Tanzania is one of the nine pilot countries for the United Nation‟s Reducing Emissions from Deforestation and Degradation (REDD+). It has been receiving significant funding from development partners including the World Bank. Under the REDD+, countries on a voluntary basis, aim to reduce the rate of deforestation and receive compensation in proportion to the carbon emissions saved following the intervention. It creates incentives for developing countries to invest in low-carbon paths to sustainable development. The question however is whether REDD+ will compensate adequately the forest-dependent livelihoods. This information is important for sustainable development as poor communities depend on forest goods and services for their livelihoods. A total of 110 households were selected randomly for interviews to determine the preferred incentive package and analyse the REDD+ governance structures. Through Choice Model analysis, the findings showed a high preference by the respondents on sustainable utilisation of forest resources; improved farm productivity and markets access for agricultural commodities. While REDD+ has the potential to address deforestation, it is questionable whether the livelihood aspect as preferred by communities will be achieved due to mainly inefficient governance structures in place. This will undermine the spirit of sustainable development that emphasize on socio-economic and environmental sustainability.