President Dr.Samia launches major Tax Reforms to drive economic growth

DAR-The President of Tanzania, Samia Suluhu Hassan, has officially launched a major transformation of the country’s tax system, signaling a shift toward a modern, service-oriented model aimed at improving efficiency and economic growth.

The move follows the submission of a report by the Presidential Commission on Tax Reforms, which the President received at State House in Dar es Salaam.

The reforms are intended to address longstanding concerns raised by citizens, business leaders, investors, and development partners regarding the effectiveness and fairness of the current tax system.

Speaking during the event, President Samia emphasized that the establishment of the Commission was necessary to conduct a comprehensive review of the tax framework.

She noted that nearly 35 years have passed since the last major review by the Mtei Commission, highlighting the urgency of updating the system to reflect today’s economic realities.

The President positioned the reforms as a key pillar in Tanzania’s long-term development strategy, stressing their importance in achieving the country’s Vision 2050 goals.

She explained that successful implementation of the vision will depend on contributions from multiple sectors: 22 percent from public revenue, 70 percent from the private sector, and 8 percent from public institutions.

“The private sector must be enabled,” President Samia stated, underscoring the need to create a supportive environment for businesses to thrive.

She also commended the Tanzania Revenue Authority (TRA), along with other institutions and citizens, for their role in strengthening domestic revenue collection through voluntary compliance.

At the same time, she called for increased participation in the formal economy to unlock untapped revenue potential.

President Samia signalled a decisive shift in approach, affirming the Government's commitment to act on the Commission’s recommendations, stating, “I have listened carefully to the Commission's 284 recommendations. We will implement them.”

She added that a structured implementation plan covering the short, medium and long term will be developed in consultation with key stakeholders.

Underscoring the scale and urgency of the transformation, the President stated “Despite the challenges in the tax system, change is necessary and important. Even a snake sheds its skin. We too must change.”

She emphasized that the reforms will steer Tanzania toward a tax system that is fair, stable and predictable, clearly understood by both taxpayers and administrators, supportive of business growth, and capable of sustaining increased domestic revenue.

The Government aims to raise the tax-to-GDP ratio to 18 percent as part of this transformation.

Presenting the report, the Chairperson of the Commission, Ambassador Ombeni Sefue, said the Commission was guided by the need to design a tax system aligned with citizens’ expectations and evolving economic realities.

He emphasized that, “We must have a tax system that broadens the tax base and ensures that everyone contributes according to their income in a manner that is simple, transparent, fair and equitable.”

He noted that the Commission identified systemic challenges, including high tax burdens in certain areas, weak dispute resolution mechanisms, fragmented institutional coordination, and a narrow tax base.

He cautioned that, without major reforms, Tanzania will continue collecting taxes from a few people, often in a burdensome manner.

Ambassador Sefue further highlighted the need to balance revenue mobilisation with economic growth, stating that, “We cannot harvest without planting; nor can we milk cows without feeding them,” underscoring the importance of a tax system that supports investment, enterprise growth, and long-term sustainability.

According to the Commission, full implementation of the recommendations could increase Government revenue by TZS 11.025 trillion within three years and raise the tax-to-GDP ratio to 18 percent.

President Samia concluded by calling for coordinated action across Government, the private sector and citizens, noting that successful implementation will depend on collective commitment to reform and a shared vision for a modern, efficient and service-oriented tax system.

The government confirmed that the reforms will be implemented in phases, with consultations involving key stakeholders to ensure a smooth and inclusive transition.