TANZANIA’S tax collection system has undergone a dramatic transformation over the past four years under President Samia Suluhu Hassan.
Her administration has rolled out a series of reforms that have not only modernised the tax system, but also created a more investor-friendly environment, boosted revenue generation, and encouraged a culture of voluntary tax compliance.
President Samia’s approach has primarily focused on making the tax system easier to navigate, more predictable, and fair. These efforts have paid off handsomely, with the Tanzania Revenue Authority (TRA) reporting remarkable growth in tax collection.
The TRA’s efforts have expanded the taxpayer base and increased tax compliance, both from new and existing taxpayers.
According to TRA Commissioner Mr Yusuf Mwenda, this success is reflected in the significant increase in tax refunds. From July 2020 to February 2021, refunds amounted to 92.3bn/-.
Fast forward to the same period in 2024-2025, and that figure soared to an impressive 1.2tri/-.
But it doesn’t stop there. The broader picture shows a dramatic rise in tax revenue, with a notable 78 per cent increase in total tax collection since President Samia took office.
From July 2024 to February 2025, the government collected 21.2tri/-in taxes, up from 11.9tri/- during the same period in 2020-2021.
This marks a record-breaking 17 per cent growth in tax revenue, a feat that has never been achieved since the establishment of the TRA in 1999.
“The key to this success is the building of stronger relationships between business leaders, the public, and the TRA,” explains Commissioner Mwenda. “Our focus on improving cooperation with religious, community, and cultural leaders has paid off. As a result, taxpayers are now paying their taxes voluntarily.”
Mwenda highlights that the TRA is committed to engaging with taxpayers regularly, hosting meetings every Thursday to address any issues or concerns.
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This open communication has helped foster a sense of partnership and trust between the TRA and the public. President Samia’s administration has also made considerable strides in creating a tax system that encourages voluntary compliance.
The government’s proactive approach includes regular meetings with taxpayers, discussing issues in real-time, and swiftly resolving conflicts.
According to Mwenda, this has been crucial in ensuring that taxpayers feel that their concerns are heard and that their tax contributions are fairly assessed.
Another hallmark of President Samia’s leadership has been the creation of the inaugural Presidential Commission on Tax Reform.
At the launch ceremony, the President highlighted that while Tanzania’s economy has been growing, that growth hasn’t yet been reflected in the country’s tax revenue.
This disconnect was a clear sign that reforms were needed to align the economic boom with a more robust and fair tax system.
The Commission has been tasked with reviewing tax rates to ensure they are neither too high nor too low, ultimately aiming to improve both business conditions and revenue collection.
An economist and investment banker Dr Hildebrand Shayo, believes the tax reforms implemented under President Samia have been pivotal in enhancing the tax environment.
He points to the reduction in income tax rates in May 2021, which lowered the tax rate by one percentage point to 8% starting from the 2021/22 financial year.
This reduction, which took effect in July 2022, was a strategic move to ease the tax burden on Tanzanians and stimulate economic activity.
“The establishment of the Tax Reform Commission is another critical step forward,” says Dr Shayo. “This body will look into centralising tax policy, tackling the informal sector, and addressing the challenges faced by tax administrators.
The Commission’s role in improving tax compliance cannot be overstated.” Dr Shayo also stresses the importance of a predictable tax system, which can transform the business environment, making it more conducive to both local and foreign investment.
Over the last four years, President Samia has also prioritised fiscal decentralisation, recognising the importance of empowering local governments to generate their own tax revenue.
This has been a significant departure from the past, where subnational governments often struggled with limited capacity and resources.
By improving their ability to collect taxes, the government aims to increase fiscal autonomy and reduce reliance on centrally allocated funds. At the same time, the government has taken steps to ensure that tax collection is fair and not burdensome.
President Samia has been vocal about the importance of a tax system that doesn’t scare off investors. She has instructed the TRA to resolve any tax disputes with foreign investors quickly, emphasising that oppressive tax regimes hinder economic development.
“We need to collect taxes effectively but in a way that doesn’t make anyone feel punished or burdened,” President Samia has said.
A TRA ex-board chairperson, Prof Marcellina Chijoriga, believes the tax reforms introduced under President Samia have had a far-reaching impact, attracting investors across all sectors.
She notes that the business environment in Tanzania has become far more investor-friendly, both for local entrepreneurs and foreign investors.
“If you want businesspeople to pay taxes, you need to create a good environment for them to do business in,” says Prof Chijoriga.
“That’s what we’re seeing now people are trading more freely, and tax collection is more transparent.” Feedback from the public has been overwhelmingly positive.
A taxpayer from Dar es Salaam, Mr Christian Kimati, shares that under President Samia’s leadership, tax collection has become more mutual and less adversarial.
“When she came to power, she ordered that tax authorities adopt an interest-based approach. Tax collectors and taxpayers now reach mutual agreements, which has made the system much more fair and transparent,” says Kimati. The success of these reforms is clear in the numbers.
Over the past four years, Tanzania’s tax system has become more efficient, equitable, and businessfriendly. Revenue collection has increased, compliance has improved, and the country has seen growth in both the formal and informal sectors.
As President Samia continues to refine the tax system, there is optimism that Tanzania’s fiscal health will continue to strengthen, paving the way for even more substantial economic growth.
In conclusion, President Samia Suluhu Hassan’s leadership has sparked a transformation in Tanzania’s tax system. Her administration’s efforts to improve tax collection, simplify the tax code, and foster a more investor-friendly environment have paid off.
With continued reforms and a focus on fairness, Tanzania is poised for even greater economic success in the coming years.
As the country continues to grow and attract investment, the tax system is likely to play an increasingly important role in fuelling that growth.
