revenue policies
	expenditure policies and
	budget, payment and accounting systems

The measures outlined below should all be put in place within the next year or so. Some will have an immediate or short term impact while others will not begin to take effect until the medium term. When they are all in place the system of financial management should be efficient and effective in moving towards a pro-poor, poverty reduction budget.

	implement the measures outlined in the Zanzibar Financial Administration Bill of 1997
	in collaboration with the Government of Tanzania, finalise and implement a formula for dividing revenue between mainland Tanzania and Zanzibar

 

	formulate trade, investment and economic policies to revive the clove industry (through private enterprise development and the introduction of market mechanisms)
	promote fiscal and non fiscal incentives for production and small enterprise development on Pemba Island
	harmonise tax rates and tariffs for sugar, kanga, rice, wheat flour and cooking oil

Legal and regulatory measures related to the fiscal regime (tax system)

	review income tax rates and family reliefs so that they apply uniformly on mainland Tanzania and Zanzibar
	review Zanzibar Investment Promotion Agency (ZIPA) and Zanzibar Free Zone Authority (ZAFREZA) legislation so as to improve GOZ budget performance
	rationalise tax exemptions and fiscal incentives so as to promote sustainable economic development and poverty alleviation goals
	develop legislation to govern how local authorities raise, retain and use their own local government revenues

	improve key departments under the Ministry of Finance and Economic Affairs in terms of: improving organisation structures, regulations and procedures developing a human resource development policy making wider use of modern technology for collection and control of data
	restructure the Port and Marine Authorities so as to increase their efficiency in revenue collection and in import and export activities
	widen the non-tax revenue base after making a study of licenses and fees
	design systems for co-ordinating revenue collection, allocation, retention and its use at central and local government levels

	GOZ to implement the good governance policies outlined in the ZPRP
	GOZ to intensify the ongoing political dialogue between CCM and CUF by way of overcoming the present political impasse
	review the Act of 1978 on grants, loans and guarantees so that GOZ can mobilise external resources in collaboration with GOT
	initiate direct consultations with development partners. (GOZ to request assistance from UNDP and bilateral donors regarding approaches and methods)
	formalise relationships with non government organisations (NGO) and community based organisations (CBO) that are working towards poverty reduction
	design ways of mobilising external financing and channelling development assistance to poverty reduction programmes
	implement monetary and fiscal policies aimed at increasing government credibility (eg by paying internal debts and by ensuring that the Zanzibar Investment Promotion Agency (ZIPA) is not involved with fiscal matters)

	revenue policies
	expenditure policies and
	budget, payment and accounting systems

The expenditure policies have three main targets:

	to balance the budget in terms of revenue and expenditure
	to make optimal use of such resources as exist
	to ensure that development expenditure is well focussed on poverty reduction activities

The plan is to have the financial management system integrated with the Public Expenditure Review (PER) and Medium Term Expenditure Frameworks (MTEF). This will ensure that the ZPRP is part of an integrated policy, planning and budgeting system which is driven by policy priorities and disciplined by budget realities. The overall goal is to increase the amount of resources being targeted on poverty reduction priority areas.

Measures to optimise the use of recurrent expenditure for poverty reduction goals

	reduce unnecessary public expenditure
	exercise proper control over transport expenses, fuel allowances and 'miscellaneous' items
	implement the Civil Service Reform Programme so as to reduce over employment in the government sector. This will include: manpower management and personnel control right-sizing the civil service at central and local levels implementing pay reform
	enhance cost sharing and promote private sector participation in the provision of public services (water, education and health)
	privatise major parastatal organisations (including making sure that ZSTC operates as a 'corporate entity' charged with improving the clove industry
	develop a short and medium term framework for paying off the government's domestic debt

	increase the budget allocation to development expenditure
	expand and improve those development projects that focus on poverty reduction
	design strategies to mobilise external resources for development projects (in collaboration with UNDP and other development partners)
	re-examine the philosophy, justification, organisation and management of the Community Development Projects (CDP) initiatives with a view to integrating them into the ZPRP process.
	design strategies and measures to make sure that development expenditures are well planned and managed. This will include building credible monitoring and evaluation systems into all development projects.

	revenue policies
	expenditure policies and
	budget, payment and accounting systems

	review the duties and functions of the office of the Commissioner for the Budget and Macroeconomics in the Ministry of Finance and Economic Affairs with a view to increasing the efficiency, effectiveness and transparency of the budgeting process
	design a systematic budget policy and framework
	build the capacity of staff associated with the budget process
	design a system for the control, monitoring and review of all fiscal systems
	continue with the Cash Budget System

	implement measures suggested in previous fiscal studies by the Bank of Tanzania (BOT) and the Government of Zanzibar
	organise the transfer of government accounts from the Peoples Bank of Zanzibar (PBZ) to BOT
	install a transparent, government payment system which is not cumbersome and which does not have double standards. It should include in-built controls against fraud
	design a transparent and flexible mechanism to allow the GOZ to access overdraft facilities from the BOT
	expand and improve the systems and capacity of the offices of the Auditor General and Accountant General

	revenue policies
	expenditure policies and
	budget, payment and accounting systems