Chapter one .

This chapter is explain about the introduction of the project that is tax administration and it's explain the
general and specific purpose of the tax administration in Tanzania . Also it's give the historical
background of Tax administration in Tanzania where and when tax administration is established .It's also
give the main objective or purpose of tax administration system . specific and general are explained on
different ways.

1.0: INTRODUCTION.

Tax administration is a bod or an agent of the government that the government use it to manage and to
conduct all tax issues and system in Tanzania.Taz administration also involve identification and
registration of tax payers .This body was implemented and inforce tax legislation and registration in
order to control all tax issues in Tanzania country.Tax management are is controlled by two main organ
that are central government tax administration and (LGAs).In Tanzania wee seen that tax administration
always is administered by (TRA) under four main department which are under the parliament no. 11 of
1995 and to start it's operation on fist January of 1996.Thos department are large taxpayers
department, domestic revenue department,custom and exercise department and tax investigation
department all of these department manage all tax issues in Tanzania on deferent levels and area. On
Central gorvenment tax administration all tax revenue are uder this administration but for those non tax
revenues are controlled by local government authority.

1.2. the content that introduce the topic of the project.

The topic oof this project is about tax administration system in Tanzania country as a developing country
where by in Tanzania tax was administered on two mainly parts these are Central government tax
administration and local government tax administration. This parts have different levels example for
local government tax administration many non tax revenue are collected under this administration
example of those are grant, rent printing of current and other. But Central government control all tax in
urban areas .

1.3. THE GENERAL PURPOSE OF THE PROJECT .

The general purpose of establishment of tax administration in Tanzania was to administer all system of
tax from Central government to local government in order to control all tax issues and system by
manage it.And the main authority that was established is TRA in order to bring good tax administration
and collection of revenue from those department.

General purpose of this project is to administer all tax system and issue in Tanzania.

Specific purpose of the project.

: The administration is established in order to bring motivation to taxpayers in order to make them More
good taxpayers.

:Also object to go against tax evasion and tax avoidance by giving punishment for those who avoid tax.

:To provide more explanation about importance of tax payment to the tax payers.

:Also to identify larger taxpayers and small taxpayers which are done by TRA department.

:To issuer that the tax is payed for every each taxpayer.

: To maintain equality from large and small taxpayers.

1:4:Historical background of Tax administration in Tanzania.

As we seen as before colonial rules period there is different system of tax in Tanzania thus tax
administration which for now is under TRA was controlled by colonial Masters where by there are so
many tax example head tax but for now after colonial rules we have main authority that is established in
1995 under the parliament of Tanzania . This become it's operation on fist of January of 1996.This
authority is called TRA Tanzania revenue Authority are main organ of government collection of
revenue.TRA is under the supervision of ministry finance.Through TRA main department that are large
taxpayers department this deal with all large taxpayers who contribute about 70% of domestic revenue.
Another is custom and exercise department this control and administer all international trade tax that
counts about 42% of total TRA collection . Another one is domestic revenue department this is
implemented in July 2005 in order to administer taxes from those small taxpayers and last one is tax
investigation department which is established in order to minimize the occurance of criminal matters on
tax issues.TRA was introduced VAT in order to replace sales tax and exise duty tax. Before
establishment of TRA department there are three department which are sales tax department , custom
tax department and income tax department so the government has to change the system of tax
administration which is under TRA as the main source of government revenue collection.
Chapter two.

In this chapter am discuss about the current of tax administration system in Tanzania that means the
today system of tax administration .on local government tax administration and central government tax
administration in Tanzania in terms of their structure and function. The gorvenment differentiate this
two mainly types of tax administration model according to the powers and function together with their
structure.And also in this chapter am going to explain the benefits of central and local government tax
authority in terms of tax compliance.Where by the taxpayers comply with tax laws.

2.0 discussion of tax administration in Tanzania.

2.1 The current of tax administration system in Tanzania

On today tax administration have two mainly categories that represents the system of tax in
Tanzania.Those are diect tax and indirect tax thus direct that involve the tax that was imposed by the
government direct to an individual or personal on their income gain example as we see corporate tax,
capital gains tax, wealth tax ect. Indirect tax tax that is imposed by the government to an individual from
consumption of goods and services . Example of this are custom and exercise tax, (VAT) property tax this
was through land or building it's imposed by the central government.

2.2: central government tax administration in Tanzania and it's funtion

All central government tax administration is administered by TRA .This authority have four main
department those are large taxpayers department this control and manage all large taxpayers and it
take about 70% of domestic revenue, another is domestic revenue department this deal with small and
medium taxpayers where by it contribute about 30% of domestic revenue. Another is tax investigation
department which deal with tax flaund and last one is custom and excise department this control and
manage all international trade tax which count about 42 % of total TRA collection.central government
tax administration Deal with all collection of public revenue not non tax revenue.example of public
revenue are goos and services tax .

