THE IMPACTS OF VALUE ADDED TAX

THE IMPACTS OF VALUE ADDED TAX (VAT) RELIEF AND EXEMPTIONS TO REVENUE COLLECTION IN TANZANIA
By
Jesse Jonathan
A Dissertation Submitted in Partial Fulfillment of the Requirements for the award of the Master of Business Administration in Corporate Management (MBA-CM) of the Mzumbe University.

2018
CERTIFICATIONWe, the undersigned, certify that we have read and hereby recommend for acceptance by the Mzumbe University, a thesis entitled; “The Impacts of Value Added Tax (VAT) Relief and Exemptions to Revenue Collection in Tanzania”, in a partial fulfilment of the requirements for award of the degree of Master of Business Administration in Corporation Management (MBA-CM) of Mzumbe University
___________________________
Major Supervisor
___________________________
Internal Examiner
Accepted for the Board of MUDCC
_______________________________________________________
PRINCIPAL, DAR ES SALAAM CAMPUS COLLEGE
DECLARATIONANDCOPYRIGHTI, Jesse Jonathan, declare that this dissertation is my own original work and that it has not been and will not be presented to any other university for a similar or any other degree award.

Signature: ___________________________
Date: _______________________________
© 2018
This dissertation is a copyright material protected under the Berne Convention, the Copyright Act 1999 and other international and national enactments, in behalf, on intellectual property. It may not be reproduced by any means in full or in part, except for short extracts in fair dealings, for research or private study, critical scholarly review or discourse with an acknowledge, without the written permission of Mzumbe University, on behalf of the author.

ACKNOWLEDGEMENTMy first and foremost thanks go to my Almighty God for giving me strength and courage to pursue my studies and finally conducted a research which led to the production of this document. My thanks also is to my family who supported me morally and spiritually during the whole period of my studies and during the research study. I warmly appreciate their support, advice and encouragement which enabled me to put in more effort to accomplish the study successfully.

My sincere appreciation goes to my supervisor, Dr. Mushumbusi Paul Kato who supervised and led me starting from proposal writing up to the preparation of this dissertation. His helpful, patience, intellectual guidance and support have helped me not only to accomplish this study, but also to come up with the expected quality results presented in this report.
Also, my thanks go to my fellow MBA (Corporate Management) students of Mzumbe University and all the people who have contributed in one way or another in accomplishing this report.
DEDICATIONTo my parents and my family; they know why I love them all.

LIST OF ABBREVIATIONBoT-Bank of Tanzania
EFDs-Electronic Fiscal Devices
EPZA-Export Processing Zones Authority Act
FDI-Foreign Direct Investment
FDI-Incentive is to Attract
GDP-Gross Domestic Product
IMF-International Monetary Fund
SPSS-Statistical Package for Social Scientist
TIA-Tanzania Investment Act
TIC-Tanzania Investment Centre
TMAA-Tanzania Minerals Audit Agency
TRA-Tanzania Revenue Authority
VAT-Value Added Tax
ZIPA-Zanzibar Investment Promotion Authority
ABSTRACTThe study planned to examine the level of which tax incentives impact revenue collections in Tanzania. Case study of this work was conducted at Tanzania Revenue Authority in the Large taxpayers Department.

This study comprises a total sample size of 50 respondents including 25 TRA staff and 25 employees and representatives of mining companies. The study used both primary and secondary data. Primary data were collected by questionnaire while secondary data were collected from TRA publications and other records. Data were analyzed using SPSS and the results were presented using tables and charts.

The findings indicated that tax exemptions and tax reliefs granted to mining sectors have negative impacts on revenue collections. It seems that instead of tax incentives being a motivating agent to tax collections, it harms revenue collections.

Basing on the findings obtained, it can be recommended that government need to review the provision of exemptions and tax reliefs and if necessary to remove them. Additionally, the government has to carry out periodic review of the continuance of existing tax incentives by assessing the extent to which they meet the stated criteria.

