TRA record thrills experts

• Call for sustaining engagement approach

 DAR ES SALAAM: ANALYSTS on Wednesday commended the Tanzania Revenue Authority (TRA) for significantly improving operational efficiency through a taxpayer-friendly engagement approach, which contributed to a record-breaking tax collection of 32tri/-in the recently concluded 2024/2025 financial year.

According to TRA, the 2024/2025 FY has seen the collection increasing by 16.7 per cent, reaching 32.2tri/- beyond the set target which was about 31tri/-, the highest record since the inception of the authority in 1996, nearly three decades ago.

More notably, the revenue body surpassed revenue targets in every single month of the financial year, as monthly collection averaged 2.69tri/-.

Speaking to the Daily News, Professor of Economics and Founding Director of the Centre for Chinese Studies at the University of Dar es Salaam (UDSM), Humphrey Moshi said friendly tax collection approach including consultations, which has been emphasised by President Samia Suluhu Hassan, motivated many businesses to comply.

As a result, Prof Moshi expressed confidence that the new tax culture has increased the number of taxpayers, unlike the previous aggressive and coercive enforcement tactics that demotivated them.

He added that on-going investments in key sectors such as manufacturing, transport and logistics as well as other economic activities have also broadened tax sources.

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Looking forward, Prof Moshi urged the government to ensure the revenue collected are spent wisely to fund development projects including Science, Technology, Engineering and Mathematics (STEM), irrigation schemes and alternative energy sources including solar which can boost the country’s economic growth, elevating both the Gross Domestic Product (GDP) and per capita income.

The taxman targets collecting 36tri/- in the 2025/2026 financial year. He challenged the government to guarantee effective revenue spending and ensure the GDP grow rate reaches eight or 10 per cent from the current 5.5 per cent.

Economist cum Investment Banker, Dr Hildebrand Shayo said TRA’s great milestones demonstrate its operational excellence and increased economic participation.

From a financial perspective, he said TRA’s effective tax collection supports the country’s independence, enables substantial public investment and paves the way for sustained economic growth.

“These can be concisely outlined as improved domestic resource mobilisation, greater fiscal stability, facilitation of infrastructure investments, support for social sector development, increased investor confidence, faster economic formalisation, better public service delivery and governance,” Dr Shayo said.

To maintain the stunning performance, he said TRA must establish both structural and behavioural strategies that will secure its progress while gearing up for future expansion.

“The current challenge is to sustain momentum, improve tax fairness and promote lasting socio-economic growth,” Dr Shayo said.

To strengthen this contribution, he said the government must maintain efficient and fair tax administration while ensuring that the revenues collected are invested transparently and effectively.

Meanwhile, Economist, Dr Isaac Safari of the Saint August University of Tanzania (SAUT) attributed the upward trend in revenue collection to diversification of the country’s economic infrastructures including the Dar es Salaam Port and airports which together boost revenue collection in form of custom duties and taxes.

He said the revamping of Air Tanzania Company Limited (ATCL), a state airline with 16 aircraft including one cargo plane, further boosts efficiency across all production sectors such as tourism and trade by accelerating mobility.

Dr Safari said TRA’s revenues are crucial for growing the country’s GDP, which in turn helps forecast citizens’ welfare by enabling improvements in social services such as health and education, based on the government’s financial capacity and budget.

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On boosting tax collection, he advised TRA to innovate new sources of revenues while cutting down the authority’s operational cost by maximising Information Communication Technology (ICT) usage in collecting taxes across the country.

Dr Safari emphasised the importance of focusing on the agriculture sector, which employs a large proportion of Tanzanians, noting that income tax collection depends on the overall economic wellbeing of all citizens.

He also underlined the importance of tax education to all citizens through comprehensive tax awareness campaigns on the benefit of taxes and how to pay it to uplift voluntary payment.

Tax Consultant, Ms Gaudensia Malulu applauded TRA and the government for embracing professionalism, ICT and adopting friendly policies for tax payment.

Ms Malulu said the authority should keep in check with digital revolution in order to tap emerging revenue sources through online business platforms.

In another development, Economist, Professor Kitojo Wetengere, based at the University of Arusha, said the government should ensure appropriate spending of funds collected in various development projects including expansion of road networks to motivate the tax payers.

He said corruption and mismanagement of projects in any country can demotivate citizens to pay tax insisting on ensuring the public funds are utilised to meet intended targets.