THE FUNCTION OF CENTRAL GOVERNMENT TA XADMINISTRATION

 Central government have to perfom day to day activities of the authority that is done by
commissioner general who is control all the board members. Day to day activies of the board
include assessment and co mmllection of tax ,and all related tax issues.

 Central government help to advise the ministry of finance about tax issues .Example on tax
fraud when taxpayers does not want to paye tax so the central government have to give more
explanation about the importance of tax payement that may help use to aquire many services.

 Also to administer all central tax laws by maintain proper effect of the law and provision of tax
laws from each ministry of finance.tax laws and isues should be easy to be understanded by the
tax payers in ordre to jmake them to paye tax in timely and accuracy.

 To give the public provison of services . Example education to secondary level and when they
collect revenue from public or tax revenue under TRA .Example of those tax are custom and
excise tax which is collected from consumption of goods and services.

 Also to provide the trade statistics on tax assessment , collection and management. This may
helps us to know the tax arrangement on different areas during the year thus central
government control the trade statistic about tax issues that differentiate the Tanzania system of
tax with another countries .

 Also to provide the amount of tax rate that should be payed by the taxpayers .This may help to
know required amount tat differentiate large taxpayers and small taxpayers.TRA as control tax
rate of the tax payer that are doing by department.Example large taxpayer department deal
with all large taxpayers .

THE STRUCTURE OF THE CENTRAL GOVERNMENT TAX ADMINISTRATION

 Commisioner general who is the head chairman of the authority under the
recommendation of ministry of finance.Commisioner general have to perfom day today
activities of the authority.

 Principle secretary of the ministry of finance of the Zanzibar government

 Deputy commissioner who direct and control the director of tax payers

 Director board secretary and legal who is appointed by deputy commissioner.

 Permanent secretary of the ministry of finance .

 Commisioner domestic revenue who oversee all small taxpayers and medium tax payers.

 Commiosioner large tax payres who control all taxes from large taxpayer .This contribute
about 70% of domestic revenue.
2.3: THE LOCAL GOVERNMENT TAX ADMINISTRATION IN TERMS OF STRUCTURE AND FUNCTIONS

Local government tax administration refers to the assessment of tax and non tax revenue within the
rural and urban areas its divided into twa main parts these are district authorities and urban
authorities .District authorities is categoriesed on three main parts which are village government , ward
government and district council.And urban authorities have three mainly parts which are town council ,
municipal council and city council.Local government perfom different fuction to the urban and district
authorities.

FUNCTION OF LOCAL GOVERNMENT TAX ADMINISTRATIO AND ITS STRUCTURE

 T o isuere collection of non tax revenue from the local areas.

 To remove the gape between small and large ta payers by providing equality to all
citizen.

 To go against tax evasion and avoidance by giving punishment to those who avoid
tax.

 Also to fight against corruption by make it relative easy. This based on different
types of tax to large and small taxpayers.

STRUCTURE O FLOCAL GOVERNMENT TAX ADMINISTRATION

Local government tax administration in Tanzania is divided into two main categories .

DISTRICT AUTHORITIES

This is divided into three parts which are village government , ward government and district
council.District authorties control all taxes in village government ward government and district
council.On village gorvenment tax are controlled by chairperson of the village .On district council the
chairperson of district who manage and oversee all tax isues in the district.

URBAN AUTHORITIES

This is the second part of the local government tax administration its divided on three parts which are
town council ,municipal council and city council.Where by the head chair man is oversee all tax aises
ans management.
2.4:THE BENEFIT OF LOCAL AND CENTRAL GOVERNMENT TAX ADMINISTRATION

2.4.1 : Benefits of central government tax administration

: Central government tax administration leads towards public provision service like public roads whene
the revenue are collected and used to spend on roads maintenances. As wee seen as many public roads
has more quality the urban roads thus the government spend more money for the maintenance of
public roads.

: Central government tax administration also encourage and improve high standards of transportation.
Towards the revenue collectesld by the government there some money used to spend on maintenances
of roads so has to improve the system of transportation of good between different countries.

: Also it reduces the number of externality goods. When the government increase the imposition of high
amount of tax rate enable to the decrease of unwanted goods and services which may leads to the
environmental pollution. Example of those externality goods are alcohol, marijuana , tobacco's and etc.

:Also it improve the international trade among the country.As we seen as custom and excise department
which control as the one of the department of TRA it control the international trade within the
difference countries by insured proper collection of tax in equally way.

