Tanzania Goes Digital: A Smarter Tax System for More Revenue and Lower Costs
Tanzania is accelerating the digitalisation of its tax system to increase revenue while reducing the cost and administrative burden of tax compliance.
The shift is moving the Tanzania Revenue Authority (TRA) beyond traditional tax collection towards a system centred on electronic invoicing, integrated databases, digital customs processes, and greater use of data to identify taxpayers and transactions.
For businesses, the change could mean fewer manual procedures and lower compliance costs; for the government, it could offer a broader view of economic activity and a potentially stronger domestic revenue base.
From Tax Collection to Digital Administration
The technology push was highlighted at the 46th Commonwealth Association of Tax Administrators conference in Arusha, where tax administrators examined how digital systems and emerging technologies can improve revenue mobilisation. The TRA’s broader modernisation programme is driving Tanzania’s approach.
Systems already introduced include the Tanzania Customs Integrated System and the Integrated Domestic Revenue Administration System (IDRAS), which brings together 17 modules covering various aspects of domestic tax administration. Electronic invoicing is one of the most significant changes.
The system allows taxpayers to generate electronic fiscal receipts without necessarily relying on physical electronic fiscal devices. This is intended to make compliance easier while giving the TRA access to transaction information closer to real time.
The objective is therefore twofold: to make it easier for compliant taxpayers to meet their obligations while providing the tax authority with better information to detect under-declaration, non-filing and other forms of non-compliance.
Bigger and More Visible Tax Base
Technology is particularly important to Tanzania’s efforts to broaden its tax base. Digital systems can integrate information from different parts of the economy, enabling the tax authority to identify discrepancies between declared income, transactions, customs information and other available records.
The strategy also extends to the rapidly expanding digital economy. Tanzania’s Medium-Term Revenue Strategy for 2025/26–2027/28 identifies the need to register resident and non-resident digital businesses, monitor digital economic activity, and integrate data from payment gateways and other platforms. This matters because economic activity increasingly occurs through platforms and payment channels that conventional tax administration systems struggle to capture.
Digitalisation gives TRA a means to bring more of that activity into the formal tax system. The government is simultaneously pursuing higher domestic revenue. Tanzania’s 2026/27 budget estimates tax revenue at Sh36.99 trillion, with domestic revenue expected to finance about 74.2 per cent of the national budget. Under Vision 2050, Tanzania aims to raise its tax-to-GDP ratio above 20 per cent.
What this Means for Businesses
For businesses, the most immediate benefit is reduced time and resources needed to manage tax administration. A more integrated system can reduce repeated submissions of information, physical visits to tax offices and manual reconciliation of transactions. Electronic invoicing can also provide businesses with a clearer record of their transactions and tax obligations.
The move towards risk-based enforcement could further reshape the relationship between taxpayers and TRA. Rather than subjecting all taxpayers to the same level of scrutiny, data can pinpoint areas with the greatest compliance risks. This would allow compliant businesses to spend less time on routine enforcement while enabling TRA to focus its resources on cases requiring closer examination.
Gaps in the Digital System
The transition, however, is not without challenges. Tanzania’s Controller and Auditor General has identified weaknesses in existing electronic tax systems, including persistent non-filing by some taxpayers and gaps in the use of electronic fiscal devices. The 2024/25 audit also found 30,833 eligible taxpayers in the regions covered by the audit who had not acquired electronic fiscal devices.
These findings demonstrate that moving a tax system online does not automatically ensure compliance. Taxpayers need reliable systems, adequate digital access and clear guidance, while the TRA needs the capacity to manage increasingly large volumes of data and to protect taxpayer information. Another question is whether digital reforms remain genuinely taxpayer-focused.
If new platforms merely transfer complex procedures from paper to computers, the compliance burden may persist. The value of the reforms will therefore depend on whether technology actually simplifies the process.
Digitalisation to Revenue Growth
Tanzania’s experience points to a broader shift in how governments approach taxation. Rather than relying primarily on higher tax rates, authorities are increasingly using technology to make the existing tax base more visible and improve voluntary compliance. TRA reported collecting about Sh37.95 trillion in 2025/26, against a target of Sh36.07 trillion.
Continued digitalisation is intended to build on this performance by improving the authority’s ability to identify taxpayers, monitor transactions and collect what is legally due.
The longer-term ambition is a tax system in which filing, invoicing, payment and verification are increasingly integrated, thereby reducing the administrative burden on taxpayers and strengthening the government’s revenue position.
Conclusion
Tanzania’s digital tax drive is therefore not simply about replacing paper processes with electronic ones. It is part of a broader effort to build a larger, more efficient domestic revenue base while making compliance less costly for businesses and individuals.
Its success will ultimately depend on whether technology delivers simpler taxpayer services, better enforcement and greater voluntary compliance. For Tanzania, the next stage is to ensure that the systems being built translate into measurable improvements in both revenue collection and the everyday experience of paying tax