BY MBONEKO MUNYAGA
Recommendations to widen the tax base and modernise collection systems aim to strengthen the economy
While sweeping tax reform proposals submitted to President Samia Suluhu Hassan recently promise to reshape Tanzania’s fiscal landscape, awareness among ordinary citizens remains strikingly low, raising questions about public engagement in one of the country’s most ambitious policy shifts in decades.
On the streets of Arusha, a hawker who identified himself only as Juma admitted he had never heard of the recommendations presented by the presidential task force chaired by Amb Ombeni Sefue.
“I just wake up and hustle,” he said. “Taxes are something we hear about, but no one explains them to us.”
The task force recently proposed wide-ranging changes, including expanding the tax base beyond a narrow pool of large taxpayers by introducing lower, more inclusive taxation aimed at bringing informal sector operators into the formal economy.
However, analysts say the silence from citizens like Juma reflects a deeper disconnect between policy formulation and everyday realities.
Sociologist Deus Naluyaga of Mwanza said public indifference was not surprising in a country where many people are focused on survival.
“People who are struggling to make ends meet rarely engage with fiscal policy discussions, even when those policies directly affect them,” he said. “High taxes have become something they simply endure.”
He added that the bigger issue was the limited involvement of citizens in shaping such policies.
“The worst part is that people are not meaningfully consulted. They adapt to a system that offers little room for feedback or accountability,” Naluyaga said.
He argued that ordinary citizens may, in practice, bear a heavier tax burden than large corporations, pointing to consumption taxes.
“Take something as basic as bread. Why should it attract 18 per cent VAT as if eating is a commercial activity?” he asked.
Drawing comparisons with Europe, Naluyaga cited Switzerland, where he studied, noting that while the standard VAT rate is about 8.1 per cent, essential goods such as food, books and medicines are taxed at a much lower rate of around 2.6 per cent.
“In Tanzania, the rate is largely uniform across goods and services, which places pressure on low-income households,” he said.
Naluyaga also raised concerns about public spending, questioning whether taxpayers were seeing value for money.
“It is difficult to justify high taxes when public expenditure appears disconnected from the realities of ordinary citizens,” he said.
Meanwhile, experts have cautioned that some of the proposed reforms, particularly the shift towards a fully digital tax system, must be implemented carefully.
Cybersecurity expert Ibrahim Sultan said digitalisation could improve efficiency and transparency but warned of potential risks if systems are not secure.
“A paperless and faceless tax system can work but only if it guarantees confidentiality, integrity and authenticity of data,” he told The Arusha News by phone. “It must also be resilient and always available. Otherwise, trust will be compromised.”
The proposed reforms emphasise digital transformation, with plans to streamline tax administration and reduce direct interaction between taxpayers and officials.
Stakeholders have welcomed some of the incentives outlined in the proposals, including a one-year tax holiday for startups, saying it could encourage innovation and business growth.
“To truly broaden the tax base, the government must also invest in startups and support their growth,” one stakeholder said.
Chairman of Arusha-Chapter of the National Chamber of Commerce, Industries and Agriculture (NCCIA), Mr Walter Maeda, said the proposed reforms were a step in the right direction but stressed that consistency and consultation would be key to success.
“A broader tax base with fairer rates can stimulate business growth but reforms must be predictable and shaped with input from the private sector to build confidence,” noted Walter Maeda, the chamber chairperson.
“I welcome the proposed tax reforms as an important step toward a more efficient and growth-oriented tax system. At the same time, reform must remain grounded in fairness. Businesses, especially SMEs, need a system that is predictable, transparent and affordable to comply with. My view is that the real measure of success will not be higher collections alone, but whether the reforms reduce unnecessary burdens, support formalisation, and create a tax environment where businesses can grow, invest and contribute sustainably to the national economy,” Said Emmanuel Stephano Kusimul, a tax consultant and founder of Softa, a computer accounting software.
As debate around the reforms grows, attention is increasingly shifting to how the proposals will be implemented and whether they will address longstanding concerns about fairness, transparency and inclusivity.
For many Tanzanians, the question remains not just about how taxes are collected, but whether their voices will finally be heard in the process.