:Also it improve the high revenue to the government.When the good system of tax are managed there is
increas of tax revenue among the government . So central government tax administration has to
improve the revenue by imposing high tax rates that is used to improve and to spend on various
activities for the uses of human being.

2.4.1:BENEFITS OF LOCAL GOVERNMENT TAX ADMINISTRATION

Local government tax administration bring us with many important thing on our daily life.Some of those
are follows

: Loca government tax administration bring us with social security defense. The revenue which are
collected by the local government some time are used to improve social security among the small group
of people.

: Local government tax administration help the central government to Know the large and small tax .
Also help the central government to range the amount of tax rate that should be paid by large and small
taxpayers within the district and city authorities.

: Local government tax administration drive all public services in the country . Local government supply
public services which are given by central government in order to make easy to the citizens to acquire
those services. Example primary schools and dispensary for health insurance services.
:Local government tax administration help to insure

THESTRUCTUREOFLOCALGOVERNMENTTAXADMINISTRATION
CHAPTER THREE

3.0 Taxes and tax compliance

The aim of this chapter is to explain about the concept of taxes and non taxes , also it explain about tax
compliance together with is feature and what are the measure should be taken against all non tax
compliant.

3.1 The concept about tax compliance

Tax compliance means that the situation where by the taxpayers have the decision to comply with all tax
rules ,laws and regulations by maintain timely and accurate payment of tax without forced by the tax
collectors .Also tax compliance means the ability of the taxpayers to late the right amount of tax in the
right place and right time . When the taxpayers have willing to pay tax without avoid it's the time and
amount of tax to be paid this situation is know as tax compliance.When taxpayers avoid tax means that
the amount of tax rate is higher than their income gain during the day.

3.2: Types of tax compliance

Tax compliance is divided into two mainly parts that are voluntary tax compliance and forced or non
voluntary tax compliance.

3.2.1 :Voluntary tax compliance

Voluntary tax compliance involve the situation where by the taxpayers have willing to pay tax and to
insure tax laws by paying tax on timely and accuracy without forced by the tax officers. Thus the
taxpayers has to comply tax without forced by the tax officers when their amount by of tax that they his
not more than their income gain during the day.Volumtary tax compliance help the government to
increase the revenue when the taxpayers have willing to pay tax on timely and accuracy and required
amount of tax.Also voluntary tax compliance help the taxpayers to get social basic needs when they pay
tax before the statutory due date for payment of tax.Also lead the taxpayers to can not avoid tax
payment nda tax evasion.

3.2.1: Involuntary tax compliance

This is the type of tax compliance where by the taxpayers are complying to pay tax after the
enforcement from the tax collectors.On involuntary tax compliance people are avoid tax by paying tax
after due date of tax payment so they forced by tax officers so the government can corporate with
taxpayers in order to make them compliance taxpayers. Involuntary tax compliance can be caused by
different factor these involve the higher tax rate which are payed by the taxpayers when is more than
their income gain during the day of tax payment.Thus why the government take the action for those
who are involuntary taxpayers.
3.3: Features of Tanzania tax administration which enhance tax compliance

Tax compliance is improved and developed according to many features that make it safety in Tanzania
tax administration. These are follow

CERTAINTY:

In order to improve the system of tax compliance the authority should make certainty oto an
individual.This help the taxpayers to understand what the amount they should be payed together with
the time for tax payment.certainty means that the tax policies are easy to the taxpayers to understand
more information about tax management and submission of tax returns.

:Should be simpler

Tax administration should be easier and simple for the taxpayers in order for them to understand what
are the important thing during payment of tax.when the tax policies are simple help to the minimization
of tax fraud and avoidance of tax payment.

:Should be improved by the present of policies.

Means that those policies have to explain about obligation of taxpayers and the procedure that help the
taxpayers to know their right and obligation on tax issues.Also the procedure for tax payment should be
percent enable to decrease the occurance of tax evasion and tax avoidance.

:Taxpayers information should be extent permitted by the law.

Tax laws have to explain the purpose of tax administration which are under the law of tax
administration.So all information of taxpayers is explained and controlled by the law of taxation.

There should be fairness for both skilled and non taxpayers.

Also for those taxpayers who have small income gain should be pay tax that is equal to their income
gain.so both rich and poor people must have the issue of equity that should giving by the government or
tax officers.

Good tax administration should monitor tax compliance.

In order to make good tax administration there should be the tax compliance that means the willing of
the taxpayers to comply with tax laws by paying tax on timely and accuracy for proper due date and
submit the fill return.
3.4: Taxes and non taxes administered central government with their respective statues.

3.4.1: Taxes revenue administered central government.

