Tanzania and The Burden of Tax Incentives

The document reviews Tanzania's tax incentive policy framework, identifying gaps and proposing recommendations for improvement. It explains tax incentives as tools designed to encourage specific economic activities through measures like exemptions, deductions, or credits. Tanzania offers various incentives across sectors, governed by several laws and authorities. However, the current framework lacks transparency, cost-benefit analysis, and consistency. The document emphasizes the need for reform to align incentives with national goals, address tax revenue shortfalls, and promote strategic investments while reducing economic inefficiencies. Recommendations include periodic law reviews, eliminating ineffective exemptions, and strengthening oversight mechanisms.