Shabu Maurus, Tax Partner, Auditax InternationalThe news on Friday morning, July 24, about the former President Benjamin Mkapa passing away was devastating, to say the least. On July 29, the late Mkapa was laid to rest at his home village of Lupaso in Masasi, Mtwara region. Benjamin William Mkapa was Tanzanian's third president His presidency spanned from 1995 through to 2005. Several good things in Tanzania can be credited to Mkapa as President of the United Republic. In his autobiography titled 'My Life, My Purpose,' Mkapa says a lot of those things himself.  But a lot more can be said - more so in the tax space.

It was during his Presidency that Tanzania made some of the most significant positive tax reforms.  As we continue to mourn the late President, I re-count    some of the fundamental tax reforms made during his tenure as head of state:

Establishment of TRA: The Tanzania Revenue Authority was established by Act of Parliament   No.11 of 1995.   But it started   operations on July 1, 1996.  This was fundamental.  Before establishment of TRA, tax administration   functions   were scattered    as   government     departments under the ministry   of Finance.  TRA was established as a semi-autonomous government institution and, from 1996 to 2005, annual tax collections quadrupled in absolute values.

Introduction   of VAT:  For   the first time, Tanzania   introduced   a value-added   tax (VAT) regime   in 1998 through the VAT Act, 1997. VAT is broad-based   consumption   tax that replaced sales tax.

On average, VAT contributed   36 percent of tax collections in Mainland Tanzania during the periods to 2005. To-date, VAT remains one of the major taxes in Tanzania

Excise Duty: Excise duty is one of the oldest taxes in Tanzania, dating back to pre-independence.  But it was only levied on domestic goods. However, in the 2000s, Tanzania expanded the scope of excise duty to some services.

In 2002, excise duty on airtime services by mobile   telephony companies was introduced -and   in 2004, it was extended to 'pay-to-view television' biggest revenue sources. It accounts for almost a quarter of all excise duty collected on domestic goods and services.

Customs: It was   during the   late Mr. Mkapa's Presidency that the EAC Customs   Management Act 2004   was enacted   to facilitate   the implementation of customs matters in the process to achieve a fully-fledged EAC Customs Union. The new EAC law enabled adoption of Common   External Tariffs (CETs) that are applied by all the EAC member states. Customs regulations and rules of origin to administer import duty within the member states were also adopted

New income tax law:  The Income Tax Act was enacted in 2004, replacing the Income Tax Act, 1973. We still have the Income   Tax Act 2004   today (although amended from time to time). The   new   law   significantly   contributed to the improvement   in income tax administration in Tanzania for instance, income tax was 30 percent of tax collections is 2004, but   the figure had increased to 40 percent in 2015.

As the late President Benjamin Mkapa was laid to rest, these tax reforms coupled with the other economic reforms he initiated remain   as his legacies for us to cherish.

'Naked came I out of my mother's womb, and naked shall I return thither. The Lord gave, and the Lord hath taken away; blessed be the name of the Lord’ (Job 1:21, KJV).

May his soul rest in eternal peace, Amen.

By Shabu Maurus, Tax Partner, Auditax International.