Taxes involve the compusory contribution that is imposed by the government from the people or
individual from their income gain.Also tax can be charged on the consumption of goods or service.Only
the government have the responsibility to collect tax on equally and fair amount that should be
collected.Main authority that control all taxes is TRA which is under the central government.Example of
those tax are follow.

1:VAT TAX

Vat involve the imposition of tax from consumption of goods and services on value added for each stage
of manufacturing of central government have the responsibility to collect vat tax on the right rate .This
was imposed from manufacturing of goods to the final consumer.

2: EXCISE DUTY TAX.

Also this is administered by central government where by it is imposed from the consumption of specific
goods and services . Example are alcohol.

3.4.2: Non taxes administered by central government.

Interested.

Amount of money that the government received from the loan provided in order to generate the
government expenditure.So this can be from outside country when the government borrow to meet the
expenditure.

Usre fees.

Also fees from various sources example power supply fees this is received by the central authority of the
government.

3.5:1.Taxes administered by local government.

Taxes that are administered by local government these are follows

:Land value tax

This also is imposed by the local government from na individual land where by for every purchases of
land there some amount of tax should be payed . This can be paid for every each year of income.

:House tax .

This is tax from buildings that is imposed by the local government in order to spend the expenditure on
various economic activities.This is imposed from an individual gain of building proft when they sales
house for profit.

3:5:2. Non taxes that are administered by local government.

: Property tax.

Also this is the source of local government revenue where by it's imposed from the property gain of the
person or na entity. Property tax is charge direct to an individual on there property gain for the year of
incom.

:Paye.

This also is imposed by local government that involve the tax from earn of an individual.And charge by
the local government example earn on a business .

3: 6 MEASURE AGAINST NON COMPLIANT TAXPAYERS.

: Simplification of tax laws.

In order to figt against non compliance tax laws should be simplified to be easier that the taxpayer can
understand their obligation to comply with tax rules and regulations in tax management .This may help
to solve the problem of tax evasion and avoidance.

: Enforcement of tax laws.

Tax laws Should be enforced against non compliant taxpayers because through enforcement na
individual can comply with tax laws and payment in timely and accuracy.So local government and
central government have to expand and to spread the laws with the area as the measure to go against
non compliant taxpayers.
:Provision of education to taxpayers.

Education have to provided by the tax collectors for taxpayers that help them to be a compliant
taxpayers by insurer proper collection of tax according to the due date.Tax officers have to
communicate with taxpayers by giving education on safety measures for collection of tax.

:Improving services to the taxpayers.

Social services have to distribute among the taxpayers and the citizens as the whole.Those are like
hospital for health service , school for education,and etc.

CHAPTER FOUR.

The aim of this chapter is to conclude about what are discussed from chapter one to chapter three .

4.0.CONCLUSION AND RECOMMENDATION.

From the above explanation about tx administration in Tanzania as wee seen as tax tax administration
play an important role for the country to generate the spending of money on various economic
development.Due to the collection of tax when the amount of tax rate is increased help to reduce all
harmful product like marijuana , alcohol , tobacco's . Tax administration also provide the solution for any
mistake occurr during tax assessment and collection by increase the amount of tax on various
activities.Also by giving education on how the tax revenue is more important to the spending of many
social services.So I suggest that everything one should not avoid tax payment because it's act as main
source of revenue that help the government to spend the distribution of social services among the
individual

: AKNOWLEDGEMENT.

Fast of all I would like to thanking God for give me good life together with my lovely parents who escort
me to prepare this project by giving me money to print it. Also thank you publishing NYATAMBA.G who
help me to got some materials to complete my project.I acknowledge to my best friend lightness may
God bless you for advising me to write this project. Lastly I aknowledge to my supervisor Mr MKENDA
who supervise me about the guidelines for writing this project I think that without you I can not
undertaken this project.
:DEDICATION.

Dedication to my supervisor Mr MKENDA for preparing the project.Also I dedicate to all tax
administration books for aquiring some materials in order to prepare this project .Dedication to my
TABLE OF CONTENT

DEDICATION...............................................................................................i

AKNOWLEDGEMENT....................................................................................ii

LIST OF ACRONYMS....................................................................................iii

LIST OF TABLE, PICTURE.............................................................................iv

CHAPTER ONE...............................................................................................1
INTRODUCTION..............................................................................................1.0
REFFERENCE

W.W.W .TRA.go.com.tz

NYANTAMBA,G , ELEMENT OF TAXADMINISTRATIONAND COMPLIANCE

MPONGULIANA ,PRINCIPLE OF TAXATION [2000]

FORUM ON TAX ADMINISTRATION COMPLIANCE, COMPLIANCE RISK MANAGEMENT OCTOBER [2004]