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UNITED REPUBLIC OF TANZANIA
MINISTRY OF FINANCE
HON. MUSTAFA HAIDI MKULO (MP) MINISTER FOR FINANNCE DISPLYING THE GOVERNMENT BUDGET FOR 2011/2012
GOVERNMENT BUDGET FOR FINANCIAL YEAR
2011/2012
CITIZENS’ BUDGET EDITION
Issued by Ministry of Finance in collaboration with Policy Forum
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1.
The Citizen’s Budget
A citizens’ budget is a simplified digest of the national budget produced in a format that
makes it easy for the ordinary citizen to understand the main features of what the
government has planned for the financial year. This citizens’ budget aims at making
budgetary information in the country more understandable, accessible, interesting and
relevant to ordinary citizens. It also gives them the opportunity to be more involved and
informed about the government’s planning, and budget execution process. It mentions in
brief where the government is going to get its money and how it has arranged to spend
it.
The financial year 2011/2012 is the first year of implementing Government’s Five Year
Development Plan which comprises the following pillars:
• Sustaining macroeconomic stability and maintaining the successes achieved in the
provision of social services,
• Using available resources as catalyst for inclusive economic growth,
• Exploiting Tanzania’s geographical advantages, and
• Increased use of ICT.
In view of the above, the 2011/2012 budget seeks to address, among others, the following
challenges:
• Increasing domestic revenue collection through increased Government investments in
economic stimulants as well as broadening the tax base.
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2.
The high cost of living and high unemployment levels among our youth caused by
increase in prices of goods and services and low job creation, and
What the government wants to achieve in 2011/2012
In general, the budget sets out measures to reduce cost of living on the citizens and
stimulate economic growth by implementing the following:A. Enhancing the quality of health care and education services in the country through:
• Consolidating gains and achievements made in the health and education sectors
and improving access and the quality of services delivered in these sectors.
B. Improving agricultural productivity and irrigation schemes through:
• Promoting private sector investment in the agricultural sector,
• Strengthening Research and Development for agricultural production and
mechanisation technologies,
• Upgrading the current national food reserve infrastructure and establishing new
facilities in strategic locations,
• Constructing strategic water storage facilities (small, medium and large scale
dams), irrigation and drainage infrastructure for 33 schemes,
• Rehabilitating existing traditional irrigation schemes, and
• Developing and strengthening cooperative societies.
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C. Improving transport and transportation infrastructure (roads, railways, ports, airport
airports,
s,
a national optic fibre) through:
• Construction of ongoing road and bridge project,
• Rehabilitating railways such as the TAZARA line and the central line;
• Rehabilitating and expanding airports and improve air transportation ;
• Restructuring and improving Air Tanzania Corporation Limited (ATCL);
• Rehabilitating and expanding ports including improvement of the Dar es Salaam
channel, commence construction of a freight station at Kisarawe, constructing the
Mbegani Port at Bagamoyo, developing a deep berth at Tanga port and
upgrading Mtwara Port;
• Continue implementing the Dar es Salaam decongestion plan.
D. Stabilizing power supply throughout the country through:
• Completing construction of the 100 Megawatt and 60 Megawatt power plants in
Dar es Salaam and Mwanza respectively, and
• Enabling TANESCO to purchase of power generation equipment, support joint
ventures with investors in power generating plants such as the 300 megawatt
plant in Mtwara, the 400 kilovolt power transmission line for the MorogoroTanga-Kilimanjaro-Arusha, and expansion of the North West grid for Kagera,
Kigoma and Rukwa Regions.
E. Improving water supply through :
• Rehabilitating water supply systems to reduce leakages and water loss,
• Constructing new water supply systems and distribution networks, and
• Constructing Kidunda Dam to improve Dar es Salaam City water supply.
F. Improving other government functions such as:
• Strengthening good governance and accountability, and
• Maintaining peace, order and security of peoples’ lives and property.
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Sectoral allocations as a percentage of the total Budget.
In line with the above, the priorities of the 2010/2011 Budget are: availability of
electricity; water; transport and transportation infrastructure; agriculture and irrigations;
and job creation in the private and public sectors.
3.