TABLE OF CONTENTSPages
TOC o “1-3” u CERTIFICATION PAGEREF _Toc520806219 h i
DECLARATION AND COPYRIGHT PAGEREF _Toc520806220 h ii
ACKNOWLEDGEMENT PAGEREF _Toc520806223 h iii
DEDICATION PAGEREF _Toc520806224 h iv
LIST OF ABBREVIATION PAGEREF _Toc520806225 h v
ABSTRACT PAGEREF _Toc520806226 h vi
TABLE OF CONTENTS PAGEREF _Toc520806227 h vii
LIST OF TABLE PAGEREF _Toc520806228 h x
LIST OF FIGURES PAGEREF _Toc520806229 h xi
CHAPTER ONE PAGEREF _Toc520806230 h 1
PROBLEM SETTING PAGEREF _Toc520806231 h 1
1.1 Introduction PAGEREF _Toc520806232 h 1
1.2 Background to the Study PAGEREF _Toc520806233 h 1
1.3 Problem Statement PAGEREF _Toc520806234 h 4
1.4 Objective of the Study PAGEREF _Toc520806235 h 5
1.4.1 General Objective of the Study PAGEREF _Toc520806236 h 5
1.4.2 Specific Objective of the Study PAGEREF _Toc520806237 h 5
1.5 Research Questions PAGEREF _Toc520806238 h 5
1.6 Importance of the Study PAGEREF _Toc520806239 h 6
1.7 Scope and Limitation of the Study PAGEREF _Toc520806240 h 6
1.8 Organization of the Study PAGEREF _Toc520806241 h 6
CHAPTER TWO PAGEREF _Toc520806242 h 8
LITERATURE REVIEW PAGEREF _Toc520806243 h 8
2.1Introduction PAGEREF _Toc520806244 h 8
2.2 Theoretical Literature PAGEREF _Toc520806245 h 8
2.2.1 Definition of Tax PAGEREF _Toc520806246 h 8
2.2.2 Value Added Tax PAGEREF _Toc520806247 h 9
2.2.3 Origin of VAT PAGEREF _Toc520806248 h 9
2.2.4 Scope of VAT PAGEREF _Toc520806249 h 11
2.2.5 Purpose of Tax PAGEREF _Toc520806250 h 12
2.2.6 Principles of Taxation PAGEREF _Toc520806251 h 12
2.2.7 The Value Added Tax system in Tanzania PAGEREF _Toc520806252 h 14
2.2.8 Tax Exemptions PAGEREF _Toc520806253 h 18
2.2.9 Tax Incentives PAGEREF _Toc520806254 h 21
2.2.10 Tax Incentives for Mining Companies PAGEREF _Toc520806255 h 22
2.2.11 Revenue Losses in the Mining Sector PAGEREF _Toc520806256 h 24
2.2.12 Tax relief in Tanzania PAGEREF _Toc520806257 h 25
2.3 Empirical Review PAGEREF _Toc520806258 h 26
CHAPTER THREE PAGEREF _Toc520806259 h 29
RESEARCH METHODOLOGY PAGEREF _Toc520806260 h 29
3.1Introduction PAGEREF _Toc520806261 h 29
3.2Research Design PAGEREF _Toc520806262 h 29
3.3.2 Sample Size and Methods PAGEREF _Toc520806263 h 31
3.4 Methods of Data Collection PAGEREF _Toc520806264 h 31
3.4.1 Primary Data PAGEREF _Toc520806265 h 31
3.4.2 Secondary Data PAGEREF _Toc520806266 h 32
3.4.3 Design of the Questionnaires PAGEREF _Toc520806267 h 32
3.5 Data Analysis PAGEREF _Toc520806268 h 32
CHAPTER FOUR PAGEREF _Toc520806269 h 33
RESEARCH FINDING AND ANALYSIS PAGEREF _Toc520806270 h 33
4.1Introduction PAGEREF _Toc520806271 h 33
4.2Study Findings PAGEREF _Toc520806272 h 33
4.3Respondents Profile PAGEREF _Toc520806273 h 33
4.3.1 Respondent’s Gender PAGEREF _Toc520806274 h 33
4.2.2 Age of Respondents PAGEREF _Toc520806275 h 35
4.2.3 Level of Education PAGEREF _Toc520806276 h 36
4.3 The Respondent’s Expressed Opinion PAGEREF _Toc520806277 h 38
4.3.1 TRA Employees’ Responses on Tax Exemptions PAGEREF _Toc520806278 h 38
4.3.1.1Import and Excise Duty PAGEREF _Toc520806279 h 38
4.3.1.2 Fuel Levy Exemptions PAGEREF _Toc520806280 h 39
4.3.1.3VAT Exemptions on Imports and Local Supplies PAGEREF _Toc520806281 h 39
4.3.1.4Government Awareness on Tax Exemptions PAGEREF _Toc520806282 h 39
4.3.1.5Level of Tax Exemptions In Tanzania PAGEREF _Toc520806283 h 40
4.3.2 TRA Staff Responses on Tax Reliefs PAGEREF _Toc520806284 h 41
4.3.2.1Number of Special Reliefs Provided to the Mining Company PAGEREF _Toc520806285 h 42
4.3.2.2 Tax Reliefs on VAT Enhances Investment in Mining Sector PAGEREF _Toc520806286 h 42
4.3.2.3Contributions of Mining Sector on the Government Revenue PAGEREF _Toc520806287 h 42
4.3.2.4Government Awareness on the Loss of Revenue Due to Tax Relief PAGEREF _Toc520806288 h 43
4.3.2.5Control of Tax Relief to Protect Government Revenue PAGEREF _Toc520806289 h 43
4.3.3 Tax Consultants, Auditors and Accountants Responses on Tax Exemptions PAGEREF _Toc520806290 h 44
4.3.3.1Import and Excise Duty PAGEREF _Toc520806291 h 45
4.3.3.2Fuel Levy Exemptions PAGEREF _Toc520806292 h 45
4.3.3.3VAT Exemptions on Imports and Local Supplies PAGEREF _Toc520806293 h 45
4.3.3.4Government Awareness on Tax Exemptions PAGEREF _Toc520806294 h 46
4.3.3.5Level of Tax Exemptions in Tanzania PAGEREF _Toc520806295 h 46
4.3.4 Tax Consultants, Auditors and Accounts Responses on Tax Reliefs PAGEREF _Toc520806296 h 47
4.3.4.1 Number of Special Relief provided to the Mining Companies PAGEREF _Toc520806297 h 48
4.3.4.2 Tax Relief on VAT Enhances Investment in Mining Companies PAGEREF _Toc520806298 h 48
4.3.4.3Contribution of Mining Sector on the Government Revenue PAGEREF _Toc520806299 h 48
4.3.4.4Government Awareness on the Loss of Government Revenue Due to Tax Relief PAGEREF _Toc520806300 h 48
4.3.4.5Control of Tax Relief to Protect Government Revenue PAGEREF _Toc520806301 h 49
CHAPTER FIVE PAGEREF _Toc520806302 h 51
CONCLUSION AND RECOMMENDATIONS PAGEREF _Toc520806303 h 51
5.1Introduction PAGEREF _Toc520806304 h 51
5.2Conclusions PAGEREF _Toc520806305 h 51
5.3Recommendations PAGEREF _Toc520806306 h 55
5.3 Limitation of the Study PAGEREF _Toc520806307 h 56
5.4 Suggestion for Further Research PAGEREF _Toc520806308 h 56
REFERENCES PAGEREF _Toc520806309 h 58

