Tax systems on spotlight
…Samia unveils plan to revamp tax administration
…Emphasis to be placed on laws and regulations
DAR ES SALAAM: PRESIDENT Samia Suluhu Hassan announced yesterday that the government will set up a committee to conduct a thorough analysis of the country’s tax administration system, focusing specifically on laws and regulations.
President Samia made the revelation during the 15th meeting of the Tanzania National Business Council (TNBC) staged at the State House in Dar es Salaam.
“Before this meeting, I had a meeting with several businesspersons, and the predominant issue they raised was taxation,” Dr Samia said.
“The government is determined to eliminate tax administration challenges facing investors and traders.
A committee comprising both government and private sector members will be formed to analyse the system in detail and provide recommendations that align with our country’s needs,” she added.
As the chair of TNBC, President Samia led discussions on key issues affecting the business and investment climate in Tanzania. Since its establishment in 2001, TNBC has played a vital role in advising the government on enhancing the business environment.
President Samia highlighted the council’s contributions, noting that it has facilitated the enactment, amendment, or repeal of various policies, laws and procedures, thereby significantly improving the business and investment landscape.
She further said the theme of the meeting, “Digital Revolution and Opportunities for Economic Growth,” coincided with the completion of the Tanzania Digital Economy Strategic Framework 2024-2034, which was officially launched during the event.
The strategy aims to improve, integrate and harmonise ICT systems to enhance service delivery to the private sector and other stakeholders.
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“I commend the Ministry of Information, Communication and Information Technology and the TNBC Digital Transformation Working Group for completing this strategy,” President Samia said, urging the ministry to work on integrating all systems by the end of this year.
Despite global challenges, she said Tanzania’s economy has shown resilience, growing at 5.2 per cent in 2023 compared to 4.7 per cent in 2022. Inflation has remained at 3 per cent, within the target of 3.5 per cent, and food sufficiency is over 120 per cent.
“This favourable economic climate has spurred business growth and attracted investment. Between July 2021 and June 2024, 1,350 major investment projects valued at 14.2 billion US dollars were registered, expected to create 324,381 jobs.
“Of these, 866 projects involve foreign investors, highlighting the attractiveness of Tanzania’s investment environment. Additionally, 85 projects represent expansions of previous investments,” she said.
President Samia also mentioned the Standard Gauge Railway (SGR) electric train services between Dar es Salaam and Dodoma, which she will officially launch on Thursday. “This significant investment is expected to generate numerous commercial opportunities,” she added.
Under the 4R philosophy (Reconciliation, Resilience, Reform and Rebuild), the government has reformed railway operations, amending laws to allow private operators to use the infrastructure for transport services. “The regulations are now in place, so take advantage of this opportunity,” President Samia said.
Addressing foreign currency challenges, Dr Samia said the government has developed long-term strategies to increase exports, boost domestic production of essential imports and eliminate the need for paying various government fees in US dollars.
The government has also removed the distinction between food and commercial crops, with all now considered commercial, generating quicker revenue.
In response to climate change, President Samia said the government launched a national strategy to increase the use of clean cooking energy from 5 per cent in 2024 to 80 per cent by 2034. This initiative opens opportunities for the private sector in gas cylinder production, distribution, stove manufacturing and clean energy technology innovation.
Regarding electricity, President Samia said the Julius Nyerere Hydroelectric Power Plant (JNHPP) has started generating electricity, adding 705 megawatts to the national grid. However, challenges remain in transmission and reception across Tanzania.
“The government will prioritise the 4R philosophy to continue fostering private sector growth. Efforts will focus on promoting regional and national businesses, facilitating cross-border trade, and simplifying the formalisation of businesses. The government will also streamline registration systems and investment procedures in Public-Private Partnership (PPP) projects,” she said.
President Samia acknowledged existing challenges, including sector coordination, tax stamp costs, permit delays and exclusion from some changes.
“We will continue to address these issues to ensure the mission is understood and managed across the entire government,” she said.
The representative of the Chairperson of the Tanzania Private Sector Foundation (TPSF), Ally Amour, highlighted several challenges faced by businesspersons last year, despite the significant successes achieved in recent years. Issues included the closure of bank accounts, unauthorised seizure of funds and the shutdown of Electronic Fiscal Devices (EFD) machines.
“After TPSF engaged with these traders, it became evident that some had tax debts and had breached their payment agreements, justifying the use of agency notices. However, there were also traders with significant outstanding debts who lacked any agreement with the Tanzania Revenue Authority (TRA) on repayment terms, leading to the use of agency notices for tax collection,” he said.
He added, “Conversely, some traders had no debts, making the application of agency notices incorrect in those cases.”
Mr Amour said TPSF has already discussed these issues with the TRA Commissioner and engaged the private sector in these discussions.
In the digital economy era, he said colleges and the private sector must collaborate and establish centres of excellence, akin to Silicon Valley, to foster innovation and support creative youth.
