[{"bbox": [96, 152, 1135, 313], "category": "Text", "text": "reduce access to grants and concessional loans. Tanzania has considerable untapped revenue potential from tax revenues, non-tax revenues and alternative financing. The tax to GDP ratio is low at 11.4% (FY2020/21) and the tax gap is estimated at 6 to 7%, one of the largest in the region. During the implementation of the FYDP II (2015/16-2020/21), tax revenues increased by 56% in nominal terms. Revenues are recovering after revenue shortfalls in both Tanzania mainland and Zanzibar in 2020/21. Tax revenue outturns for the first 7 months of 2021/22 are high at 97% of targets for Tanzania mainland and 83% for Zanzibar."}, {"bbox": [96, 324, 1124, 375], "category": "Text", "text": "In conclusion, the authorities are pursuing a stability-oriented macroeconomic policy and the eligibility criterion is met."}, {"bbox": [85, 390, 438, 418], "category": "Section-header", "text": "### 2.3.4 Public Financial Management"}, {"bbox": [96, 432, 1135, 594], "category": "Text", "text": "The Government of Tanzania (GoT) has made progress in strengthening its Public Financial Management (PFM) systems since the latest PEFA in 2017, for Mainland. The 2017 PEFA concluded that Tanzania's PFM System improved in 9 out of 28 performance indicators and regressed in 10 out of 28. The PFM system is strong in the following areas: reporting on extra-budgetary operations, fiscal risk reporting, public asset management, debt management, budget preparation, legislative scrutiny of budgets, accounting for revenue, payroll controls and legislative scrutiny of audit reports. Procurement management, internal and external audit are emerging strengths."}, {"bbox": [96, 603, 1135, 738], "category": "Text", "text": "The latest official 2017 PEFA results identify budget credibility as a weakness, with large discrepancies between budgets and actual expenditures. Other weaknesses were public investment management, comprehensiveness of budget documentation, fiscal strategy, expenditure arrears, public access to fiscal information, medium term expenditure framework, in-year controls on non-salary expenditures, in-year budget reports and predictability of in-year resource allocation."}, {"bbox": [96, 749, 1135, 936], "category": "Text", "text": "Since 2017, cash management has improved following the adoption of a Treasury Single Account, compliance with public procurement regulations improved as a result of the e-procurement system, GoT made progress in arrears clearance, internal availability of budget information improved due to the Central Budget Management System. The Government is also more compliant with the International Public Sector Accounting Standards accounting standards as the 2019/20 financial statements received an unqualified opinion, has accelerated the integration of IT systems through an “Enterprise Service Bus” and deployed an audit recommendation tracking information system to enhance the implementation of audit recommendations."}, {"bbox": [96, 947, 1135, 1135], "category": "Text", "text": "Revenue and expenditure targets have shown more realism. Marginal real term annual increases, translated in improved budget credibility prior to COVID-19. The pandemic eroded progress in 2019/20, but for the ongoing fiscal year, tax revenue outturn is exceptionally high reaching 97% of its target for the first three quarters. On the expenditure side, execution of the development budget equally reached 96% in FY2020/21. This seems to be driven by IMF emergency financing for Tanzania's COVID-19 response. Overall, budget credibility is an important precondition for more advanced PFM reforms and remains important to monitor throughout the budget support, as well as predictability of in year resource allocations, commitment controls and arrears."}, {"bbox": [96, 1145, 1135, 1333], "category": "Text", "text": "The PFM reform programme in Tanzania (PFMRP) is both credible and relevant. The programme's strategic objectives are formulated to address the weaknesses identified in the PEFA assessment. PFMRP has a comprehensive action plan that identifies tasks, timeframes, resources and responsibilities. The action plan is coherent with Tanzania Development Vision 2025 and Five Year Development Plans. The PFMRP has been adequately financed by GoT and Development Partners and is implemented, with oversight from stakeholders such as the Development Partners PFM Group and the PFMRP Secretariat. A results-oriented Monitoring and Evaluation Framework is in place."}, {"bbox": [96, 1344, 1135, 1557], "category": "Text", "text": "Tanzania joined the EITI as part of the government's wider reform efforts to make the extractive sector more competitive and maximise the benefits from mining. Tanzania has been using the EITI process to produce data on local content, the East Africa Crude Oil Pipeline and the contribution of artisanal and small-scale mining to mining revenues and local content. The latest report covering 2018-2019 was published in June 2021. Tanzania is also a member of the Financial Action Task Force (FATF). According to the latest FATF Mutual Evaluation Report June 2021, measuring effectiveness and technical compliance rating, Tanzania was compliant for 3 and Largely Compliant for 11 of the FATF 40 Recommendations. In terms of level of effectiveness rating, Tanzania had 2 moderate and 8 low, with none of the variables rated high."}, {"bbox": [96, 1568, 1135, 1623], "category": "Text", "text": "Tanzania does not have a separate policy for domestic revenue mobilisation or tax revenues beyond the chapter on policy financing in the FYDP III. Tax policy changes are introduced annually through the Finance Bill. The"}, {"bbox": [1027, 1680, 1145, 1706], "category": "Page-footer", "text": "Page 12 of 36"}]