ZANZIBAR: PRESIDENT Hussein Ali Mwinyi has expressed gratitude to President Samia Suluhu Hassan, for forming a Tax Reform Commission, noting that it will help both sides of the Union to reform and strengthen tax systems.
Speaking during a meeting with members of the President’s Tax Reform Commission at the State House, Dr Mwinyi said the reforms are expected to bring major changes in the tax system in the country.
“After people’s comments and views on how to improve, let us hope for better tax system,” said Dr Mwinyi. The commission is in Zanzibar to collect views from different groups of people.
Dr Mwinyi reflected on various issues, including recommendations on tax-related matters, to help both governments make correct decisions.
Dr Mwinyi said getting the tax system right is important, as both sides seek higher levels of productive investment to support job creation and sustainable economic growth.
In a separate meeting with the Tax Commission, the Zanzibar’s First Vice President, Mr Othman Masoud Othman also commended President Samia for seeking taxpayers’ views, aiming at having a better tax system in the country.
Mr Othman used the opportunity to give his views that the current tax system in the country allows for numerous overlapping taxes managed by different authorities, which can negatively impact businesses in various sectors.
“The existence of multiple tax authorities not only creates inconveniences for businesses but also constitutes a significant issue that the Commission should address, particularly in key economic sectors such as aviation and agriculture,” said Mr Othman.
He emphasised the need to reform the tax system in Tanzania to simplify tax processes and facilitate smoother business operations compared to the current situation.
ALSO READ: Tax Reform Commission: Charting fiscal excellence
Mr Othman, further, highlighted that while the nation is striving to develop various sectors, it is essential to adopt a more effective sector-specific tax system, such as for agriculture, to ensure that available resources are invested efficiently to yield benefits for the country.
He noted that the current tax system creates loophole for some businesses to evade paying tax, abandon business and discourage foreign investors.
Mr Othman observed that Tanzania once had a thriving airline sector that provided significant employment opportunities.
“However, this sector has declined and now requires substantial reforms to the tax system to enhance its productivity and benefit the nation,” he said.
He argued that air travel has increasingly become a service primarily accessible to the wealthy, a situation that needs to be addressed to ensure broader access and foster growth in the sector.
Mr Othman suggested that Tanzania should adopt best practices from other countries by tailoring its tax system to the country’s unique conditions to improve tax collection and support economic growth.
“I also propose reducing the number of tax authorities to ease the burden on businesses, which are currently regulated by multiple agencies. This practice frustrates members of the business community,” he added.
In response, Ambassador Ombeni Sefue, thanked both Dr Mwinyi and Mr Othman for their valuable advice.
He said the Commission has been tasked to engage various stakeholders in reviewing the entire tax system and submit recommendations to the government for improvement.
He emphasised that the initiative aims to assist both governments in making necessary reforms to create a simpler and more business-friendly tax environment in Tanzania.
The Commission, which was established by President Samia and launched on October 4 this year, has been mandated to review all aspects of the tax system, including administration, tax authorities, compliance, rates and other relevant factors, with the goal of making tax payments easier and more efficient.
The tax regime in both Zanzibar and mainland Tanzania consists of various direct and indirect taxes, including income tax, Value Added Tax (VAT), import duty, excise duty and stamp duty. Local governments also levy taxes.
All central government taxes are administered by the Tanzania Revenue Authority (TRA) for the mainland, while the Zanzibar Revenue Authority (ZRA) is responsible for the Isles
