The study seeks to assess the feasibility of increased domestic revenue for financing Tanzania’s development aspirations. The assessment is undertaken for the aggregate tax revenue as well as its four major tax categories of income tax, value-added tax (VAT), excise duties, and import duties. This is a unique contribution of this study to the literature, as previous assessments of the Tanzanian tax system have focused on the aggregate level (Osoro,1992; Chimilila, 2018). Three procedures were undertaken to assess the performance of tax revenue mobilisation and the feasibility of increased domestic revenue mobilisation in Tanzania. First, we used the most common, and simplest procedure to compare the country’s tax-to-GDP ratio with those of comparable economies. Second, we estimated tax buoyancies for each tax category to determine their growth responsiveness to changes in the respective tax base growth. Thirdly, we estimated the taxable capacities of the tax categories and compared them with the respective tax efforts. READ ON…
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