Individual Corruption

Employees of the tax department reportedly solicit bribes in assessing taxes. There is generally a low degree of trust towards tax collectors and a perception among citizens that the taxes collected are not properly allocated. According to the Research on Poverty Alleviation (REPOA) Special Paper 2009, more than one-third of citizens surveyed viewed the dishonest tax collectors as the most serious problem in tax collection. Despite this, only a small amount of citizens reported violations to the council offices and the police. Fear of consequences and not knowing where to report corruption were the top two reasons for not reporting incidents.

Business Corruption

In the World Economic Forum Global Competitiveness Report 2010-2011, tax regulations are ranked among the five most problematic factors for conducting business in Tanzania. In addition, the World Bank & IFC Enterprise Surveys 2006 reveals that, whereas small bribes are common, only a small proportion of companies expect to give gifts when meeting with tax inspectors.

According to Transparency International Global Corruption Report 2009, SMEs in Tanzania fought back against false tax demands through a collective action project, in which companies referred the tax demands to a phone number set up for this purpose. Here, the swindlers were questioned by the staff and asked to provide details, such as reference numbers and names of department heads. As a consequence, faced with numerous questions, the swindlers gave up.

Companies in the service sectors are more concerned with tax constraints than companies in the trade sector, according to a 2006 CMI study.

Political Corruption

According to Global Integrity 2010, in practice, tax laws are not enforced uniformly and without discrimination in Tanzania, and tax evasion is common despite incentives, such as tax cuts. The report explains the widespread tax evasion in terms of a combination of bribery, favouritism and lack of commitment, as well as the challenges of taxing the considerable informal sector.

The tax authorities are known to accept bribes to grant import licences of approximately USD 20,000, according to the Swedish Foreign Ministry. 

Frequency

The World Bank & IFC: Doing Business 2011:
- During the course of a year, a medium-sized company can expect to pay an average of 48 different taxes at a total tax rate of 45.2% of profits, and spend 172 hours managing the administrative tasks related to these payments.

Research on Poverty Alleviation: Special Paper 2009:
- 39% of citizens in a 2006 survey viewed the dishonest tax collectors as the major problem in tax collection.

Afrobarometer: Summary of Results Tanzania 2008:
- 49% of respondents in this household survey state that 'some' tax officials are corrupt, 27% perceive that 'most or all' of them are corrupt. 7% perceive 'none' of them to be corrupt.

The World Bank & IFC: Enterprise Surveys 2006:
- 19% of companies consider the Tanzanian tax administration as a major constraint.

- 15% of the companies surveyed expect to give gifts in meetings with tax officials.