About
Tax research for development – lessons from Tanzania

This project analyses administrative tax data in Tanzania to provide knowledge for better policymaking to mobilize public revenue for inclusive economic development.

The project conducts new, policy-relevant research based on the empirical analysis of administrative tax data in partnership with the Tanzania Revenue Authority (TRA) and Department of Economics of the University of Dar es Salaam (DoE-UDSM). The research outputs of the programme are intended to assist policymakers as they develop and implement policy tools to improve development prospects in their country. An important additional goal of the project is to develop institutional and individual capacity to use administrative data for ongoing economic research and policy calibration.

Research areas under the collaborative project include taxing the informal sector, bottom-up approaches for estimating VAT gaps, and taxing of large enterprises. The administrative data in the proposed research has been anonymized and compiled at TRA.

This co-operation is a subcomponent of the UNU-WIDER project Tax research for development. In Tanzania, the co-operation with DoE-UDSM also covers tax-benefit microsimulation work done under the SOUTHMOD project. Both projects are part of UNU-WIDER's programme on Domestic Revenue Mobilization (DRM), which is financed by the Norwegian development co-operation agency Norad.

Key questions

• How large is the value-added tax (VAT) gap, i.e., the extent of evaded or avoided VAT? This will be estimated using a so-called bottom-up approach for measuring tax gaps.
• How have recent changes in the registration of taxpayers influenced formality in Tanzania?