LIST OF TABLEPages
TOC “Heading 4” c “Table” Table 2.1:Tax Exemptions Trend PAGEREF _Toc520806209 h 19
Table 4.1: Distribution of Respondents by Gender PAGEREF _Toc520806210 h 34
Table 4.2: Age of Respondents PAGEREF _Toc520806211 h 35
Table 4.3: Respondent’s Level of Education PAGEREF _Toc520806212 h 36
Table 4.4: TRA Staff Responses on Tax Exemptions PAGEREF _Toc520806213 h 41
Table 4.5: TRA Staff Responses on Tax Reliefs PAGEREF _Toc520806214 h 44
Table 4.6: Tax Consultants, Auditors and Accountants Responses on Tax Exemptions PAGEREF _Toc520806215 h 47
Table 4.7: Tax Consultants, Auditors and Accountants Responses on Tax Relief PAGEREF _Toc520806216 h 50

LIST OF FIGURESPages
TOC “Heading 5” c “Figure” Figure 4.1:Distribution of Respondents by Gender PAGEREF _Toc520806217 h 34
Figure 4.2:Age of Respondents PAGEREF _Toc520806218 h 35

CHAPTER ONEPROBLEM SETTING1.1 IntroductionThis chapter introduces the context and key research problem. The chapter starts by presenting the background to the study followed by the statement of the research problem. The chapter further presents the research objectives, research questions, the importance of research, scope, and limitation of the study and the organization of the study.

1.2 Background to the StudyMost of the developing countries need to focus on public finance issues as the very important element to the success. For the effective public finance to play a great role in the economy there should be Foreign Direct Investment (FDI) and the local investment in which the Government should deliver income from its internal sources like taxes, foreign loans, and grants. Tanzania as among the developing countries has been facing the problem of deficit in which expenditure is always more than revenue collection and therefore affects one way or another for the Government to be able to meet its expenditures on public services such as education, infrastructures, health, security and other social services.

Note that, the only way for the Government to meet these expenditures of providing social services is through citizens and other members of the community to and national wise to contribute to the Government through payment of taxes, duties, levies and various licenses from the goods and services they obtain from the community.

Most developing countries including Tanzania opt to attract FDI by providing tax exemptions and relief in order to fascinate investment. The main reason is to allow the country to benefit from social and economic proceeds which are expected to be higher the incurred costs to attract these investments.

For example in Tanzania, the introduction of the New Value Added Tax (VAT) Act, 2014 which came into action effectively from 1st July 2015 has waived taxes on crucial goods and services such as agricultural implements and inputs, basic agricultural products and food for human consumptions, medicines and pharmaceutical products, education services, petroleum products and other inputs. Accordingly, the citizens who purchase these products are not subjected to tax.

Because no tax is paid on these purchases therefore it affects revenue collection. Note that tax revenue in the developing countries including Tanzania with low income is heavily depending on taxation especially on import duties and other direct and indirect taxes. In less developed countries, taxation is the major source of Government revenue that contributes about 80 percent of total Government revenue (IMF, 1989).

Economic growth in any country it is largely depending on an effective taxation that yields revenue to finance expenditures of the public sector. As a result, different countries undertake tax reforms in order to improve revenue collection and eliminate the tendency of donor dependency by the persistent problem of the budget deficit.

Although the Government efforts and several tax reforms that have been made in revenue collection, the Bank of Tanzania reports indicate that Government is still experiencing budget deficits which cause incapability for the Government to gather sufficient tax revenues to finance its spending as a result of growing dependence on donor funds.

Tanzania as the developing countries, its economic development programs are highly based on donor assistance. As per data obtained from the central bank of Tanzania (BoT) annual report 2015/2016, Tanzania government budget deficit for 2015 was TZS 3,420.00 billion which was 3.6 percent of GDP. The deficit was financed through domestic and foreign borrowings. Net foreign financing was TZS 1,128.90 billion, whereas net domestic borrowing was TZS 2,299.20.

