PRESIDENT Samia Suluhu Hassan has tasked members of the presidential commission on tax reforms to develop strategies aimed at promoting voluntary tax compliance, expand the tax base and addressing public grievances regarding taxation.

During the swearing-in ceremony for members of the new commission at the State House in Dar es Salaam yesterday, the president acknowledged the challenges facing tax administration, underlining that this hinders execution of development plans.

There is disconnect between the country’s economic growth, population increase and tax revenue collection, she said, explaining that currently, out of approximately 36 million eligible taxpayers, only two million are actively paying taxes, a situation she qualified as ‘concerning.’

“There is a substantial informal sector—up to 60 percent of all economic activity — that is not officially registered as taxpayers. We must work to include them,” she stated.

Outlining the government’s commitment to fostering an inclusive and rapidly growing economy aimed at eradicating poverty at the individual level, she stressed the establishment of a fair justice system and effective administrative policies that encourage voluntary tax payment.

Addressing complaints received from key taxpayer groups, she acknowledged the recurrence of issues such as high tax rates and negative interactions with tax administrators.

“Many taxpayers have expressed concerns over the use of abusive language and coercive tactics by some revenue officers, which undermine voluntary compliance,” she said.

Despite previous reforms that increased tax revenue collection from 700bn/- in 2015 to approximately 2trn/- in 2022, there is significant room for improvement, she said, setting a target for tax revenue to account for 14 percent of total revenue by 2026 while acknowledging existing challenges.

Dr. Moses Kusiluka, the chief secretary, announced that the commission will operate for six months, with his office coordinating its efforts. The commission was set up in August to review and advice on tax matters. 

The commission is chaired by Ambassador Ombeni Sefue who is former chief secretary, as well as notable members like Prof. Florens Luoga – the former central bank governor, Prof. Mussa Assad who is a former controller and auditor general, along with Ambassador Maimuna Tarishi, a former principal secretary.

Other members include Aboubakar Mohamed Aboubakar from Zanzibar University, Ambassador Mwanaidi Sinare Maajar who is a veteran law consultant, tax advisory executive David Tarimo, and Rished Bade, a former commissioner general at the Tanzania Revenue Authority (TRA).