By The Respondents Reporter
For any government, development ambitions are only as strong as the resources available to finance them. Roads, schools, hospitals, water projects, electricity infrastructure and industrial investments all require reliable funding, much of which comes from taxes collected from citizens and businesses.
This reality places the Tanzania Revenue Authority (TRA) at the centre of the country's development agenda. For three decades, the authority has served as the government's principal revenue collector, mobilising resources needed to support public services and national development.
As TRA marks its 30th anniversary, one of the institution's most significant achievements has not only been the growth in revenue collection but also the transformation of its relationship with taxpayers.
Under President Samia Suluhu Hassan's administration, a deliberate shift in tax administration has helped replace mistrust with cooperation, creating a more conducive environment for business while strengthening government revenues.
When President Samia assumed office in March 2021, she inherited an economy still recovering from the effects of the Covid-19 pandemic and a business community that had, for years, voiced concerns over tax enforcement practices.
Many traders and entrepreneurs complained about aggressive collection methods, business closures and tax assessments they considered unrealistic.
Recognising the need to balance revenue mobilisation with economic growth, President Samia moved early to redefine the government's approach.
During the swearing-in ceremony of permanent secretaries and their deputies on April 6, 2021, she delivered a message that would shape the future direction of tax administration in Tanzania.
The President cautioned against the use of force in tax collection, arguing that coercive approaches could undermine the very objective they sought to achieve.
She noted that some enforcement mechanisms were creating fear among taxpayers and forcing businesses to suspend operations.
Her position was clear: Tanzania needed higher revenues, but not at the expense of business sustainability.
The message reflected a broader policy philosophy that views taxpayers not as adversaries but as essential partners in national development.
After all, every tax shilling collected originates from economic activity generated by businesses, workers and investors.
If businesses thrive, government revenues increase. If businesses struggle or close, both taxpayers and the state lose.
This understanding laid the foundation for a series of administrative changes within TRA aimed at improving taxpayer engagement and voluntary compliance.
Historically, disputes between taxpayers and the revenue authority often stemmed from disagreements over tax assessments and enforcement actions.
Business owners frequently argued that some tax estimates did not accurately reflect the scale of their operations, while others expressed frustration over penalties and closures resulting from delayed payments.
Such experiences contributed to an environment characterised by suspicion and tension.
Under the Sixth Phase Government, however, TRA was encouraged to embrace dialogue and consultation as key tools of revenue administration.
Rather than immediately resorting to punitive measures, taxpayers facing difficulties were increasingly provided opportunities to engage with the authority and negotiate payment arrangements.
The underlying principle was practical. Closing a business may appear to solve an immediate compliance problem, but it often eliminates the taxpayer's ability to generate income and settle outstanding obligations.
A functioning business, on the other hand, remains capable of paying taxes, creating jobs and contributing to economic growth.
The policy shift also aligned with broader efforts to improve Tanzania's business and investment climate.
By reducing friction between taxpayers and the tax authority, the government sought to encourage formalisation, expand the tax base and strengthen voluntary compliance.
The results have been reflected not only in improved taxpayer relations but also in revenue performance.
Over the past five years, TRA has consistently recorded growth in domestic revenue collections, demonstrating that cooperative tax administration can coexist with strong fiscal outcomes.
In March 2026, for example, the authority collected Sh3.58 trillion, one of the strongest monthly performances in its history. Such achievements have enhanced the government's ability to finance development programmes without excessive reliance on external borrowing.
The growing contribution of domestic resources is also evident in the 2026/27 national budget, where 74.2 percent of expenditure is expected to be financed through internal revenue sources.
This trend reflects the increasing effectiveness of revenue mobilisation efforts and the expanding confidence of taxpayers in the system.
Credit for this transformation extends beyond policy direction. TRA's leadership, under Commissioner General Yusuph Mwenda, has played a crucial role in implementing reforms aimed at improving taxpayer services, strengthening compliance mechanisms and fostering a culture of engagement rather than confrontation.
While challenges remain, particularly in expanding the tax base and addressing the informal sector, the progress achieved over the past five years suggests that a more balanced approach to taxation is yielding positive results.
As TRA celebrates 30 years of existence, its experience offers an important lesson for revenue authorities across developing economies: sustainable tax collection is built not through fear, but through trust.
The authority's evolution from an institution often perceived as an enforcer to one increasingly viewed as a development partner represents a significant shift in Tanzania's fiscal landscape.
For taxpayers, the change has created greater confidence in the system. For government, it has generated stronger and more sustainable revenue streams.
And for the country, it has reinforced the principle that development is most effective when citizens and institutions work towards a shared goal.
Three decades after its establishment, TRA's story is therefore not merely about tax collection. It is also about the gradual construction of a relationship in which taxpayers and the state increasingly recognise their mutual dependence in driving Tanzania's economic transformation.