The sources of revenues
The total amount planned for financial year 2011/12 is 13,526 billion Tanzania shillings or
approximately 13.5 trillion shillings (Shs.). The Government plans to raise this amount
through domestic revenue (tax and non-tax revenues), domestic loans (Funds sourced
internally) as well as external grants and loans from Development Partners (Funds
sourced externally). The figure below depicts contributions from the sources mentioned
above.
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Where is Money coming from and How Much?
Non-tax Revenue Sh. 547.1
billion
Tax Revenue Sh 6,228.8 billion
Funds sourced internally
Sh. 8,330.7 billion
Local Government Authorities’
Own Source Revenue Sh. 350.5
billion
Domestic Borrowing Sh. 1,204.3
billion
Total Amount
to be collected
Sh. 13,526.0
Billion
General Budget Support
Tsh 869.4 billion
Funds sourced externally
Sh. 5,195.3 billion
Loans and Grants Sh. 3,054.1
billion
Non-Concessional Borrowing
Sh.1,271.8 billion
4.
How the money is planned to be spent
Expenditure of the national budget is divided as follows:
a)
Recurrent expenditure which is the total amount of money the government
spends on its recurrent operations. The expenditure includes salaries expenses
for civil servants, interest payments on loans government has taken out, rent
and fuel costs and the like.
b)
Development expenditure which is money that is to be used to finance
development projects such as building schools, hospitals and roads which will
result in improved service delivery to the ordinary Tanzanian. This
expenditure is closely linked to observable changes in quality of life.
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The figure below depicts government expenditure on the sources mentioned above.
How is the Government planning to spend the money collected?
To pay national debts
Shs. 1,910.4 billion
Recurrent Expenditure: Shs.
8,600.0 billion
Money for
government
operations
Wages and Salaries
Shs. 3,270.3 billion
Other Charges: Purchase of
goods and services Shs. 3,419.6
billion
Budget Allocation Shs.
13,526.0 billion
Development Expenditure
Shs.4,926.0 billion
Money to finance development
projects such as building
schools, hospitals and roads
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Development and Recurrent Expenditure As Percentage of the Total Budget.
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5.
Policy changes in facilitation of the 2011/2012 budget
With a view to strengthening revenue collection while improving the standard of living,
the Government proposes the following changes:
Changes aimed at fostering KILIMO kwanza
Changes in the Value Added Tax Act, CAP 148:
• Exempt VAT on spare parts for threshers, rice dryers and mills, planters, trailers,
power tillers, NASCOR Pellet Feed used for poultry, raw materials used for making
fishing nets (nylon fishing twines), spare parts for sprayers, harrows and grain
conveyors.
Changes in the Income Tax Act, CAP 332:
• Abolish withholding tax on fish transport for foreign destined freight to promote fish
exports and increase foreign exchange earning from the sector.
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Changes aimed at Fostering Education and Job creation
The Vocational Education and Training Act, CAP 82
• Change the allocation of revenue collected from Skills Development Levy of 6 percent
so that 4 percent is allocated to the Higher Education Students’ Loans Board, and 2
percent to the Vocational Education and Training Authority – “VETA” to ensure
availability of resources for the provision of Loans to higher education students.
Other facilitating changes
Changes in the Excise (Management and Tariff) Act, 147
• Reduce Excise Duty on HFO from 80 shillings to 40 shillings per litre to reduce the
cost of production and promote industrial growth;
• Replace the 120 percent Excise Duty imposed on plastic bags of more than 30 microns
of Polymers with 50 percent; and
• Adjust the specific excise duty rates on non petroleum products by 10 percent.
The Stamp Duty Act, CAP 189
• Exempt Stamp Duty on the transfer of the ownership of assets to the Special Purpose
Vehicles (SPV) for the purpose of issuing asset-backed securities.
The Road
Road and Fuels Tolls Act, CAP 220
• Exempt fuel levy charged on fuel for vessels, rigs and other equipments used in oil and
gas exploration.
• Introduction of a special account by the Tanzania Revenue Authority (TRA) where
mining companies will be required to draw their estimated annual petroleum
consumption plans and deposit money on the account equal to estimated taxes on
petroleum products consumed in a given month.
