http://www.imf.org/external/pubs/ft/survey/so/2011/CAR051111A.htm Expand tax base In spite of important progress over the past decade, Tanzanias tax revenue collection, at around 15 percent of GDP, is still below potential. The tax base could be expanded by scaling back widespread exemptions, aligning execise tax rates to the regional level, and exploring options regarding mining taxation. Revenues from the (mostly gold) mining sector have remained small at about ½ percent of GDP despite the sharp rise in the price of gold that has helped lift gold exports to 7 percent of GDP. They comprise mainly taxes on wages and some royalties, as existing agreements with mining companies have provided significant corporate income tax holidays. As a result, none of the existing gold projects have paid material income tax to date. Stepped-up efforts to bring to resolution pastand highly contentioustax disputes with existing gold mines, together with improvements in mining tax administration, could generate some additional revenue. The authorities are committed to embark on a path of fiscal consolidation and more realistic budgets. Although an effective reform of tax and spending policies requires time, a signal to investors and donors of the authorities intentions should be provided at the time of the 2011/12 budget. An ambitious spending containment is required next year in view of the need to safeguard priority spendingall the more so if risks of donor aid shortfalls and higher international fuel prices were to materialize.