1.3 Problem StatementBudgets of many countries depend on tax revenue collections. Therefore, when there is poor tax revenue collections, the economic growth of any country will be affected. In the first six months of 2016/17 (July-December), Tanzania Revenue Authority collected a total of 7.27 trillion shillings ($ 3.26 billion) compared to 6.44 trillion shillings collected in the same period in 2015/16 financial year, putting the increase at 12.74 percent. The Government of Tanzania aimed to collect a total of 15.1 trillion shillings from tax revenue in 2016/17 which was equivalent to 13.8 percent of Gross Domestic Product (GDP) up from an estimated 12.6 percent of GDP in 2015/16 (Reuters, 2017).

Tax revenue collection likely to be insufficient particularly when other sources of funding such like borrowings and other sources from private sector (World Bank group, 2015). Because of the difficulties involved in raising the substantial amount of revenue through taxation, the government of Tanzania decided to provide a wide range of tax incentives for the reason of attracting investors. Through this mechanism of providing tax incentives to the investors, the main reason is to attract investment and especially Foreign Direct Investment (FDI) and the main reason is to enjoy the benefit from social and economic returns that are expected to be higher than the cost incurred. The host country, in which FDI is attracted, tends to raise its income and other benefits delivered from the transfer of technology.

The assumptions behind is that, tax revenue losses will be compensated by the capital and jobs created which will improve the welfare of citizens and expand the economy of the country. The presence of tax exemptions in the developing countries including Tanzania has allowed a number of firms especially the mining companies to pay less tax.

For example, in the financial year, 2011/12 tax relief and exemptions amounted to TZS 1,016,320,300,000 were granted to the mining companies which were about 18% of total tax collections. This was an increase of 3% compared to the ratio of tax exemptions to total revenue collections in the financial year 2009/10 which was 15%.

Additionally, in the financial year 2012/13 TZS 1.5 trillion were lost through various tax relief and exemptions while in following financial year of 2013/14, TZS 1.8 trillion was declared by the Tanzania Revenue Authority as a revenue loss resulted from various tax relief and exemptions.

These exemptions and reliefs provided to the mining sectors have been major problems for the Government of Tanzania to finance its public expenditures like educations, infrastructures, welfares of the citizens and other expenditure of goods and services both in the development and recurrent budget.

Basing on this observation, this research intends to investigate the extent to which tax relief and exemptions (incentives) and their impacts in the revenue collections in Tanzania specifically on mining sectors.
1.4 Objective of the Study1.4.1 General Objective of the StudyThis study pursues to investigate the scope of which tax relief and exemptions (tax incentives) impact revenue collections by focusing the revenue collection in Tanzania from the extractive industry (minerals oil and gas).

1.4.2 Specific Objective of the StudyThe specific objectives of the study include the following:
To investigate the impact of tax exemptions on revenue collections.

To investigate the impact of tax relief on revenue collections.

1.5 Research QuestionsResearch questions include the following:
What is the impact of tax exemptions to revenue collections?
What is the impact of tax relief to revenue collections?
1.6 Importance of the StudyThe study aimed at finding out the extent to which tax relief and exemptions impact revenue collection in Tanzania. It focuses on how tax relief and exemptions affect revenue collections to the Government and the measures to be taken so as to increase the Government collections including the reduction of tax exemptions and relief in Tanzania and if necessary the government to make some tax reforms which can reduce or remove them.

The findings obtained from this study will help the Tanzania Revenue Authority to identify the impacts of tax exemptions and relief in revenue collection mechanism and help to come up with the solutions to eliminate and reduce some unnecessary incentives provided to mining companies which will boost the revenue collection in future.

The study also will provide the best alternative to the policymakers and recommend the best way to reduce tax exemptions and relief and the better way to increase revenue collections from the mining sectors. Also, this study serves a purpose for a researcher to attain and fulfill the requirements for Master of Corporate Management of Mzumbe University.

1.7 Scope and Limitation of the StudyThis study evaluates the extent to which tax relief and exemptions impact revenue collection in Tanzania. The study, however, is limited to the study of extractive industry to Tanzania economy. The extractive sector is selected because it is the one of the sectors that is subjected to tax exemptions and relief.

The limitation of this study, however, is in the area of methodological constraints in terms of which type of analytical technique is most appropriate for work. Additionally, because of funds and time constraints, the work is further limited to the selected organization.

1.8 Organization of the StudyThis study is organized in five chapters. The chapter one has introduced the study, it has presented the background to the study, statement of the problem, objectives of the study, research questions, significance and scope of the study.
Chapter two has presented the literature review from other scholars, it has begins by defining some of the key terms and concepts, additionally, the chapter presented the theoretical framework as well as empirical studies.
Chapter three has presented the methodology used in the study.

Chapter four has presents the research findings and analysis used and lastly is chapter five which has presented conclusions and recommendations of the study.

CHAPTER TWOLITERATURE REVIEW2.1IntroductionIn this chapter, the study looked at some definitions and concepts such as tax, principles, and purposes of tax, Value Added Tax, tax incentives, exemptions and tax reliefs.

2.2 Theoretical LiteratureThe theoretical literature seeks to review various theories and writings about the key terms and concepts such as tax, purposes of tax, principle of taxation, concept of Value Added Tax (VAT), concept of tax incentives, concept of tax exemptions, concept of tax relief, tax incentives for extractive companies and the revenue losses from the related sector.