The Business Licensing Act, CAP 208
• For Town Authorities (Cities, Municipals and Towns) to impose 50,000 shillings
annually for any business (except hard drinks) undertaken in the area;
• For District Councils to impose and collect business licence fees of 30,000 shillings
annually for any business undertaken in their area;
• For Village Councils to impose and collect business licence fees of 10,000 shillings
annually for any business.
• Amend the Local Government Finance Act to incorporate the changes proposed
above.
6.
Sectoral allocations and spending plans for 2011/2012
The following presents sectoral budget allocations followed by a brief highlight of sectoral
spending plans. NOTE THAT the figures presented are sectoral allocations and NOT
ministerial allocations.
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Education Sector
a. Budget allocation for the sector
The total budget for the education sector for 2011/12 is 2,283 billion shillings which is an
increase of 11.68% from 2,045.4 billion shillings allocated in 2010/2011.
b. Sector spending plans
• 954.8 billion shillings to primary education.
• 480.7 billion shillings for secondary education development,
• 35.8 billion shillings for Teacher’s capacity building.
• Launching and implementation of the “Ndiyo Naweza” program of intervening on
illiteracy,
• Conducting assessment of the level of illiteracy
Tertiary education:
• Paying for 1,900 students for undertaking the first degree in medicine,
• Paying for 120 Lecturers to pursue postgraduate studies,
• Sponsoring 126 university students studying in Uganda and Mozambique through
exchange programme,
• Paying for 112 disabled persons for their higher education,
• Financing the University of Dar es salaam to establish the students’ resource centre as
a part of celebrating 50 years of the institution.
• Mwalimu Nyerere Memorial Academy to establish a diploma and degree courses in
education finance at Bububu Campus in Zanzibar.
Vocational education
• To address human capability and well-being issues, government has allocated a total
amount of 27.8 billion shillings which is 2% of skills development levy for vocational
training in this financial year.
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Health Sector
c. Budget allocation for the sector
The total budget for the health sector for 2011/12 is 1,209.1 billion shillings which is an
increase of 0.3% compared with 1,205.9 billion shillings allocated in 2010/2011.
a. Sector spending plans
• 20 billion shillings has been allocated through the MMAM/PHSD programme to
construct dispensaries in villages countrywide to improve and strengthen primary
health care services.
• 189.6 billion shillings has been allocated towards primary health care quality
improvement at district level for the procurement and supply of medicines and
medical equipment. The funds will also be used to build capacity of health workers
(Nurses, Doctors, Midwives) at that level.
• 6.6 billion shillings has been set aside for rehabilitation and maintenance of districts
hospitals countrywide. An additional 4.5 billion shillings has been budgeted for
ongoing projects of construction of regional hospitals in Singida, Shinyanga, Mbeya
and Manyara while 5.6 billion shillings has been set aside for maintenance and
renovation of existing regional hospitals country-wide.
• 22.6 billion shillings is has been allocated to implement the programme to reduce
under – five and maternal deaths. These funds will also be used for the supply of
vitamin A and D and about 100,000 delivery packs to delivering mothers.
• 87 billion shillings has been allocated towards Tuberculosis (TB) and Leprosy control
programmes and other communicable diseases countrywide. It will be directed
towards strengthening preventive services.
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76.1 billion shillings has been allocated towards curative services, of which 2.5 billion
shillings will be directed towards cancer treatment.
1.4 billion shillings has been budgeted for supporting people with disabilities and
underserved social group (older people, orphans).
In combating and preventing HIV/AIDS, the government has allocated the sum of
127.1 billion shillings for the supply of ARVs, purchasing 150 CD4 testing machines to
provide services to people living with HIV/AIDS. The money will also be used for
increasing about 400 HIV/AIDS service provision centres.
85.5 billion shillings has been set aside for the provision of Health Insurance Services.
Water Sector
a. Budget allocation for the sector
The total budget for the Water sector for 2011/12 is 621.6 billion shillings which is a 56%
increase from 397.6 billion shillings that was allocated in 2010/11.
b. Sector spending plans
• 86.7 billion shillings has been allocated to Councils and Regional Secretariats for the
Construction of water infrastructure in 10 villages of each Local Government
Authority.
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7.033 billion shillings has been allocated towards the construction of dams and
drilling of wells in Chamwino,Nkasi,Chunya, Bunda, Rorya,Musoma,Kishapu, Bariadi,
Iringa and Meatu Districts.
