A national identification project, which anticipated to help Tanzania Revenue Authority (TRA) to expand revenue base and reduce tax leakages, modernisation of the taxation system and capacity building are some of the measures to be instituted to enhance the revenue harvest.

It is expected that, TRA would be able to collect nearly Tsh19 trillion  ($11.875 billion) a year by 2018, equivalent to 19.9 percent of GDP, up from the current Tsh 10.4 trillion  ($6 billion) annually, representing a 17 percent of GDP.

Boosted revenue from $400 million in 1996 now up to $6 billion, for example, has helped to reduce Tanzania’s donor dependency from as high as 54 percent to less than 10 percent in this year’s budget.

Finance Minister, Ms Saada Mkuya says reaching a revenue target is a matter of life and death, as the country earnestly intends to ease its reliance on foreign aids.

 “Besides the EFDs, we are now refining our business environment to draw massive investments that can spawn revenue, rather than depending on donors handout.” Ms Mkuya explains.

Certainly, the country has put into place a number of incentives and tax breaks for foreign investors, who, for instance, are permitted to bring in necessary equipment free of duty. 

Mineral exporters get a reimbursement on all the VAT paid in the country, while companies that operate in an export-processing zone (EPZ) enjoy a ten-year exemption from corporate tax, which currently stands at 30 percent.

As a result, recent data from the United Nations Conference on Trade and Development (UNCTAD) indicates, in 2013 Tanzania had $12.7 billion in foreign direct investment (FDI) stock, eclipsing both Kenya and Uganda, which stood at a low $3.4 billion and  $8.8 billion respectively.

UNCTAD statistics also reveal that in 2013, Tanzania attracted $1.9 billion in FDI inflows far outstripping Kenya, which only received $514 million of inflows in the same period.

Executive Director of Tanzania Investment Centre (TIC) Juliet Kairuki says that the latest figures demonstrate the success of the government’s investment policies and measures to make Tanzania an even more attractive destination.

The small trade, the super rich and multinational companies shifting profits to tax havens are on the TRA’s hit list for the years ahead.

The amount Tanzania loses annually to trade misinvoicing or over invoicing is astounding. An international taxation researcher Ms Rhiannon McCluskey, estimates that on average $248 million worth of capital has been extracted out of Tanzania per year using this process over the past decade. 

Mr Bade says that the target will be realized by improving efficiency in tax administration and broadening the tax net in order to collect more revenue particularly from lucrative sectors of mining, oil and gas, telecommunication, tourism, construction, real estate, financial industry, high net worth individuals and incomes from the informal sector.