Harness tech, grow revenue, protect business
ARUSHA: THE call by Vice-President Deogratius Ndejembi for Commonwealth countries to harness technology to improve domestic revenue collection comes at a critical time.
Governments need more resources to finance development, yet taxpayers and businesses also need tax systems that are fair, predictable and efficient.
Speaking at the 46th Commonwealth Association of Tax Administrators (CATA) Annual Heads Meeting and Technicians Conference in Arusha, the Vice-President emphasised that technology should make tax administration simpler, more transparent and more equitable, not merely provide governments with new tools for collecting more money.
Tanzania’s target of collecting 36.99tri/- in tax revenue during the 2026/27 financial year, with domestic revenue expected to finance about 74.2 per cent of the national budget, illustrates the importance of this agenda.
Greater domestic revenue mobilisation will strengthen economic self-reliance and reduce excessive dependence on external financing. But revenue growth should not come at the expense of economic growth. As the Vice-President observed, tax policy and administration must protect the revenue base while preserving a competitive environment in which businesses can invest, trade and expand with confidence.
This balance is fundamental. A tax system that is too burdensome, unpredictable or complicated can discourage investment and push economic activity into informality. Technology will help resolve some of these challenges.
Digital invoicing, data analytics, automation and artificial intelligence can reduce administrative costs, identify non-compliance more accurately and make it easier for compliant taxpayers to meet their obligations.
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They can also reduce unnecessary face-to-face interactions, limiting opportunities for corruption and improving transparency. Tanzania’s progress in this area, including the Tanzania Revenue Authority’s Integrated Domestic Revenue Administration System and its Electronic Invoicing Module, is encouraging.
The transition from physical processes to digital systems make compliance more convenient, while giving the tax authority better information for risk-based enforcement.
However, digitalisation also creates new responsibilities. As TRA Commissioner General Yusuph Mwenda noted, technological transformation must be accompanied by strong controls to protect taxpayer information, data security and system integrity. Public confidence in digital tax systems will depend heavily on how responsibly governments manage the information entrusted to them.
The emphasis on artificial intelligence and data analytics by CATA is therefore timely. But technology should remain a means to an end. The ultimate objective must be a tax administration that is efficient, trusted and capable of supporting sustainable economic activity