106.7 billion shillings has been allocated towards the construction of water projects
for Musoma and Bukoba Municipalities.
6 billion shillings has been allocated towards the implementation of a water project in
the city of Dodoma.
8.6 billion shillings has been allocated towards the implementation of a water supply
project in Morogoro Municipality,
6 billion shillings has been allocated towards improving the Water and Sewerage
Services in Dar es Salaam through construction of Kidunda Dam.
24.6 billion shillings has been allocated towards expansion of the water filters at
Lower Ruvu,
Agricultural Sector
a. Budget allocation for the Sector.
The budget for the Agricultural sector for 2011/12 is 926.2 billion shillings which is a 2.5%
increase from 903.8 billion shillings allocated in 2010/11.
b. Sector spending plans
The Sector intends to deal with the main challenges facing agricultural development in the
country including investing in irrigation infrastructure, provision of credit services to
farmers, improved productivity, improving marketing infrastructure and climate change
mitigation measures. Other measures aimed at facilitation include:
• 7.1 billion shillings set aside to facilitate availability of inputs and implements including
purchase of tractors and power tillers,
• 136.7 billion shillings set aside for continued provision of subsidies for fertilizers and
chemical for various crops,
• 7.3 billion shillings allocated towards subsidies for improved seeds and seedlings,
• 18.2 billion shillings allocated towards purchase of food and for conducting surveys to
establish status of food security in the country,
• 1.4 billion shillings for implementing agricultural irrigation projects. Government
intends to develop irrigation infrastructure including 95 irrigation projects to cover
70,500 hectares,
• 6.5 billion shillings allocated towards the provision of education and extension
services and spread of technologies including Farmer-to-Farmer Extension. The funds
will also be used for provision of educational infrastructure,
• 4.5 billion shillings has been set aside for strengthening research on better seeds which
are resistant to pests and diseases, drought and produce high yield. The funds will also
go towards research on Integrated Soil Fertility Management options.
• 10.9 billion shillings towards improvement of productivity of rice production
including making its farming more commercial by providing implements for
cultivating, harvesting and marketing mechanisms,
• 1.9 billion shillings towards implementing reforms and strengthening cooperative
unions including SACCOS,
• 2.1 billion shillings has been allocated for abattoir improvement, capacity building,
skin and hides processing, and
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13.2 billion shillings for Improving environmental conservation including law
enforcement, public education, and sustainable management
Improved Indigenous Goat
Goat Rearing in Kondoa District
Energy Sector
a. Budget allocation for the sector
The total budget for the Energy sector for 2011/12 is 539.3 billion shillings which is a 65%
increase from 327.2 billion shillings allocated in 2010/11.
b. Sector spending plans
• 124.9 billion shillings allocated for finalizing construction of emergency power plants
which will generate additional 160 megawatts in Dar es Salaam and Mwanza,
• 136.9 billion shillings has been set for implementing other special energy programmes
to improve transmission and distribution of power infrastructure,
• 54.2 billion shillings has been allocated for Rural Energy Agency (REA) and Rural
Energy Fund which will scale-up investment in rural energy so as to enable citizens to
establish more economic activities in rural areas as well as creating more jobs,
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6.6 billion shillings has been allocated towards investing in natural gas development at
Songo Songo and Mnazi Bay so as to boost production of gas for use in
manufacturing and domestic consumption, and
6.5 billion shillings has been allocated towards promoting petroleum development in
the country.
Ubungo 100 MW Power Station Using
Using Natural Gas to Generate Electricity
lectricity
Infrastructure Sector
a. Budget allocation for the sector
A total of 2.78 trillion shillings has been allocated to roads and transport infrastructure,
ICT and R & D with specific emphasis being directed to Roads, Airports and Railways
infrastructure. The 2011/12 allocation is an increase of 85 % from 1,505.1 billion shillings
allocated in 2010/11.
b. Sector spending plans
• 112 billion shillings for construction of Airports infrastructure;
• 123 billion shillings for construction and rehabilitation of Railways infrastructure
including procurement and rehabilitation of Wagons;
• 1.7 trillion shillings for construction and maintenance of Roads infrastructure as well as
procurement and rehabilitation of Ferries; and
• 5.0 billion shillings for construction of Government Houses.