2.2.1 Definition of TaxThe word tax has been defined by Wilkins, (1972) as confined to compulsory unrequited payments by individual and firms to the government. According to Nightingale, (2001), defines tax a compulsory contribution imposed by the government and while taxpayers may receive nothing identifiable in return for their contribution, they nevertheless have the benefit of living in a relatively educated, healthy and safe society. Further explains that taxation is part of the price to be paid for an organized society and identified reasons for taxation which are; provision of public goods, redistribution of income and wealth, promotion of social and economic welfare, economic stability and harmonization and regulation.

Lymer and Hancock (2002) define the term taxation as a compulsory levy imposed by a government on either income, expenditure or capital assets for which the taxpayer received nothing specific in return with the purposes of raising money for public expenditure. He further argued that a tax should be flexible so that they can be adjusted to changing conditions in order to counteract fluctuations in the level of economic activity and should be planned in such a way to minimize the disincentive effects to work and enterprise. Tax is fair if it provides benefits in proportion to payment and that for the system to work well there has to be some consensus and consent on the part of taxpayers. Tax plays a much larger role in the economy such as a provision of public goods, correct the effect of externalities, help to redistribute income and can be used to manage the level of demand to the economy. Therefore, a large proportion of the government’s revenue comes from taxes.

Betts, (1990) defined a word tax as a levy on individuals or corporate bodies by a central or local government in order to finance the expenditure of that government and also as a means of implementing its fiscal policy.

Further, Hancook (1999) also defined a tax as a compulsory levy imposed by the government on income, expenditure or capital assets, for which the taxpayer receives nothing specific in the return. He noted that the primary purpose of imposing a tax is to raise money for public purposes.

2.2.2 Value Added TaxVAT stands for Value Added Tax. It is a consumption tax charged on taxable goods, services immovable property of any economic activity whenever a value is added at each stage of production and at the final stage of the sale. VAT is charged on both locally produced goods and services and on imports. Value Added Tax is charged by persons registered for VAT only. (www.tra.go.tz).

2.2.3 Origin of the VATThe VAT was invented by Laure a French economist in 1953. It was introduced by the French Tax Authority with effect from 10th April 1954 for large businesses and extended over time to all business sectors and reached Africa through those countries which were colonized by France such as Ivory Coast in the year 1959, Senegal in 1960, Madagascar in 1969. Over the last 20 years, a large number of countries have implemented major tax reforms, mainly by adopting Value Added Tax (VAT).

As a result, at the beginning of the 2010s, more than 130 countries worldwide had VAT, and among the developing countries, around 70% (104 out of 144 countries) had adopted this kind of indirect taxation. According to Keen, M and B. Lockwood (2010) argued that VAT has spread in regional bursts, in countries participating in International Monetary Fund (IMF) programme and in countries with a low tax revenue performance in the past.

In additional, Richard M. Bird and Joseph L. Rotman (2005) claimed that the consistent support and advocacy of this form of taxation by IMF and others in a variety of countries like Latin America and then around the world are encouraged and facilitated by the adoption of VAT by countries with much less developed economic and administrative structures than those in original European Union member states.

In Tanzania VAT was established in July 1998. It is a tax imposed on the additional value of goods produced or service rendered. The current rate imposed on such additional value is 18 percentages.

2.2.4 Scope of the VATVAT shall be charged on any supply of goods, services and immovable property of any economic activity in Mainland Tanzania where it is a taxable supply made by a taxable person in the course of economic activity carried by him. The importation of taxable supply from any place outside Mainland Tanzania shall be zero-rated upon proof. VAT is chargeable on the taxable supplies of goods and services. The rates are 18% for standard rated supplies and 0% for exports of goods and services.

Registration for VAT in Tanzania is mandatory to every person upon attaining the registration threshold of 100 million in the period of twelve months and above or 50 million in the period of six months ending at the end of previous months. This condition applies to all types of registration except for professional service providers, Government entity or institution which carries on economic activity and intending traders after fulfillment of sufficient evidence such as contracts, tenders, building plans, business plans and bank financing. This guideline is required as per section 28 of the Value Added Tax Act, 2014.

2.2.5 Purpose of TaxSeveral governments impose a tax on the different reasons. Some of the scholars have pointed out the main reasons for imposing taxes. According to Nightingale, (2002) explained that the main reason for imposing taxes is to raise money for financing social services, especially social services which are provided by the state including health, defense, infrastructure, and education.

Also, the government uses the tax policy as a tool for making sure that there is a fair distribution of income. The state or government uses a progressive tax rate system as a way of ensuring that there is a fair distribution of income.

The government uses taxes to raise the share of the national cake going to the poor to improve their standard of living. Encourage investment (TRA annual report, 2004), such that tax can also be used to encourage investment through the provision of tax incentives.

2.2.6 Principles of TaxationWith regard to various reasons of imposing a tax, the tax system should consider various factors so as to be fair and in return to improve revenue collections according to Mpongoliana, (2000) the taxation proposes the following principle:
The principle of equity, which defines that people with the same amount of income, should pay the same amount of tax. It is however acknowledged that because of the diversity of tax bases used within the economy, and the fact that some of these bases are only elective (such as consumption taxes), it is very difficult to design taxes that will guarantee 100% horizontal and vertical equity. A point to be emphasized is that the divergence should not be substantial. Even those who say there cannot be equity in taxation agree that the tax must be fair.

