Dissertation (Master of Science in Accounting and Finance)This study examined tax revenue instability, and its consequences in Tanzania from 1996 to 2015. To identify the determinants of revenue stability, this study adopted case study analysis. The study mainly based on secondary data maintained by the Tanzania Revenue Authority (TRA) and World Development Indicators (WDI). The dependent variables in this study are Public spending and Public Investment which have regressed against revenue instability as an independent variable. Overall tax instability was calculated among tax variables using the standard deviation approach. Eventually, the study found that there have been oscillations of revenue against the level of Government spending during the period under review. The total tax revenue oscillated from 2.62 in years 1996/1999 to 2.42 in years 2012/2015; while the Government spending as well oscillated from 3.1 to 3.09 over the same period. Corruption among tax officers, tax exemptions to some tax payers, negative perception on taxes by some tax payers and inadequate tax knowledge among tax payers have been identified as reasons for tax revenue instability. Hence, the study established that the instability of tax revenue results to the instability of public spending and public investment thus, with low revenue collection, public goods and services as well as public investment will be inadequately financed. Finally, the Government through policy makers is advised to set out policies that will enhance stable revenue collection through establishing corruption free movements, disseminating knowledge among tax payers and reviewing tax laws to minimize avenues for tax exemptions; these measures altogether will minimize revenue instability and enhance adequate and sustainable public spending and investment level.