DAR ES SALAAM: A presidential commission in Tanzania has proposed 284 reforms to overhaul the country’s tax system, aiming to widen the tax base, improve compliance and create a more business-friendly environment, officials said.
The recommendations were submitted to President Samia Suluhu Hassan on Wednesday following a broad review of tax administration led by former chief secretary Ombeni Sefue.
The proposals are grouped into seven areas, including policy and legislation, digital systems, administration, expansion of the tax base, investment climate, dispute resolution and institutional restructuring.
A large share of the measures – 146 in total – focus on policy and legal changes. These include drafting a national tax policy to provide a consistent framework and reduce frequent changes in taxes and levies, which businesses say create uncertainty.
The commission also proposed a comprehensive taxation law to harmonise rules and clarify revenue-sharing between central and local governments.
Digitalisation is a central pillar of the reform package. Recommendations include developing a mobile application to allow taxpayers to register, file returns and make payments, as well as introducing automated audit systems and expanding the use of data analytics to improve compliance.
Officials said the measures could help move the system towards a more “faceless, cashless and paperless” model, reducing administrative burdens and opportunities for corruption.
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To broaden the tax base, the commission proposed steps to formalise informal businesses, including a one-year tax holiday for start-ups and the creation of a national database of economic activities. Local authorities would play a greater role in identifying and registering businesses.
The report also calls for closer integration of taxpayer identification systems with national ID and licensing databases, alongside expanded use of digital payment tools.
In a bid to improve relations with taxpayers, the commission recommended shifting the revenue authority towards a more service-oriented approach, including a possible renaming of the Tanzania Revenue Authority to reflect that focus.
It also proposed strengthening tax education and introducing lessons on taxation and civic responsibility in school curricula.
To address disputes, the commission suggested introducing online filing systems and setting a 90-day deadline for resolving tax objections. It also recommended establishing a specialised tax division within the High Court.
The reforms could increase tax revenues by about 11 trillion Tanzanian shillings (around $4.3 billion) within three years, raising the tax-to-GDP ratio by about five percentage points, according to the commission.
Tanzania is seeking to increase its tax-to-GDP ratio to 22% by 2050 to support long-term development goals.
The commission said strong political backing would be needed to implement the changes, warning that resistance could arise from groups benefiting from the current system.
