This paper reviews the tax system in Tanzania, and gives particular attention to the tax reform proposals presented in the Report of the Presidential Commission on Taxation. In considering the effects of the "low-rate, broad-base" tax reform strategy that has been adopted, it is argued that there are major shortcomings in the implementation of the tax reform. This particularly relates to the continuous and widespread tax evasion, extensive tax exemptions and inefficient tax administration. The discussion in this paper reinforces the arguments for improving the quantitative analysis of revenue policy, and taking more specific and focused measures to improve tax administration.

Odd-Helge Fjeldstad

Research Professor, Coordinator: Tax and Public Finance