TRA’s 30-year blueprint to drive one trillion-dollar economy

DAR ES SALAAM: THREE decades ago, Tanzania’s tax administration struggled to generate enough revenue to finance the country’s development agenda, collecting an average of just 24.5bn/- a month through three separate departments under the Ministry of Finance.

Today, the Tanzania Revenue Authority (TRA) mobilises nearly 3tri/- every month from more than 8.4 million taxpayers, a transformation that has placed domestic revenue at the centre of financing roads, hospitals, schools and other strategic investments.

However, as President Samia Suluhu Hassan steers Tanzania towards becoming a one-trillion-US-dollar economy under Vision 2050, the authority says sustaining that ambition will require more than higher tax collections. It will demand a fundamental transformation in the way taxes are administered, businesses are supported and the informal economy is integrated into the formal sector.

Against this backdrop, TRA has unveiled an ambitious 30-year roadmap aimed at building a technologydriven, business-friendly and intelligence-led tax administration capable of financing the country’s next phase of economic growth.

The strategy was unveiled yesterday by TRA Commissioner General Yusuph Mwenda during a meeting with editors ahead of the authority’s 30th anniversary celebrations and the inaugural Presidential Outstanding Taxpayer Awards, both scheduled tomorrow.

Rather than focusing solely on increasing revenue collections, Commissioner Mwenda said TRA’s next chapter will prioritise expanding the tax base, embracing full automation, tracking financial transactions, reducing compliance costs and facilitating business growth, so that government revenue rises alongside economic expansion.

“As the country develops, it requires more financial resources. Revenue collections must continue increasing because the needs of the economy will also continue growing,” Commissioner Mwenda said.

“Our responsibility over the next 30 years is to build a tax administration that supports Tanzania’s Vision 2050 and enables the country to achieve its long-term economic ambitions.” His remarks signal a strategic shift in TRA’s role, from being primarily a tax collector to becoming an institution that actively supports economic transformation.

He said the authority’s journey over the past three decades demonstrates the impact of institutional reforms on domestic resource mobilisation.

When TRA was established on July 1, 1996, it inherited a fragmented tax system administered through separate Customs, Sales Tax and Income Tax departments.

Within a year, monthly revenue collections increased from 24.5bn/- to 44.3bn/-. Today, average monthly collections stand at nearly 3tri/-, reflecting what Mr Mwenda described as growing taxpayer confidence and stronger voluntary compliance.

Despite the progress, Commissioner Mwenda argued that Tanzania’s development ambitions require a different approach over the next three decades. Central to that strategy is broadening the tax base.

Although the number of registered taxpayers has increased from 75,000 when TRA was established to about 8.4 million today, Tanzania’s labour force stands at approximately 34.5 million people, suggesting that millions of potential taxpayers remain outside the formal tax system.

“We have come a long way, but we still have a long journey ahead. Expanding the number of taxpayers remains one of our biggest priorities,” he said.

However, he stressed that expanding the tax base involves more than simply registering additional taxpayers. “The tax base expands in two ways: by increasing the number of taxpayers and by enabling existing businesses to grow. Both are equally important,” he explained.

The philosophy reflects the government’s broader commitment to creating an environment in which businesses thrive, recognising that stronger businesses ultimately generate higher tax revenues.

“TRA cannot exist without businesses. When businesses grow, government revenue also grows,” Mr Mwenda noted.

Consequently, formalising businesses operating outside the official economy will become one of TRA’s defining priorities over the next 30 years.

According to him, many enterprises continue to operate informally, limiting government revenue while creating unfair competition for compliant businesses.

He also said measures of promoting greater use of digital payments instead of cash transactions are intended to formalise commercial activities and improve transparency across the economy.

Formalisation, he said, is expected not only to increase tax collections but also to create a more competitive and inclusive business environment.

The commissioner added that increasing Tanzania’s tax-to-GDP ratio beyond 18 per cent will be essential if domestic revenue is to keep pace with the country’s development ambitions.

Equally significant is TRA’s decision to make technology the foundation of future tax administration.

Mr Mwenda revealed that the authority plans to fully automate its systems, enabling tax officials to monitor business activity in real time with minimal manual intervention.

“Our vision is to reach a point where, before a taxpayer files a return, the system already knows the income earned and the tax payable,” he said.

“I should be able to sit at a dashboard and see economic activity taking place across the country. That is where we are heading.”

He described the initiative as part of TRA’s commitment to “follow the money”, allowing the authority to track financial transactions more efficiently, while reducing unnecessary interaction between taxpayers and tax officials.

Automation, he added, will also reduce compliance costs, enabling businesses to spend more time investing and creating jobs rather than navigating administrative procedures.

“We do not want taxpayers spending most of their time visiting TRA offices. We want them to focus on growing their businesses, while technology makes tax administration simpler and more efficient,” he said.

The authority also plans to simplify tax filing procedures as automation advances, reducing paperwork and creating a system that encourages voluntary compliance rather than imposing unnecessary burdens.

Alongside automation, TRA is placing greater emphasis on the digital economy, recognising the rapid evolution of global commerce.

Mr Mwenda said digital platforms have fundamentally changed business models, making it necessary for tax administration to evolve accordingly.

He revealed that the digital economy generated more than 115.5bn/- in tax revenue between the 2022/23 and 2025/26 financial years from 192 companies, highlighting the sector’s growing contribution to government revenue.