Building up fair taxation – New data research collaboration in Tanzania

UNU-WIDER has signed a Memorandum of understanding (MoU) with the Tanzania Revenue Authority (TRA) to support technical analysis on national administrative tax data. With the help of the data, the aim is to find policy solutions to increase tax compliance and domestic revenues in the country. Enhancing tax collection will facilitate the provision of better basic services for the citizens.

The research and data work will be done in collaboration with TRA and the University of Dar es Salaam (UDSM). The collaborative research project will be running until the end of 2023. 

"We are very pleased and excited of this new collaboration, which will provide deeper academic and empirical understanding of tax administration issues and advice for policy making. The project will also provide an avenue for increased operational and institutional capacity", explains Jukka Pirttilä, UNU-WIDER Non-Resident Senior Research Fellow. 

UNU-WIDER already has experience in working with several tax authorities in Africa and the developing world. 

"The key in this type of collaboration is co-creation: research topics and questions have been designed in collaboration. The data work will be done mostly by local experts. UNU-WIDER researchers and the wider academic community will gain new research knowledge, which in turn helps us work towards the sustainable development goals, together with the decision makers and other stakeholders", Pirttilä continues. 

“Sharing experiences with academic practitioners helps to find a deeper understanding of the root causes of tax-related problems. It will also be easier to provide solutions that will influence better fiscal reforms aiming at expanding our tax base. This new collaboration will be most beneficial in unpacking challenges observed in the identified data research area. Our staff will also gain new knowledge through trainings”, explains Ephraim Mdee, Director for Research, Policy and Planning at TRA.

Data for development 

Revenue Authorities collect a large amount of data on individuals and firms that can be used for generating policy relevant research. The data can be made securely available to researchers, provided the requirement does not conflict with confidentiality clauses in tax legislations, and it is especially useful for a reliable analysis of the impacts of the tax system on the economy

The data collaboration will help TRA in formulating and implementing tax reforms and improving their administrative processes. The first research study under the new collaboration examines tax compliance through firm tax examinations. This data work was completed by local experts from TRA and University of Dar es Salaam while UNU-WIDER led the process.  

Other potential research areas under the collaboration project will include taxing the informal sector, impact of tax incentives for small and medium sized firm behavior, profit shifting and corporate tax avoidance, and taxing of different sectors, such as the extractive and service industries. Other planned activities include an open call for research proposals, technical training and an intensive course on tax and development. 

This new co-operation with the TRA is part of the UNU-WIDER project 'Building up efficient and fair taxation'. The collaboration has already started successfully in Uganda.  The project is part of UNU-WIDER's programme on Domestic Revenue Mobilization (DRM). The DRM programme is financed by the Norwegian development co-operation agency Norad.