Samia Emphasizes Tax Reform for Inclusive Economic Growth

  

The President of the United Republic of Tanzania, Dr. Samia Suluhu Hassan, has asserted that achieving the goal of building an inclusive economy that fosters rapid growth and enhances the well-being of citizens requires a robust tax payment and collection system. 

She made these remarks during the launch of the Presidential Commission for Tax Assessment and Advisory at the State House.

Dr. Samia highlighted that the commission was established in response to feedback from citizens, private sector stakeholders, and investors. 

Its primary objective is to evaluate the entire tax system, strengthen it further, and improve the business and investment environment, thereby facilitating better tax collection management in the country.

Despite the rapid growth of the economy, Dr. Samia noted that the informal sector still accounts for approximately 60% of the national economy. According to the National Bureau of Statistics (NBS), Tanzania's GDP growth rate was about 5.7% in 2022. 

However, the country faces challenges, including a poverty rate estimated at around 26% based on the 2022 Population and Housing Census. The population is approximately 61 million, which has increased the demand for social services and infrastructure.

The President emphasized the government’s commitment to creating a fair tax system that enables everyone who qualifies to pay the appropriate taxes, ensuring compliance with legal standards. She stressed the importance of having a tax system that stimulates industrial economic growth and contributes to building an inclusive economy, which, in turn, provides the government with reliable and predictable revenue sources to enhance citizen welfare.

Additionally, Dr. Samia praised the Tanzania Revenue Authority (TRA) for facilitating the country's increased revenue collection in September 2024. 

This improvement has been attributed to government efforts to strengthen revenue collection systems, empower TRA, and enhance the business environment by eliminating certain fees and improving operational efficiency within government departments, agencies, and institutions.

These initiatives have continued to yield positive results, leading to an increase in tax revenue and voluntary compliance among taxpayers.

However, according to data from the IMF and World Bank, Tanzania faces several challenges, including high poverty rates and increasing public debt, which can hinder economic growth. 

The IMF has indicated that the country's economic development is at risk due to these factors and climate change impacts.