Determinants of tax revenue performance in Tanzania

No Thumbnail Available
Journal Title
Journal ISSN
Volume Title
University of Dar es Salaam
The purpose of this study was to identify and examine the impact of tax determinants on the tax revenue performance (TRY) of Tanzania by using time series data for the period of 1981-2010. The TRY was taken as the dependent variable, and the explanatory variables included per capita GDP, share of agriculture in GDP, government development expenditure to GDP, import to GDP ratio and external debt stock to GDP. After performing a unit root and cointegration tests, the error correction model (ECM) was adopted to estimate the impact of these variables in tax revenue performance. The ECM results have shown that per capita GDP, share of agriculture in GDP and external debts are significant variables in explaining tax revenue performance in Tanzania and the development expenditure was found statistically not significant. The established result indicates per capita GDP with the coefficient of 0.55 as the most positive and significant variable among others. The coefficient of external debts and agricultural share were found to be negative and therefore depressingly influence the tax revenue performance of Tanzania. It is worth mentioning that the established signs of all of the significant variables in tax ratio are similar with the hypothesized precursor. Thus, for a given tax regime in Tanzania, economic policies that promote per capita, would contribute to raise tax revenue performance of the country. Moreover, policy measures which reduce dependence on external funds especially loans should be given a priority so as to increase tax revenue performance.
Available in print form
Tax administration and procedure, Tax revenue estimating, Taxation, Tanzania
Raymond, N (2013) Determinants of tax revenue performance in Tanzania, Master dissertation,University of Dar es Salaam. (Available at