Improving Tax Transparency in Tanzania: Why Taxpayers' Access to Information Must Be a Priority

More than 200 years ago, Scottish economist Adam Smith laid out the famous Four Canons of Taxation — Equity, Certainty, Convenience, and Economy. These principles continue to shape how modern tax systems function. One of them, Certainty, remains especially relevant in today’s digital era. Smith argued that taxes must be predictable and clearly understood, writing:

“The tax which each individual is bound to pay ought to be certain, and not arbitrary… The time of payment, the manner of payment, the quantity to be paid, ought all to be clear and plain.”

In simple terms, taxpayers should never be left guessing about what they owe. This is the heart of transparency — a tax system where information is accessible, accurate, and consistent.

Global institutions echo the same idea. The World Bank’s Tax Administration Diagnostic Assessment Tool (TADAT) includes a performance area specifically evaluating how easily taxpayers can access information. Transparency is not optional; it is globally recognised as a pillar of voluntary compliance and good governance.

In this article, I focus on one crucial but often overlooked area: the accessibility of taxpayer-specific information, particularly the visibility of the Tax Position. While reforms have been made, significant gaps remain — and these gaps create confusion, fuel disputes, and erode trust. Of course, these represent my observations, and others may have different experiences or perspectives, which are equally important in this discussion.

What We Currently Have: A Good Start, but Not Enough

Tanzania’s digital tax platform — the TRA taxpayer portal — has introduced important online services. Taxpayers can log in using their TIN, file returns, generate control numbers, make payments, access assessments, and request remissions, among other functions.

These improvements deserve recognition. However, the system still falls short of offering a complete picture of a taxpayer’s affairs.

At the moment, taxpayers cannot see their full Tax Position, which is the running record of all taxes, penalties, interest, adjustments, and outstanding balances. Because this information is not visible online, many taxpayers only discover issues when they receive physical letters showing unexpected liabilities, some of which they were never aware of.

Even taxpayers who proactively visit TRA offices often face another challenge: receiving different tax positions from different offices or officers. This inconsistency naturally raises questions about the accuracy and reliability of the information provided.

In summary, the Tax Position currently exists only on the side of the Authority, not as shared and transparent information. The fact that it often requires manual adjustments before issuance also increases inconsistencies and creates more room for doubts and disputes. So, Digitisation has begun — but transparency remains limited.

I do acknowledge that TRA may have internal constraints or legacy system challenges contributing to this situation, and taxpayers themselves may not always fully understand the complexities involved. Still, constructive dialogue is necessary to bridge the gaps.

Key Gaps That Need Attention

Three major issues stand out, based on general observation:

1. The Tax Position Is Not Accessible Online

Without visibility, taxpayers cannot monitor or verify what TRA records as their obligations. This lack of access is arguably the biggest transparency challenge.

2. Information Inconsistency

Different TRA offices or officers may produce different results for the same taxpayer. Such inconsistency reduces confidence in the system and complicates compliance efforts.

3. Other Important Tax Processes Not Yet Linked to the Portal

Audit notices, objection processes, ombudsman matters, and audit discussion notes still rely heavily on manual communication. This leads to fragmented information, delays, and unnecessary back-and-forth.

What Can Be Done: Practical and High-Impact Solutions

Digital transformation in tax administration is not just about technology — it is about creating a predictable, trustworthy system that works for both taxpayers and the Authority. Below are three reforms that could significantly improve transparency and efficiency. These are personal suggestions based on what seems practical; they are open to further refinements by practitioners.

1. Make the Tax Position Visible the Same Way Banks Show Account Transactions

Imagine if a taxpayer’s TIN functioned like a bank account number. When you log into your online banking, you see every credit, debit, charge, and interest calculation. The tax portal could operate in a similar way. Ideally, it should serve as a single point of access where taxpayers can review all their tax affairs in one place, presented in an up-to-date, systematic, detailed, and easy-to-understand format.

A taxpayer should be able to view all relevant transactions, including current balances, penalties and interest as they accrue, tax adjustments, tax payments, and all types of assessments.

If this were possible, the “surprise letters” many taxpayers receive would virtually disappear. Taxpayers would identify concerns early and seek clarification before issues escalate. If TRA were to prioritise one reform, this might be the most impactful.

2. Implement a Document Management System Within the Portal

A modern tax portal should also serve as an official communication hub.

TRA could issue notices, audit letters, requests for information, discussion notes, and decisions directly through the portal. Taxpayers or their authorised representatives would respond through the same system. Every communication would be timestamped and stored permanently.

Not only would this reduce paperwork — it would also create a clear and credible audit trail for both sides. Institutions like BRELA have demonstrated the immense value of digitising communication.

3. Integrate All Major Tax Processes Into One Platform

Instead of using physical letters and multiple office visits, most of the tax journey could be managed inside a single online environment. This would include the tax audit process, objections process, ombudsman matters, instalment payment applications, VAT refund tracking, and Tax clearance certificate requests.

A unified platform would remove much of the confusion taxpayers currently face and create greater clarity for TRA staff as well.

A Realistic Roadmap to Improving Tax Transparency: How Tanzania Can Transition Smoothly

Naturally, improvements of this scale require careful planning. Data cleanup, system upgrades, user training, and change management are substantial undertakings. TRA may also be concerned about exposing historical tax data that is incomplete or inaccurate. However, keeping taxpayers in the dark is not a long-term solution. It breeds frustration and mistrust, and in some cases creates opportunities for corruption. A transparent system protects both TRA and taxpayers.

For this process to succeed, both sides must approach it in good faith: TRA should not use the exercise as an opportunity to impose unrealistic or unverified liabilities, and taxpayers should, in turn, be prepared to acknowledge and settle the amounts they fairly owe.

In my view, a practical approach could involve three steps. Of course, others may have alternative ideas, which are welcomed in the comments.

Step 1: Write Off Unconfirmed Liabilities Older Than Five Years

Except for the already mutually agreed-upon tax liabilities, clearing old “ghost balances” would create a fresh starting point.

Step 2: Make Tax Positions Visible and Open a Three-Month Correction Window

Once tax positions are made accessible to all taxpayers through their portals, they can review their transactions and submit correction requests with appropriate explanations and supporting documents. This would resemble a mass issuance of tax position letters, but the priority during the three-month window would be data cleaning rather than tax collection.

Step 3: Test and Maintain Real-Time Accuracy Thereafter

Once the data has been cleaned and confirmed, the system should be tested to ensure that Tax Positions update instantly whenever any change occurs—whether it is a new assessment, a payment, an adjustment, a remission, or any other update. In this way, both TRA and taxpayers will rely on the same record, helping to eliminate “surprise letters” and enabling taxpayers to address issues in their tax accounts in a timely manner.

Conclusion: Transparency Is Not Optional — It Is Foundational

Improving the transparency of taxpayer information is not just a technical upgrade; it is a governance upgrade. It enhances voluntary compliance, reduces disputes, eliminates unnecessary surprises, and strengthens trust. A robust taxpayer portal — complete with full visibility of the Tax Position, integrated communication, and digitised processes — could meaningfully transform the tax landscape in Tanzania.

The journey may be demanding, but the long-term benefits are worth the effort. As with all public administration reforms, multiple perspectives are needed to refine the best way forward. This article offers just one point of view; hopefully, there will be contributions from practitioners with diverse experiences to add valuable depth to the ongoing conversations with the Government and TRA on this topic.

It is time to face the giant — and build a tax administration rooted in clarity, fairness, and transparency.