Bank of Tanzania has said in its latest Quarterly Economic Bulletin that the central government did well in collection of taxes on imports and locally made goods and services but performed poorly on collection of non-tax revenue while grants received were way low compared to last year.
“During the period taxes on imports increased to 1.46trn/- from 1.38trn/- while taxes on local goods and services increased to 876bn/- from 783bn/- registered the previous year,” the report stated. Non-tax revenue declined to 508bn/- from 699bn/- collected during a corresponding period in 2018.
Likewise, local government revenue collection from own sources increased to 189.1bn/- from 150.2bn/- during the period.
In generally, the BoT report stated that revenue collections by central government in total grossed 4.27trn/- during the year compared to 4.36trn/- collected in the corresponding period in 2018.
On expenditure, the report stated that the government spent 7.37trn/-, of which recurrent expenditure was 4.76trn/- while development expenditure was 2.61trn/- compared to 6.195trn/- in the preceding year.
The Central Bank further said total domestic credit issued by banks, which comprise credit extended to the government and private sector, grew by 17.3 percent compared to 1.5 percent registered in the previous year.
“This significant growth was on account of increased credit to both the central government and private sector,” the quarterly report added.
According to the bulletin, annual growth of credit to the private sector was 7.6 percent which was higher than 4 percent last year which reflected the impact of sustained accommodative monetary policy and on-going government efforts to improve the business environment and credit risk measures taken by banks to reduce default rate.
Interest rates charged by banks on loans and offered on deposits were relatively lower during the quarter ending. Overall savings deposit rate increased to 2.45 from 2.13 percent while overall lending rate dropped to 17.07 percent from 17.53 percent during the period.
The spread between one-year lending and deposit rates also narrowed to an average of 8 percent from 9.1 percent in June 2018, the BoT quarterly report noted.