Dar es Salaam — Tanzania's earnings have declined by 5.1% due to a tendency by traders to postpone importation as they anticipate a new tax a report said.

According to Bank of Tanzania (BoT)'s Monthly Economic Review of August 2012 availed to East African Business Week last week in Dar es Salaam, the revenue excluding local government authorities own sources was Tsh576.2bn ($366.54m) which is equivalent to 91.8% of the target.

"Tax revenue amounted to Tsh546.2bn ($366.54m), equivalent to 5.1% below the target and non-tax revenue was Tsh30bn ($19.13m), the central bank said, adding grants amounted to Tsh206.8bn ($131.64m), compared to Tsh178.8bn ($113.75m) projected for the month."

The report said total expenditure for the month was Tsh539.5bn ($343.19m), comprising of recurrent expenditure amounting to Tsh424.8bn ($270.16m) and development expenditure of Tsh114.7bn ($72.94m).

"This was against the estimated expenditure of Tsh1,116.2bn ($710.04m) for July 2012 which is lower than estimated expenditure, under other recurrent and development expenditure is consistent with the process of appropriation of funds by ministries, departments and agencies at the beginning of a financial year," the BoT said.

The government budgetary operations for the month resulted in an overall deficit of Tsh90bn ($57.25m). "The deficit was financed by net foreign loans of Tsh67bn ($42.62m) and a net domestic borrowing of Tsh23bn ($14.63m)."

It further added, during July 2012, total resources, on cheques issued basis, amounted to Tsh782.9bn ($498.03m) while total expenditure was Tsh539.5bn ($343.19m), resulting in an overall budget deficit after adjustment to cash and expenditure float of Tsh90bn ($).

According to central bank the deficit was financed through both domestic and foreign sources.