DAR ES SALAAM: Tanzania’s push to build a $1 trillion economy by 2050 will depend on sweeping tax reforms to strengthen domestic revenue and support private sector growth, President Samia Suluhu Hassan said Wednesday.
Speaking after receiving a report from a presidential commission reviewing the country’s tax system, Hassan said the reforms were essential to creating a sustainable financial base for the long-term development agenda under Vision 2050.
“The $1 trillion goal is a central pillar of Vision 2050, which requires a fundamental shift in how the country collects and manages its revenue,” she said at the State House in Dar es Salaam.
The commission, tasked with examining longstanding concerns raised by businesses, investors and other stakeholders, has proposed 284 recommendations aimed at improving tax policy, administration and the investment climate.
Hassan said the review marked the first comprehensive assessment of Tanzania’s tax system in more than three decades, following a previous inquiry in 1989.
She said reforms would be critical to enabling the private sector to drive growth, noting that businesses and other non-state actors are expected to contribute about 70% of the Vision 2050 implementation, compared with 22% by the government and 8% by public institutions.
“Without a conducive tax environment, the private sector cannot fulfil its role,” she said.
The president said the reforms would be implemented under her administration’s “4Rs” framework – reconciliation, resilience, reforms and rebuilding – to ensure a smooth and inclusive transition.
She acknowledged that changes could face resistance and short-term disruptions but said the approach would help maintain national cohesion during the transition.
The proposals include measures to improve fairness in taxation, reduce inconsistencies in tax policies and create a more predictable environment for investors.
Hassan said the government would also consider recommendations to rebrand the Tanzania Revenue Authority to reflect a more service-oriented approach.
She added that boosting domestic revenue collection was key to reducing reliance on external financing for essential services such as water, education and infrastructure.
According to the commission, the reforms could raise Tanzania’s revenue collection to about 18% of gross domestic product, helping the country finance a larger share of its development needs.
The government also plans to prioritise formalising informal businesses to broaden the tax base and improve access to finance for small enterprises.
Implementation of the reforms will be phased over the short, medium and long term, including legal changes and the adoption of new technologies such as artificial intelligence, Hassan said.
The long-term phase is expected to be completed within the current administration, laying the groundwork for achieving the Vision 2050 targets.