President Samia officially inaugurates Tax Reform Commission

DAR ES SALAAM: President Samia Suluhu Hassan officially inaugurated the Presidential Commission on Tax Reform on Friday, nearly two months after its formation, noting a significant increase in revenue collection.

Speaking at the inaugural ceremony held at the Dar es Salaam State House, the Head of State highlighted Tanzania’s impressive economic growth, saying such developments are yet to be reflected in the nation’s tax revenue collection.

President Samia emphasized the importance of aligning economic growth with tax collection and tasked the commission to undertake a thorough review of tax rates to determine whether they are fair, too high, or too low.

She also underscored the need for every eligible taxpayer to fulfill their obligations, ensuring that no one is exempt from contributing to national development.

“If this area is well managed, it will contribute massively, considering the pace of our economic growth. Our economy is growing rapidly, but it does not reflect what we are collecting; we are collecting very little, and much of it ends up in people’s pockets. The ongoing economic activities in the country and the population size do not reflect the revenue we are receiving,” she stated.

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According to the President, in the country with a population of 65 million people only about 2 million people are actual taxpayers where she insisted that “everyone must contribute, each person should pay tax according to their capacity for us to accomplish more as a country.”

Additionally, President Samia noted that the most important things that the government is working on are to build a fair tax system where everyone who is eligible to pay taxes pays the right amount, and all taxes collected in accordance with the law.

However, she said that their aim is to ensure the country’s tax system promotes industrial economic growth and contributes to building an inclusive economy as well as enabling the government to achieve its goals of bringing prosperity to citizens.

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Citing on the trend of tax collection in the country, she said that tax collections increased from an average of 850m/- per month in 2015 to an average of 2bn/-per month in 2022/23.

However, the President said that in their commitment of building an inclusive economy they are equipped to strengthen revenue sources that enable the government to fulfill its responsibilities by making them reliable and predictable “In my opinion and I believe this is the opinion of many others, domestic taxation is among the most reliable sources of revenue,” she added.

Moreover, Dr Samia said that among the indicators of overall economic stability outlined in the Third National Development Plan for 2021 to 2026 is the increase in tax revenue to reach 14.4 percent of the national Gross Domestic Product by 2026 a level that will enable the country to be self-sufficient in funding its development projects.

However, according to the Tanzania Revenue Authority (TRA), in the year 2023/24, tax revenue has reached approximately 12 percent of the national GDP which means that the country is still below the target and has to work hard.