Presenting the state of the economy for 2020/2021 and the national development plan 2021/22 in the National Assembly, Minister for Finance and Planning Dr Mwigulu Nchemba said yesterday that the government will enhance formalization of informal businesses to boost revenue collection.
The 13.3trn/- planned for development projects is equivalent to 37 per cent of the entire 2021/22 budget estimates, and out of the funds, 6,180.0trn/- will be from domestic sources, 4,190.9trn/- from domestic and external non-concessional loans and 2,955.9trn/- from grants and external concessional loans.
The development budget will finance the implementation of flagship and strategic development projects while other development projects will be financed through Public Private Partnership (PPP) as well as Special Purpose Vehicles (SPVs).
“However, implementation of the plan may be affected by both internal and external risks. Internal risks include corruption, land degradation and the unpredictability of availability of financial resources for development projects,” he said.
External risks include climate change, the global economic crisis on account of the raging Covid-19 pandemic and climate related natural disasters, he state, noting that in mitigating the risks, the government will continue to take various measures, especially fostering a more enabling business environment to reduce investment costs.
The government will strengthen project preparation by enabling private sector participation in the implementation of projects; strengthening domestic revenue mobilization by more formalization of informal sector activities in order to widen the tax base, he declared.
Measures will continue to strengthen domestic development financing institutions to facilitate access to credit; and improving the management and control of government electronic systems, he stated.
Other measures will focus on the need to continue strengthening the mobilization of tax and non-tax revenues by improving the investment and business environment. This will facilitate the development of small and medium enterprises and thus further the goal of sustainable economic growth, he said..
“We will continue to improve the environment for voluntary tax compliance including encouraging use of Information Communication Technology (ICT) systems, plus creating public awareness and the progressive formalisation of informal sector activities,” he further noted.
Strengthening the management of revenue collection shall seek to uplift enforcement of tax laws to curb tax evasion and revenue losses, he said.
“We will also continue harmonizing multiple fees and levies and implement further the Tanzania Electronic Single Window System (TeSWS) to simplify freight movement at border stations and reduce the costs of doing business,” the minister added.