Simplicity, the tax should be simple to ascertain and measure. This means that the law should be simple to be understood both by the taxpayers and administrators. The administration procedure must be simple for the taxpayers to comply with and for the administrators to supervise. A good system must, therefore, be fully transparent from policy formulation level through the tax enactments to the implementation level.

Economy; consideration of what it will cost to collect the tax is important in any tax system. Tax administration system should be least expensive in terms of both manpower and material. It does not make sense to spend for administration in excess of revenue collection. Unfortunately, the consideration of what it will cost to administer a tax system efficiently is sometimes wrongly interpreted to minimize cost. Thus, the purpose is not to minimize but rather to optimize the costs of collection.

Certainty; the imposition of any tax should yield the expected revenue in order to assist governmental future planning. A definitive advance forecast of revenue collections, therefore, assists plan implementation and success. Consequently, any taxes on commodities whose demand is inelastic would be such a sure source of revenue.

Convenience; this refers timing of payment and collection of the tax. The tax system that allows the payments of tax at the end of or provide for payment of tax can be regarded as convenient to the taxpayer. While the tax system that places heavy taxes on taxpayers after the consuming of the income creates inconveniences.

2.2.7 The Value Added Tax system in TanzaniaVAT system in Tanzania was introduced in 1997 following the recommendations of a study commissioned to study the ways of enhancing government revenue. The commission of inquiry into public revenue and taxation was appointed by the President of the United of Tanzania following the outcry of poor tax performance, fiscal problems coupled with persistent and growing budget deficit. This was implemented in 1997 (the act of Parliament, VAT Act, No. 24 of 1997) and it became in operation with effect from 1st July 1998 to replace some sales taxes, stamp duty, hotel levy and entertainment taxes. This Act has been into actions from 1st July 1998 up to 31st June 2015 after the new Value Added Tax Act 2014 passed by the Parliament in December 2014.

The introduction of VAT in Tanzania was a major step in the expansion of the tax base and improvement of tax collection, (Shekidele, 1996).

According to Faith ; Esmaeeilian, (2012), the term “Value Added Tax” means a contribution made by a firm at each stage of the production without intermediate inputs. This gives rise to Value Added Tax. It is levied at every stage of production and distribution chain in several countries. Most extractive companies such as mining and oil and gas sectors receive incentives so as to improve their operations for the purpose of contributing development to the country and improve collections.

However, there were three main advantages which support the idea of adopting this tax. These were: revenue potential such that VAT has extremely broad base yielding significant revenue for the government at low rates, administrative efficiency such that VAT is a self-policing tax in that it minimizes tax evasion, its neutrality from point of view.

According to Muganyizi, (2012), the VAT system in Tanzania like in most countries is a credit invoice consumption tax implemented on a destination principle. The VAT regime in Tanzania is a single regime set at 20 percent initially but was reduced to 18 percent in July 2009. Tanzania being a less developed country it exports minerals that are mine and provide special tax relief for oil and gas exploration companies to carry out their activities. Since exports are zero-rated supplies under the VAT regime, mining firms are net-refund claimers of almost all VAT paid on purchases (local purchases and importations) in the process of mining operations. Given the very large and frequent investment needs of the mining companies and oil and gas companies, effective tax administration has necessitated the creation of a special unit to handle mining companies in order to avoid delays associated with VAT refunds.

However, not all traders are registered for VAT. Only those that exceed the statutory registration threshold are eligible for registration. For example the repelled VAT Act, 1997 required all taxable persons with an annual taxable turnover of forty million shillings to be liable for VAT registration.

The new VAT Act, 2014 came into operation with effect from 1st July 2015. This aim to repeal and replace the old Value-Added Tax Act, 1997 which came into operation from July 1998. The enactment of the new VAT Act, 2014 was influenced by the need to broaden the tax base and the need for efficient administration of tax which the Value Added Tax Act, 1997 seems to have lacked.

According to VAT Act, 2014, the term “value added tax” means the tax imposed on taxable supplies or taxable imports, and includes an interest, fine or penalty payable in accordance with the provision of this Act.

While the new VAT Act, 2014 requires all taxable persons with an annual taxable turnover of 100 million to be liable for VAT registration which applies to all types of registration. This condition provides the exception for professional service providers, Government entity or institution which carries on economic activity and intending traders after fulfillment of sufficient evidence such as contracts, tenders, building plans, business plans and bank financing.

The main objectives of the new Value Added Tax Act, 2014 are the following:
to broaden the tax base
to align value added tax law with the international best practice
to reduce the power of the Minister for Finance in the administration of VAT
to address intra union trade issues between Mainland and Zanzibar and
Simplify administration and management of VAT.

2.2.8 Tax ExemptionsTax exemptions are one of the incentives in which mining, oil, and gas companies receive. According to Gauthier, (2001), Government of developing countries is much eager to attract investment in their countries by granting exemptions to large firms an incentive to boost investment whilst in other large firms see as the loophole to avoid paying taxes. The exemption granted either can cover corporate income tax, VAT and import duties or both of them to a specific firm.

