Title:
THE EFFECTS OF TAX REVENUES ON NATIONAL CONSUMPTIONS PRIORITIES IN TANZANIA

Authors:
Nassor Issa Ali, Tanzania

Abstract:
This paper examines the effects of tax revenues on national consumption priorities (NCP) in Tanzania against the background of increasing government demand for sustainable financing of consumption-oriented public expenditure amid fiscal constraints. Despite continuous tax reforms, empirical evidence on how different tax components influence national consumption priorities remains limited, creating uncertainty for effective fiscal policy formulation. The main objective of the paper was to assess the effect of income tax (IT), corporation tax (CT), individual tax (INT), and value added tax (VAT) and excise duty (ED) on national consumption priorities in Tanzania. The study adopted a quantitative research design and used secondary annual time-series data covering the period 1991–2024, with Tanzania as the unit of analysis. Data were analyzed using Ordinary Least Squares (OLS) regression techniques implemented in EViews, following standard econometric diagnostic procedures. Ethical considerations were observed through the use of publicly available secondary data from credible national and international sources, ensuring data integrity and transparency. The OLS results reveal that corporation tax and value added tax have a positive and statistically significant effect on national consumption priorities, indicating that these taxes are reliable sources of financing consumption-related government expenditure. Conversely, individual tax exhibits a statistically significant negative effect, while income tax and excise duty are found to be statistically insignificant. Based on these findings, the study recommends strengthening VAT and corporate tax administration while reforming individual tax structures to enhance their contribution to national consumption priorities in Tanzania.