On strengthening Information, Communication and Technology (ICT) and Research and
Development (R & D) in the financial year 2011/12 the Government allocates;
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2.0 billion shillings for national ICT backborne infrastructure; and
25.9 billion shillings for financing of research and development.
Employment Creation
Government plans to spend 140 million shillings to employment creation programmes
country-wide.
700 million shillings has been set aside for the “Mwananchi Empowerment Fund
Project” to finance youth self-employment projects,
2 billion shillings has been set aside to facilitate continued implementation of the
“Women Economic Empowerment Project” which seeks to empower women in
Tanzania,
925 million shillings will be provided as loans to Tanzanian small entrepreneurs
through SACCOS,
500 million shillings has also been set aside for the Presidential Trust Fund to support
Small Entrepreneurs of Tanzania.
Manufacturing & Industrial Sector
4.0 billion shillings has been allocated towards Special Economic Zones (SEZ)
programme which will include paying compensation to the land set aside for SEZs,
4.8 billion shillings set aside to continue with construction of a biolarvicideproduction plant in Kibaha. It will produce insecticides for fighting malaria,
4.5 billion shillings has been set aside for Rural Micro, Small and Medium Enterprises
Support Programmes “MUVI” aimed at improving rural employment opportunities in
six regions (Tanga, Pwani, Iringa, Manyara, Ruvuma and Mwanza),
1.8 billion shillings has been set aside for enhancing entrepreneurs activities. Of which,
1 billion is planned to be spent on the National Entrepreneurship Development Fund
(NEDF) which seeks to enhance micro entrepreneurs’ access to finance.
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Budget Reference
Reference Documents
The following is a list of the documents published by Government and used as sources of
information to prepare the budget:
•
•
Tanzania Development Vision 2025, together with its initial Five Year Development
Pan according to which by 2025, Tanzanians will be well educated and able to
economically sustain themselves government will serve the people and the economy
will be strong and competitive,
Macro-Economic Policy Framework: provides information about tax policies and
reforms,
MKUKUTA II, which will last from 2010 until 2015. It focuses on using economic
growth to address poverty and in particular emphasizes the role of agriculture in this,
• The Millennium Development Goals 2015: focus on addressing hunger, education,
gender equality, child and maternal health, fighting HIV/Aids, sustaining the
environment and building a global partnership,
• CCM Election Manifesto 2010 -2015,
• National Debt Strategy,
• Joint Assistance Strategy for Tanzania,
• Sector Policies & Strategies,
• Performance Assessment Framework (PAF) under GBS,
• Ministerials’ Budget Speeches for Year 2011/12,
• 3 Pre-budget Statements originate from Annual Public Expenditure Review
Consultation,
• Medium Term Plans and Medium Term Expenditure Framework Budget Memoranda,
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Appropriation Act, 2011,
Finance Act, 2011
State of the Economy Speech,
National Budget Survey, and
Estimates of Revenue and Expenditure for Year 2011/12 (Volumes I – IV).
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What can you do with this information?
The national budget is an important reflection of what the government really plans to do
in that year. If you want to know where your tax money is going, whether there are
plans to improve education or health in your area, you can look at how and how much
money is allocated, in particular to development. This booklet tries to summarise some of
this information as simply as possible. However, you can find out more about the budget
process from:
• The budget documents of Tanzania (see reference documents) and in particular, the
four volumes of national budget books
books which are available at the ministry of Finance,
• The Ministry of Finance P.O. Box 9111, Dar es Salaam (Website:
http://www.mof.go.tz)
• Local Government Offices and/or officials in your area such as the Village Executive
Chairperson, or
• Policy Forum, P. O. Box 38486, Dar es Salaam.
Remember, it is your right to know this and more information surrounding the national
budget. Talk to your leaders about this information and share it with other people in
your community!
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(Tear-out page)
What are your ideas, questions, thoughts or comments on the budget?
•
Do you need more information than is provided in this booklet? What kind of
information do you need?
•
Is there anything more you would like us to know?
1.
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2. Was the booklet easy to read and understand? □ Yes
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Post or deliver this leaflet to the Budget Department, Ministry of Finance P.O. Box 9111,
Dar es Salaam.
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