The last two decades have seen Tanzania implement important reforms of its tax system in search for more reliable financing for development, other than foreign aid. Thanks to these efforts, revenue raised domestically has grown noticeably, from 12.2 percent of Gross Domestic Product (GDP) in fiscal year 1997/8 to 17.8 percent of GDP in 2011/12. Nonetheless, spending growth has outpaced revenue growth considerably. In 2011/12 public spending as a share of GDP stood at 31.2 percent, compared to 15.2 percent in 1997/98 (IMF, 2000; IMF, 2012) implying a much larger tax—spending gap today than a decade ago.
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