According to a non-government organization, Uwazi (2010), tax exemptions are granted for a variety of reason. In Tanzania, exemptions may be given for the following reasons such as:
Where the foreign or official nature of the item in question does not permit tax for example consumption on internationally bound aircraft or goods consumed by the armed forces and diplomatic missions.

Where activities of certain organizations do not earn them a profit but have a direct benefit to society which the government may not be able to otherwise procure. This basis is used to grant exemptions to charities including religious organizations.

Where consumption of certain goods is thought to have a direct advantage to the public such as medicines for human and veterinary, firefighting vehicles, agricultural implements, transport services. Exempting these goods from taxes increases their consumptions which in return brings more benefits due to their progressive effects on society.

Where the Government wants to stimulate economic growth, it grants some exemptions to increase investment, employment, output growth and thus lead to more tax revenues in the long run. Groups of companies granted wide-ranging exemptions such as promising corporation taxes on profits and reduced import duties fall under this group. Most notable among these are companies established under the Export Processing Zones Authority Act (EPZA), mining companies and other companies which hold certificates of incentives from TIC and ZIPA.

As per a policy forum working group, (2013), has highlighted on Tanzania and the problem of tax exemptions that it has reached excessive heights and the government recognizes that they result in large loss of revenues that are severely needed for service delivery.

By referring to the speech by the minister of finance the late William Mgimwa during the 2013/14 Budget speech in financial year 2011/12, tax exemptions in Tanzania amounted to 4.3% of the gross domestic product (GDP) and the target in the medium term was to reduce them to 1%. To succeed this, however, will require strong actions because the trend show that exemptions are increasing over the years as per the table below indicating from TZS 680 million in the financial year 2009/10 to TZS 1.8 trillion in the financial year of 2011/12.

Table 2.1:Tax Exemptions TrendFinancial Year 2009-10 2010-11 2011-12
Exemptions granted (TZS) 680,667,900,000 1,016,320,300,000 1,806,203,559,827
Proportion of exemptions to actual collection 15% 18% 27%
The measures the minister stated would be required by the Government for the financial year 2013/14 included eliminating VAT exemptions on tourist services by revising the Tanzania Investment Act section 38 in order to reduce tax exemptions for deemed capital goods by retaining only a few which will stimulate strategic investment and continue improving the ability of Government officers including the Tanzania Revenue Authority (TRA) officers in order to develop their knowledge and skills with a view to reduce tax evasion and avoidance mostly on tricks regularly used by big companies particularly in communication, minerals and gas sectors including transfer pricing issues.

For the financial year 2013/14, the government planned to focus on tax exemptions which were not productive, unnecessary and prone to misuse. In that respect, the Government was undertaking a comprehensive review of the Value Added Tax Act and the study on the tax exemptions with a view to assess costs and benefits.
From the financial years 2009 to 2003 the government continues losing billions of shillings annually through various tax exemptions. For example, in the financial year, 2012/13 TZS 1.5 trillion was lost through various tax exemptions while in 2013/14 the Tanzania Revenue Authority (TRA) reportedly lost 1.8 trillion due to various exemptions.

However efforts have always been done for the financial years 2015/16 and 2015/17 to ensure that unnecessary tax exemptions are reduced by making several tax reforms and by introducing the new Value Added Tax Act, 2014.

According to the speech by the minister of finance Hon. Dr. Philip I. Mpango during the 2016/17 budget speech in financial year 2016/17 pointed that the fiscal policies for the same period focused on efforts that directed at reducing tax evasion and plugging loopholes for tax avoidance, to create new sources of revenue and insist the use of Electronic Fiscal Devices (EFDs) in order to increase revenue collection and in the same spirit to control unnecessary expenditure.

Also, the government aimed with continuing widening tax base including formalization of the informal sector, strengthening monitoring of revenue collection in government institutions and agencies, continue with measures to control and reduce tax exemptions and continue strengthening management and undertake frequent inspections at the ports, airports and border posts to ensure appropriate tax collection.
In ensuring effective collection of domestic revenue, policies for 2015/2016 aimed at minimizing unproductive tax exemptions, increasing the use of electronic systems in revenue collections and widening revenue base. During the period between July 2015 and April 2016, tax revenue amounted to shillings 10.17 trillion; equivalent to 100 percent of the target was collected.

For the period of ten months of implementing the 2015/16 budget, the Government recorded several achievements notwithstanding the challenges encountered. One of them was the increased tax revenue collection from an average of shillings 904.0 billion per month in 2014/15 to shillings 1.02 trillion per month during the same period in 2015/16. This was achieved after the introduction of the new Value Added Tax Act, 2014 which aims to broaden the tax base by eliminating some of the tax exemptions and special tax relief.

Notwithstanding the aforementioned achievement, several challenges are still prevalent and these include; tax evasion involving collusion between businessmen and unethical tax collectors, low awareness of the new Value Added Tax Act of 2014, low compliance by businessmen in the use of EFDs coupled with citizens’ culture of not demanding EFD receipts upon purchase of goods or services, complex environment in collecting tax from the informal sector and mismatch between revenue and expenditure arising from increased demand for improvement of infrastructure such as water, railway, ports, airport and roads.

