MWE Correspondent
Tanzania has transformed its tax administration over the past three decades, expanding the number of registered taxpayers from just 75 at the establishment of the Tanzania Revenue Authority (TRA) in 1996 to 8.4 million today, a milestone that reflects the country’s growing formal economy and strengthening domestic revenue collection.
The remarkable growth was highlighted by TRA Commissioner General Yusuph Mwenda, who said the authority now collects an average of Sh3 trillion in revenue every month—an extraordinary increase from approximately Sh24 billion per month and Sh296 billion annually before the creation of the revenue authority.
The figures illustrate the scale of Tanzania’s fiscal transformation as the government increasingly relies on domestic revenue to finance infrastructure, healthcare, education and other public services while reducing dependence on external financing.
Despite the significant progress, Mwenda said Tanzania’s tax system still has substantial room for expansion.
With the country’s population now exceeding 60 million and an estimated labour force of between 34 million and 35 million people, he argued that the country’s greatest opportunity lies not in increasing tax rates but in broadening the tax base by bringing more individuals and businesses into the formal economy.
“The priority is to continue growing businesses and increase the number of taxpayers in the formal system,” Mwenda said, emphasizing that sustainable revenue growth depends on economic expansion rather than placing additional tax burdens on existing taxpayers.
His remarks reflect a broader shift in Tanzania’s fiscal strategy, where policymakers are increasingly focusing on formalisation, entrepreneurship and business development as long-term drivers of government revenue.
Economists generally view a broader tax base as a sign of a maturing economy because it distributes the responsibility of financing public services across a larger number of taxpayers while reducing dependence on a relatively small group of businesses and individuals.
Formalising businesses also provides broader economic benefits beyond taxation. Registered enterprises typically gain improved access to finance, government procurement opportunities, legal protections and investment capital, strengthening overall economic productivity.
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The rapid increase in taxpayer registration also reflects Tanzania’s efforts to modernise tax administration through digital technologies, improved taxpayer services and reforms designed to simplify compliance while strengthening revenue collection.
The country’s expanding domestic revenue has become increasingly important as Tanzania pursues ambitious investments in transport infrastructure, energy projects, industrialisation and social services aimed at sustaining long-term economic growth.
Analysts note that maintaining revenue growth will ultimately depend on continued private-sector expansion, job creation and the successful integration of informal businesses into the formal economy.
As Tanzania’s economy continues to evolve, tax administration is expected to play an increasingly important role in supporting fiscal stability and financing the country’s development agenda.
For one of East Africa’s fastest-growing economies, the journey from just 75 registered taxpayers to 8.4 million represents more than a statistical achievement. It reflects a profound transformation in how the state mobilises domestic resources and lays the financial foundation for future economic development.
