THE 2024/2025 national budget tabled in the National Assembly on Thursday by Finance Minister Dr Mwigulu Nchemba is inclusive and innovative but rather heavily dependent on foreign sources financing strategic development projects, experts have warned.

Experts at audit services firm Ernst & Young (EY) said in a budget analysis in Dar es Salaam yesterday that the newly tabled budget was inclusive and implementable, however, warning that it was too dependent on foreign aid to finance development projects.

Fred Lugangira, a senior tax manager at the firm asserted that the budget was inclusive as the government has put in place strategic goals and innovations to widen the tax base and ease voluntary tax compliance.

“The just tabled budget is dependent on external financing," he said, airing the view that while this need cannot be avoided, caution is needed by innovating on sources of revenues as the minister has done.

Measures needed to broaden the country’s tax base include enhancing the digital economy and tapping into unexploited potential opportunities, he said.

 “The minister has already proposed that local government authorities innovate on sources of revenue, a welcome initiative as we move forward,” he said.

He considers the budget as implementable especially in relation to the digital economy where current policy since 2022 allows non -resident content creators to pay similar levels of tax like local creators.

Multinational companies are being registered by the Tanzania Revenue Authority (TRA) in various sectors, while the government has put in place strategies to access concessional loans to finance development projects, he said.

Road traffic accidents cause manpower losses and grave impairment, with a rise in fines for traffic offences, especially in case of road crash fatality is likely to reduce accidents, he stated.

Joseph Sheffu, the firm’s country managing partner, said the budget was inclusive but as it unveils an election year, expectations are high and thus its transformative role will be muted.

“The budget is more of an economy reviving from the Covid-19 pandemic where growth dropped to 4.5 percent," he asserted, seeing the target of returning to 5.4 percent this year and upwards later as realistic.

“The task of reviving the economy is a process, therefore we need to be very careful with managing public funds,’ he said, expressing confidence in the current pace of economic growth.

The budget is innovative as it has now brought digital content creators into the pool as formal sector businesses, a welcome initiative as the world is now going digital, he said.

He applauded the clean cooking energy agenda championed by President Samia Suluhu Hassan as this has made the budget lead the way in fostering economic resilience as climate change effects pose a threat to economic growth.

Dr Innocent Donald, teaching economics at the University of Dar es Salaam (UDSM), said the budget was targeted at engaging the private sector in national development.

As last financial year TRA collected 79 percent of the targeted revenue, the same trend is possible where just over a half of non-tax revenues was mobilised, at 54 per cent, he said.

“The question now is how we fill the gaps in TRA monthly domestic revenue collections as they nearly match with what we spend,” he said, noting that the private sector has not been fully engaged.

This budget is targeted at enhancing private sector involvement especially in seeking to widen the tax base, enhancing the use of digital tools in revenue collection including widening the use of electronic tax stamps (ETS), but more needs to be done, he added.