a relief budget, surprises notwithstanding.

Dr Mpango would be aware that an anxious public is likely to read between the lines at this time when the government is halfway through its first term in office.

While the budget document contains many issues, suffice it to say that the public expects the finance minister to spell out prospects, especially on economic growth and prosperity for all.

For starters, this budget, as should the last two, must carry the spirit of the industrialisation vision. There has been growing concern that the government has not acted swiftly to correlate this vision with its own tax and policy plans.

Allocations to key sectors that are critical in unlocking Tanzania’s industrialisation potential have been wanting, while tax measures have been either overly ambitious or too skewed to effectively deliver on the government’s promises.

Dr Mpango must therefore map out government expenditure priorities that carry the spirit of industrialisation growth. The plan ought to seek a way out of the revenue collection and expenditure mismatch.

Development expenditure

For instance, the Controller and Auditor General (CAG) revealed recently that although the government garnered 94 per cent of the targeted revenue collections, it nonetheless disbursed only 51 per cent of the Sh11.8 trillion budgeted for development expenditure in 2016/17. Some votes actually did not get any development funds. Currently, development expenditure accounts for about 37 per cent of the total government budget, a significant drop from last year.

It is worrying that despite this drop, disbursement of development funding complicates the matter, and still remains a big challenge. For instance, MPs recently complained that the Ministry of Livestock and Fisheries had not received its development allocation for two consecutive years despite the fact that the funds were approved by Parliament.

Dr Mpango is duty bound to show why it has been difficult to release development funds while the government claims to have surpassed its revenue collection targets.

Today’s budget should also inspire confidence in the economy. At the moment, the business community seems to be frustrated and some businesses have been closed due to huge tax bills or a hostile trading environment.

Some investors remain uncertain about their future, blaming what they perceive as increasingly unpredictable policies. This is not healthy for the economy, and Dr Mpango will be expected to offer at least some relief and hope.

Through the budget process, we believe the government has the capacity to inspire confidence and stimulate all the productive sectors of the economy going forward.