• Tanzania tax compliance key to growing domestic revenue. 
  • TRA launches initiative to increase compliance.
  • AI adoption poised to firm up tax compliance systems.

As the drive to increase revenue collections intensifies, tax authorities in Tanzania have been urged to embrace emerging technologies including Artificial Intelligence (AI), to enhance efficiency in sealing leaks and annihilating evaders.

For years, officers from the which Tanzania Revenue Authority (TRA) have battled tax evaders, individuals and businesses who keep under declaring their duty obligations while also bursting bold tax avoidance schemes involving cross-border businesses.

A recent report by advisory firm Pricewaterhouse Coopers (PwC), however, suggests that the use of AI and new technologies in the country can see players easily compute VAT, withholding tax, corporate income tax and other tax liabilities in almost no time.

“Technology is growing at its highest speed, revolutionising business models as well as the behaviours of today’s tech-savvy consumers,” reads a report by PwC on Tanzania tax compliance.

“Business organisations also need to consider how technology solutions best enable them to meet their tax compliance obligations. Imagine having a tool to compute your taxes just by uploading a trial balance, or having a software connected to the TRA systems that is able to submit your tax returns at the click of a button,” PwC report observes, noting that: “this is the future of tax compliance.”

At the moment, tax authorities in the country are grappling with an avalanche of compliance challenges, which keep weakening the government’s resolve to meet ambitious collection targets.

Tax avoidance on industrial scale in Tanzania

Just recently, TRA in Kagera Regional office conducted a raid, busting a scheme involving the massive trade in unregistered alcoholic spirits packed in 100ml, 125ml, and 200ml bottles.

TRA said the tax evasion scheme involved the players in the market, who often skirt “proper registration, licensing, or affixation of Electronic Tax Stamps (ETS)” on alcoholic beverages.

Authorities noted that approximately 25,433 bottles were seized in February 2025 during this sting operation led by Kagera Regional Manager Castro John in collaboration with Karagwe District Manager, Mr William Mneney.

“At that time, tax evasion suspects were arraigned at the Resident Magistrate’s Court of Bukoba on charges of violating the Excise Duty Act,” John told the while exposing the suspects: Mwesiga Reopard Rupia, Nelius Kaizelege Mwami, Julieth Ishengoma Kisheni and Mlokozi Egibert Emely.

In the face of such tax avoidance schemes cutting across industries, audit firm PwC notes that through “greater adoption of technology,” Tanzania would “facilitate tax filings and payments.”

Additionally, industry-wide adoption of emerging technologies “will always have a positive impact on a country’s overall ranking as it will reduce the time to comply with the tax filing and payment obligations,” the PwC report states.

Tanzania was ranked 165 (prior year 167) in the “Paying Taxes” indicator, a key gauge considered in the latest World Bank Ease of Doing Business study conducted on 190 economies across the world. In comparison, PwC says, Kenya which has implemented electronic-based tax filing systems ranks 94th.

And while there are fears that the adoption of tech-based systems could trigger massive job losses for people currently running legacy revenue collection systems, PwC says “automated systems serve to free more time for consultants to add real value to organisations.

For example, tax consultants can study the business trends or carry out an industry analysis using data analytics, and thereby gain a deeper understanding of the business and an insight into the industry as a whole.”

AI to aid sealing loopholes in Tanzania tax collection systems

To bolster Tanzania tax collection, improve surveillance and seal gaping loopholes in collection systems, TRA has rolled a plan to adopt AI-based solutions even as it ramps up efforts asking players to comply with tax administration regulations and the Electronic Tax Stamps (ETS) system.

TRA says it is gradually moderning tax administration systems to optimizes enforcement efforts via market surveillance and advanced technology. “To combat illicit trade, the government has implemented several measures, including deploying dedicated enforcement teams and field inspectors to conduct audits,” he detailed.

He said the audits range from production activities in manufacturing floors to retail shops and vendors in the field. The authority is using specialized devices that verify product authenticity.

To ensure watertight implementation, the authority has recruited more than 1,000 new TRA employees to tackle illicit trade and smuggling of both locally produced and imported goods across the country and especially its borders.

Other measures introduced include the Electronic Tax Stamps (ETS) system which enables real-time monitoring of excisable products from the point of  production or import to retail sales.

He also cited launch of the Hakiki App, that allows consumers to verify the authenticity and quality of products before purchase. Electronic Tax Stamps (ETS) system enhances Tanzania tax enforcement by combining material and digital security features.

“Unlike digital-only solutions that are vulnerable to hacking or traditional paper stamps that can be easily counterfeited, ETS integrates banknote-level security features, making it nearly impossible to replicate,” the official explained.

With ETS, seizures of smuggled or counterfeit excisable goods in Tanzania have been successfully executed this year alone. “The technology provides forensic evidence crucial for convicting fraudsters, with its security features serving as corroborative proof of illicit trade activities,” he explained.

Technology is increasingly enabling enforcement officers to seize illegal products, arrest offenders, and support legal proceedings against traffickers.

“At a crucial time when global trafficking and counterfeiting are on the rise, robust regulatory systems are crucial, particularly in multinational economic regions such as the East African Community (EAC).”

“Secure trade facilitates economic growth by preventing exploitation of loopholes,” he noted

Globally, ETS-type systems are widely recommended by international organizations, including the World Health Organization (WHO) and the International Monetary Fund (IMF), as they improve domestic revenue collection, help combat illicit trade, and reduce incidents of tax evasion.

According to authorities, through tax enforcement, technology, and compliance measures, TRA is reinforcing its commitment to transparency and fair business practices.

Furthermore, it is by ensuring a level playing field, that the authority seeks to empower legitimate traders and drive sustainable economic growth in Tanzania.

 

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