The Tanzania Revenue Authority has had to devise means of arriving at the targeted Tshs.18 trillion ($7.8 billion) for the 2019/2020 financial year.
This is owing to the fact that most donors have withdrawn their pledges citing the increased deterioration of human rights observance in the country.
Tanzania`s budget is 40 per cent donor funded, and in the year ended November 2018 donors released just 0.016 per cent of promised funds for government projects.
The Bank of Tanzania`s monthly economic review for December 2018 shows that Tshs.625.1 billion ($207.05 million) out of Tshs.625.2 billion ($207.04 million) spent on development activities came out of state coffers with donors contributing only Tshs.100 million ($43,323).
TRA has opted to establish a number of new taxes in an attempt to reach the untaxed and arrive at the target. Late last year, President John Magufuli made a move to bring the informal sector into the tax net by introducing 670,000 special cards that would be handed to all those whose businesses have a maximum profit turnaround of Tshs.4 million ($1739). He informed the Regional Commissioners (RCs) at the launch of the cards that it would be them (RCs) to issue the aforementioned cards at a cost of Tshs.20000 ($8.6) and then later carry the money to their respective regional TRA offices.
Similarly last year, the central bank governor, Professor Florens Luoga stated the central bank was preparing a strategy in which all transactions conducted at all bureaux de change would be monitored by the TRA and other institutions. This was after a meeting between TRA management, regional commissioners and the president where they noticed that many bureaux de change in the country were evading taxes. It was found out that at least one licensed bureaux might have seven unregistered bureaux, and only one in 37 bureaux in the country was registered.
In 2017, the government of Tanzania slapped Acacia Mining Plc with a tax bill amounting to Tshs.437 trillion ($190 billion). Tshs.92 trillion ($40 billion) of the bill was unpaid taxes and Tshs.345 trillion ($150 billion) were interest and penalties accrued over a 17 year span between 2000 and 2017. However, Acacia offered to pay Tshs.690 billion (Tshs.300 million) upfront but the country has not yet received even a penny.
The country also embarked on the construction of a 24 kilometer perimeter wall around the tanzanite-rich Mirerani in the Northern Manyara region in an effort to curb smuggling of the rare gemstone. Due to the wall, Tanzanite revenues rose to Tshs.1.28 billion ($556,521) in September 2018 from a low of Tshs.166 million ($72,173) registered in January 2015 and thus increased the contribution of the mineral sector to the economy by 4.8 per cent.
Tanzania`s current tax base stands at 12.8 percent against a population of 50 million meaning its only 2.5 million people that pay tax, Kenya has a tax base of 18.5 per cent against a population of 40 million people and Rwanda with an 11 million population has a tax base of 15.8 per cent.
