Tanzania's Budget 2026/27: Vision 2050 demands reciprocal tax accountability

Tanzania aspires to be in theone of the top three most attractive business environments on the continent. If that is the case, it must address what business leaders consistently report as their top-most concern, tax predictability. One critical element of predictability is mutual accountability. 

Accountability, simply put, is meant to assure that all parties operate within the bounds of law, fairness, and transparency. And in cases, of non-compliance, the party that does meet legal requirement is held to task. In practice, however, this accountability appears unevenly applied. Taxpayers are subject to rigorous scrutiny, audits, penalties, interest, and strict filing obligations that demand compliance with precision.

In contrast, the accountability of tax administrators, while formally embedded in legal and institutional frameworks, rarely manifests with the same immediacy or consequence. The result is a system that functions less as a balanced mechanism of mutual responsibility and more as a single-edged sword, cutting sharply against taxpayers while leaving administrative conduct comparatively insulated. This imbalance raises an important question: is accountability in tax administration truly reciprocal, or has it evolved into a one-sided burden?

Over the past few years, we have witnessed various provisions of tax law being introduced with the intention of ensuring that accountability is maintained for both the Tanzania Revenue Authority (TRA) and taxpayers. However, the application of such laws has not been effective in achieving this goal.

For example, in 2020, a six-month timeline was introduced for determining objections against tax decisions. In an environment where both parties are held accountable, one would expect that if the TRA fails to determine an objection within this period, the case would be closed in accordance with the objection, thus holding the TRA accountable for failing to comply with the law. However, the law was subsequently amended to state that if the six months lapse without a determination, the assessment is confirmed and the taxpayer must proceed with an appeal. In simple terms, the objection is considered determined in favour of the TRA. This is a biased position that provides no incentive for the TRA to address cases promptly, as even in the event of failure, they remain protected.

Similarly, for years, the Value Added Tax Act has required the Commissioner to make a decision on VAT refund applications and inform the applicant within 90 days of receiving the application. This timeline was further reduced to 30 days from January 2026. Despite these clear legal requirements, it is rare for the TRA to decide on VAT refund claims within the stipulated timeline. These delays often go unchecked, and taxpayers are not compensated for the delay in receiving payments or even a decision on their claims. On the other hand, when a taxpayer delays payment of taxes, interest for late payment is imposed immediately, and the taxpayer is held accountable. Shouldn’t the same standard apply to the TRA?

On matters of tax refunds, Section 84 of the Tax Administration Act requires the Commissioner to pay interest on such refund amounts due to taxpayers. While this provision appears to create an equal environment from a legal perspective, it has not been enforced in practice. Payment of interest on delayed refunds is not merely a financial obligation, but a cornerstone of equity and good governance. The lack of implementation of this provision further highlights the gap between the law and its application, reinforcing the perception of asymmetrical accountability.

Additionally, for a taxpayer’s objection against a tax decision to be admitted, they are required to deposit one third of the assessed tax, or the tax not in dispute, whichever is greater, before submitting the objection. If the objection is determined in favour of the taxpayer at the TRA level, or if a subsequent appeal is ruled in their favour, the deposit becomes repayable. One would expect this amount to be repaid with interest to compensate for the opportunity cost of the funds held by the TRA, but this is not the case. Moreover, the process of obtaining a refund is often prolonged, even after the courts have ruled in favour of the taxpayer.

These are just a few examples where accountability in tax administration is unbalanced, with taxpayers consistently held to account while tax administrators remain largely unchecked. In an economy striving to create an investor-friendly environment, fairness and effectiveness in taxation are vital.  A balanced system, where both parties are treated equitably reinforces the legitimacy of the tax regime.

As we enter a season of changes to tax laws, the business community hopes for reforms that will enhance accountability in tax administration, thereby improving the business environment and supporting the achievement of Vision 2050 growth ambitions.

Waziri Jumanne is a Tax Senior Manager with Deloitte Consulting Limited. The views presented are his own and not necessarily those of Deloitte. He can be reached at wjumanne@deloitte.co.tz.