Shaping Tanzania’s tax reforms via the task force

Economics

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.

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.

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.