The Administration of Value Added Tax in Tanzania.

Saiteu, Baraka (2022) The Administration of Value Added Tax in Tanzania. Doctoral thesis, The Open University of Tanzania.

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Abstract

The Value Added Tax (VAT) was introduced in Tanzania to widen the tax base because is stable, neutral, flexible, and capable of increasing revenue. This requires clear laws that govern the administration of VAT. Despite the introduction of VAT in Tanzania, its administration has been hampered by legal barriers contributing to the loss of government revenue. This concern raises the issue of what Tanzania can do to increase revenue through VAT. The study reviews Tanzanian tax laws governing VAT and its role in increasing revenue. It also examines whether international principles and standards governing the taxation of VAT are fully complied with by Tanzania. In finding answers to the existing legal problems under the study, doctrinal legal research methodology complemented by empirical and comparative legal research methodology is employed. The study reveals that the objective of increasing tax revenue through VAT seems not to be fully realized. This is because the existing law governing VAT is not well articulated, lacks clarity in some areas, and does not reflect well the international principles and standards governing the administration of VAT. Consequently, the legal challenges in respect of VAT affect the effective administration of the VAT. This caused negative effects on the realization of the objectives for the introduction of VAT in Tanzania. The study recommends for amendment of the VAT law to address the identified legal challenges and also international standards with the aim of realization of the objectives for the introduction of value added tax. The amendment will guard against the loss of Government revenue. Keywords: Value Added Tax, VAT Challenges, VAT Administration, VAT imposition

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