Poverty and Human Development Report 2009 - UNDP in Tanzania

POVERTY AND HUMAN DEVELOPMENT REPORT 2009
Goal 2
114
Equitable Allocation of Public Resources with
Corruption Effectively Addressed
The delivery of essential social services to all Tanzanians depends upon the transparent, fair and
equitable collection and allocation of public funds. Indicators for this goal include:
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Total revenue collected as percentage of revenue due at national level. [Proxy indicator
used: Total tax revenue collected by TRA as percentage of estimated collection in a
particular period]
Percentage of procuring entities complying with the Public Procurement Act and
procedures
Percentage of government entities awarded clean audit certificate from National Audit
Office (NAO)
Percentage of local government authorities that receive the full calculated amount of their
annual formula-based budget allocation
Number of convictions in corruption cases as percentage of number of investigated cases
sanctioned for prosecution by the Director of Public Prosecutions (DPP)
Total value of revenue received from concessions and licences for mining, forestry, fishing
and wildlife as a percentage of their estimated economic value.
Revenue Collection
The ‘total revenue collected as a percentage of revenue due at national level’ is the specific
MKUKUTA indicator, however, data are not available on total revenue due at national level.
Therefore, the ‘total amount of tax revenue collected by the Tanzania Revenue Authority (TRA) as
a percentage of estimated collection’ is used as a proxy indicator. In 2006/07, data indicate that
the government surpassed its target, with revenue collections of 111.4% of the total estimated
collection. However, data for July 2008 to March 2009 is slightly below target at 91% of total
estimated collection. This decrease may in part be explained by the effects of the global financial
crisis. As reported in Cluster I, domestic revenue collections (as a % of GDP) have increased
steadily over recent years, but estimates of tax receipts for 2008/09 have been revised downwards
due to the global slowdown.
Of further note, exchange rate movement in recent years have worked in favour of revenue
collection performance. Typically, targets for revenue collections are made at the beginning of
a financial year and they are in Tanzanian Shillings. However, the prices of goods and services
crossing the borders are quoted in foreign currencies, particularly US dollars. Taxes are computed
in foreign currency and paid in local currency at the exchange rate on the day of payment. Given
the decline in the value of Tshs against the US dollar in the last few years, the value of taxes in
Tshs has been increasing, even without expanded tax collection efforts. It would be useful in the
future, for actual revenue collections be adjusted to take into account the effects of exchange
rate movements, so as to better gauge progress in government revenue collection.