Shaping Tanzania’s tax reforms via the task force

Shaping Tanzania’s tax reforms via the task force

What you need to know:

  • In order to have a good tax system that is friendly to both tax payers and the government, participatory taxation is very important.

Governments do provide some public goods and services. They include education, health, water, infrastructure, security and public administration. The cost drivers in such provisioning must be paid for by the government. Tax revenues constitute the greatest portion of own sources of funds for a country like Tanzania in funding public goods and services. They contribute in making a country more free from loans and aid and their negative implications. Funding of public goods and services by own tax revenue is important in tax payers holding the governments more responsible and accountable to them as opposed to being more accountable to donors than citizens. Among the strategies of attaining tax objectives include participatory taxation.

Participatory taxation

In order to have a good tax system that is friendly to both tax payers and the government, participatory taxation is very important.

Participatory taxation allows major tax stakeholders to engage in public dialogue, to inform, influence, shape, move and shake the tax agenda in the country’s fiscal policy and its instruments. Participatory taxation is an opportunity for stakeholders to give their inputs in forms of views, opinions, complaints and most importantly recommendations for improvements. Research will show that participatory approaches in development undertakings increases chances of success. This is because participatory approaches is very important for ownership, endorsement, support and eventually success of interventions in question. It can be costly in terms of time and money but all the costly are worth the benefits if well undertaken. Among the strategies of attaining participatory taxation is through tax task force.

Tax Task Force

Tax Task Force on tax reform is a special group of tax multi-stakeholders coordinated by a secretariat at the Ministry of Finance and Planning.

It is composed of tax stakeholders from various walks of life. Through the appropriate authority, the task force invites tax stakeholders to submit their tax issues as inputs in reforming tax space in a particular fiscal year.

Normally, the Principal Secretary Treasury invites stakeholders to participate in the proceedings of the task force on tax reform in preparation for budget for the next fiscal year. Stakeholders are normally required to submit their written inputs by a given deadline around February and March.

Issues for tax force

Corporate chiefs who are captains and titans of the industry in Tanzania have a number of tax issues they have wanted to communicate to the authorities in their bid to shape the country’s tax reform measures.

These are issues that can be brought to the attention of the tax task force.

Typical tax issues of concern in Tanzanian context include various measures to broaden the rather narrow tax base, multiplicity of taxes, high tax rates and implications for business competitiveness and on disposable incomes to consumers, predictability and stability of the fiscal policy and its instruments especially in the medium to long term, long time taken for tax refunds, handling of tax objections and appeal issues, complications in paying taxes including one stop centre for tax payment, informal sector taxation, tax collection techniques including issues on Electronic Fiscal Devices (EFDs), tax estimation issues, tax man’s understanding of sector-specific tax issues such as construction sector tax issues, tax evasion and economic justice issues etc. If well addressed all of the above stand to increase the government revenue from taxation.

Who can participate

There is a wide range of tax stakeholders that can participate in giving inputs to the tax task force in Tanzania.

They include but are not limited to associations such as Tanzania Private Sector Foundation (TPSF), other individual and corporate stakeholders from specific sectors such as mining, tourism, insurance, stock market, transport, clearing and forwarding, aviation, etc. They also include religious groups, academicians, researchers and consultants among others. Indeed the litany above is not exhaustive.

Ways forward

Participating in shaping the tax space through giving inputs on tax reforms with the aim of improving the country’s tax revenue is very important.

The tax task force on tax reform is among the avenues through which this can be done.

It is very important for tax stakeholders to seize the opportunity and make most out of it. Short of that, it will be a lost opportunity. The task force on its side has to make itself more known to all kinds of tax stakeholders and ensure that issues raised are worked on accordingly.