The Tanzania Revenue Authority (TRA) has adopted a more conciliatory approach to tax collection, allowing businesses with outstanding tax debts to continue operating as they repay their liabilities, in a shift aimed at protecting livelihoods while safeguarding government revenue.
The approach seeks to address concerns that closing businesses over unpaid taxes can deprive traders of the income they need to settle their debts, potentially hurting both enterprises and the government’s revenue collection efforts.
The change follows directives by President Samia Suluhu Hassan prohibiting the use of task forces in tax collection and the closure of businesses as an enforcement measure.
TRA Commissioner General Yusuph Mwenda has reiterated the authority’s commitment to helping businesses comply with tax requirements without unnecessarily disrupting their operations.
During a working visit to Kilombero District in Morogoro Region on October 19, 2026, Mr Mwenda assured traders that failure to pay taxes would not automatically lead to the closure of their businesses.
“I want to assure traders that no business will be closed because an entrepreneur has failed to pay taxes. The entrepreneur will continue operating while paying taxes,” he said.
The approach allows eligible taxpayers to continue generating income while making arrangements to clear their outstanding tax obligations, including through instalment payments.
For small businesses, which often operate on tight cash flows, the ability to remain open can be critical to retaining customers, paying workers, meeting operating costs and maintaining household incomes.
It could also help protect the government’s long-term revenue base by enabling businesses to remain economically active rather than lose their capacity to pay taxes after being shut down.
In an opinion article, Dr Reubeni Lumbagala argues that the change reflects an effort to balance the interests of the government and taxpayers, allowing the government to collect revenue while entrepreneurs continue with their economic activities.
Previously, the closure of businesses over unpaid taxes attracted complaints from taxpayers who argued that the measure undermined their ability to recover financially and settle the amounts owed to TRA.
The new approach places greater emphasis on keeping businesses operational while ensuring that tax obligations are met.
Mr Mwenda said TRA would also continue providing tax education to traders in Kilombero to improve their understanding of tax requirements and support compliance.
Tax education is particularly important for small traders, some of whom may need assistance understanding their filing obligations, payment procedures and the consequences of failing to comply with tax laws.
However, allowing businesses to continue operating should not be interpreted as a cancellation of outstanding tax liabilities.
Taxpayers remain responsible for meeting their obligations, while the authority must ensure that agreed payment arrangements are honoured.
The effectiveness of the approach will depend on transparent procedures for negotiating repayment plans, consistent treatment of taxpayers and effective follow-up to ensure that debts are recovered.
For the government, the balance is between enforcing tax laws and preserving the economic activity that generates revenue.
For businesses, continued operations provide an opportunity to recover financially and settle debts without losing their sources of income.
The shift therefore places the focus on a practical question for tax administration: how to collect what is owed without undermining the businesses expected to pay it.