Dar es Salaam. In a striking demonstration of fiscal discipline and strategic management, the Tanzania Revenue Authority (TRA) has achieved remarkable results in tax collection.
Between July and December of the previous fiscal year, the TRA collected TZS 16.5 trillion, achieving a success rate of 104.6 percent, the taxman announced on Wednesday.
This performance has set a confident tone as the taxman embarks on an ambitious target of Sh30.04 trillion for the 2024/25 financial year, having already reached 55 percent of this goal.
A Strong start: Key insights
Economists who spoke to The BizLens on Thursday are buoyant about the TRA’s trajectory.
Prof Abel Kinyondo from the University of Dar es Salaam highlighted that the remaining tax burden is manageable if the current collection trend continues.
However, he stressed that the real test lies in effective revenue management, a commitment that the government has repeatedly pledged to embrace.
“Every single cent must be utilized as planned, if TRA’s efforts to meet or surpass the target are to have real impact,” he cautioned.
This emphasis on accountability aligns with a broader expectation that revenue generation must translate into tangible benefits for the populace.
Ensuring that collected taxes are effectively allocated to public services and infrastructure will be critical for maintaining public trust and enhancing compliance.
Leveraging technology for efficiency
Another critical aspect of the TRA’s strategy is the integration of Information and Communication Technology (ICT) in tax collection.
Dr Lutengano Mwinuka from the University of Dodoma emphasized the importance of customizing ICT solutions for various revenue streams to streamline management.
“Adopting technology can significantly reduce inefficiencies and improve compliance rates,” he stated, reflecting a growing consensus on the role of digitalization in modern governance.
Dr Daud Ndaki from Mzumbe University echoed this sentiment, noting that with increased tax compliance and a robust economic landscape, the TRA is well-positioned not only to meet but to exceed its targets.
His optimism underscores the necessity of adopting innovative practices to keep pace with an evolving economic environment.
Economic context: A backdrop of growth
Mr Yusuph Mwenda, the TRA Commissioner General, attributed the success to enhanced relationships with taxpayers and improved staff professionalism.
He noted a significant 18 percent year-on-year increase in collections, from Sh13.9 trillion to the current figures, highlighting that recent administrative reforms under President Dr Samia Suluhu Hassan have played a crucial role in this turnaround.
The integration of systems, coupled with the growth of economic activities—especially the uptick in goods flowing through ports—has significantly contributed to the surge in tax revenue.
The involvement of private sector partners like DP World has further strengthened the logistics framework, promoting smoother tax collection processes.
The road ahead: Challenges and opportunities
Looking ahead, the TRA faces the challenge of collecting Sh13.54 trillion over the next six months, averaging Sh2.26 trillion monthly.
While this may appear daunting, the TRA’s strong December performance, where it collected Sh3.587 trillion against a target of Sh3.465 trillion, provides a solid foundation.
However, the authority must continue to address tax evasion.
Mr Mwenda’s call for compliance is crucial; increasing awareness and implementing effective educational campaigns will be key strategies in this regard.
The TRA has committed to utilizing investigative tools to identify and penalize tax evaders, reinforcing a culture of accountability.
A collaborative future
The TRA’s achievements represent more than just numbers; they signify a renewed commitment to responsible fiscal management and national development.
The collaborative efforts between the TRA, taxpayers, and governmental leadership are pivotal in creating a sustainable economic environment.
As the TRA continues on its upward trajectory, the eyes of the nation will be on its ability to not only meet, but to exceed its ambitious targets, transforming revenue collection into a cornerstone of Tanzania’s economic growth narrative.
For those invested in Tanzania’s economic future, the story of the TRA is one worth following closely.
