Tanzania's Budget 2025/26: This will be the first Vision 2050 budget, it must be bold

On the 27^th of June 2025, Samia Suluhu Hassan, President of the United Republic of Tanzania will address the parliament and officially dissolve it, marking the end of tenure of the current parliament. With it, she will have wrapped up the sixth phase government’s term. The political fever is already quite high, and the parliamentarians will undoubtedly have their minds focused on their constituencies. But it is important for them to take a moment to remember, that while this will be this government’s last budget, this budget will usher us into the implementation of Vision 2050.

This year’s budget is a unique budget for domestic and external reasons. The world’s economic and political architecture is rapidly shifting. Trade wars between super-powers (China and America), a clear rethink of development assistance by historically major donors, increased economic nationalism affect us. So, what must the budget do?

The budget must reinforce self-reliance

The first thing this budget must do it is emphasis self-reliance. The official CCM policy still remains Socialism and ‘Self-Reliance.’ It is beginning to sink in that the global geo-politics necessitate a more self-reliant thinking. One of the great achievements of the last year is that Tanzania is now food self-sufficient, with the potential for exports for the surplus production. This needs to extend to other critical areas such as energy, water and healthcare.

Out of the TZS 57.04 trn expected to be raised by the budget, TZS 40.97 trn is expected to be from domestic sources, with the rest coming from domestic and external debt. Only close to TZS 1 trn is expected to be raised from development partners. Edward Moringe Sokoine’s insistence on self-reliance comes to mind. Gone are the days when the country would expect to be funded by development partners in a meaningful way. Poverty reduction requires the ability to stand on our ‘own two feet’.

The budget and tax paying must be inclusive

Whilst on a number of metrics, some economic progress has been made, the dent in poverty reduction has not been impressive, with rates still above 25%. This speaks to a range of factors, including population growth, fertility and general demographics. The growth has also not been evenly distributed in terms of sectors. Agriculture is certainly a sector that needs heavy investment as its improvement inevitably leads to a direct poverty reduction in the country.

Inclusive development should also mean inclusive tax paying. According to the Commissioner General, as of the first quarter of 2025, there are 7,035,000 registered Tax Identification Numbers, just over 2,476,000 of which are active. Out of that, 800,000 are employees and only 4 million one-off taxpayers. The budget looking at Vision 2050 must seek to broaden the tax base by making tax inclusive, particularly if it can be aided by technology.

The budget must be for people, not things

The story of the last ten years has been the story of infrastructure development. Next week, the President will be inaugurating the Kigongo-Busisi Bridge in what will be a historic day for the Lake Zone. The Standard Gauge Railway has only been active for less than a year. Air Tanzania has added a cargo plane in addition to 19 passenger planes. Think of the Tanzanite Bridge, the Julius Nyerere Hydro-Electric Power Plant, in addition to power, significant investment in classrooms as well as in the water infrastructure to the point where the water production capacity (not production) exceeded the demand.

In technology-speak, the last ten years were about hardware. Vision 2050 has to be about software. Where hospitals are built, doctors and nurses need to be empowered. Where class rooms are built, teachers and curriculum need to keep up with the 21st century. And while we are on the subject of technology, 72% of all codes written last year was written by AI according to Mo Gawdat. If we are really going into Vision 2050, we need to see some tangible investment in helping our people step into the new world which will undoubtedly be driven, disrupted and shaped by technology. We will wait and see.

Samwel Ndandala is a Tax & Legal partner at Deloitte Consulting Ltd. The views presented are his own and not necessarily those of Deloitte. He can be reached at sndandala@deloitte.co.tz.