2.2.9 Tax IncentivesAccording to a 2012 report by tax justice Network-Africa and ActionAid, a tax incentive is a deduction, exclusion or exemption from a tax liability offered as an incentive to engage in an identified activity such as investment in capital goods for a certain period.

Thus, they are the fiscal form of investment incentives and include corporate income tax holidays and reductions in tax rates. Non- fiscal or non-tax incentives comprise direct subsidies like government grants, loans, and guarantees for target projects. The main aim of tax incentive is to attract FDI and /or promote specific economic policies such as to encourage investment in certain sectors.

2.2.10 Tax Incentives for Mining CompaniesAccording to a 2012 report by tax justice Network-Africa and ActionAid, mining companies enjoy various tax incentives and exemptions which are in their Tanzania Investment Center certificate of incentives which include the following:
Zero import duty on fuel (compared to the standard current levy at that time of TZS 200 per liter) and on imports of mining-related equipment during prospecting and up to the end of the first year of production after which they pay 5 percent.

Special VAT Relief, which includes exemption from the VAT on imports and local supplies of goods and services to mining companies and their subcontractors.

The ability to offset against taxable income the cost of all capital equipment (such as machinery or property) incurred in a mining operation.

A reduced rate of stamp duty at 0.3 percent, this included in several mining agreements signed between the government and the mining companies even though the rate of stamp duty is set by law at 4 percent.

A maximum payment of local government taxes of up to $200,000 a year which is lower than the 0.3 percent of turnover required by the law.

Depreciation allowances for depreciable assets (a deduction equal to the amount of total capital expenditure equivalent to 100% depreciation allowance) in the year of expenditure which also can be carried forward and
Import and excise duty for mining equipment at 0% during exploration and mine development up to the first anniversary of commercial operation, after which a cap limit of 5% applies an exemption from capital gains tax.

2.2.11 Revenue Losses in the Mining SectorConferring to the policy forum, ActionAid, tax justice Network-Africa, (2012), explained Tanzania as one of the African’s largest gold producers; the expectation has been that the mining would contribute significantly to its economic development whereby this expectation has not yet been fulfilled.

Also, the International Monetary Fund (IMF) noted that gold exports have risen from around US$ 500 million to US$ 1.5 billion in the last five years due to rising gold prices, but the government revenues have remained at around US$ 100 per year. This is large because of the corporate income tax holidays provided to mining companies. In fact, none of the existing gold projects have paid material income tax to date according to IMF report. It was further reported that mining revenues will not grow much in the near future. The IMF report argued that the growing mining sector has so far had a little net fiscal impact and this is unlikely to change in the coming years partially because of largely embedded tax holidays.

In 2010 the government of Tanzania introduced a new Mining Act, 2010 although the existing gold mines remain governed by their respective agreements signed prior to the law currently in force. Revenue losses from tax incentives granted to mining companies are significant, although the overall figures have never been calculated, although selected examples are quoted as hereunder:
According to the Bomani Commission, it was estimated that the government lost TZS 39.8 billion in 2006/07 and TZS 59 billion in 2007/8 just as a result of fuel levy exemptions granted to the six large mining companies. As of late 2011, mining companies were making claims to the government for refunds totaling USD 274 million associated to their fuel levy exemptions for the period since 2002.

Mining companies have special ownership of their operations and the minerals recovered and the power to dispose of them as they wish including to transfer those rights to other companies without incurring capital gains tax. Meaning that the practice of buying and selling mining operations is legal and very profitable.

In addition, mining companies’ ability to offset against their taxable income the full costs of their expenditure on items such as plant and machinery has led to the continuous declaration of tax losses, and thus non-payment of corporate income tax. In response to this in 2008, the government introduced an alternative minimum tax of 0.3% of turnover payable when companies declare three consecutive years of tax losses, although it is likely that revenues from this tax are far lower than the losses caused by the capital allowances.

The Tanzania Minerals Audit Agency (TMAA) in 2010 conducted an audit for 12 mining companies and reported audit queries comprising over-declaration of capital allowances and operating expenditures of a total of $ 705.8 million implying a tax liability of about $ 176 million. This was a first-time TMAA conducted audits on mining companies. This indicates that similar apparent over claims were made by some mining companies in previous years.
2.2.12 Tax relief in TanzaniaTax relives are provided in order to improve revenue collections. This research is conducted to measure the impact of Value Added Tax (VAT) relief and exemptions to revenue collection in Tanzania. Thus tax incentives may be given in form of tax relief so as to facilitate investment.

According to Agyei & Gyamerah (2014) defined tax relief as a legally approved allowance intended to reduce one’s taxable income and thereby lessen the tax burden.

The third schedule of the repealed Value Added Tax, R.E 2006 provided some goods or services which were given special relief from the VAT and included some of the following:
Supplies or importation of goods or services under a technical aid or donor-funded agreement as far as that agreement provides for relief from taxation in the United Republic of Tanzania.

Importation by or supply to a registered licensed drilling, mining, exploration or prospecting company of equipment to be used solely for drilling, mining, exploration or prospecting activities.

The importation by or supply of goods or services to any organization holding a special Agreement to which the Government of the United Republic of Tanzania or established under an Agreement to which the Government of the United Republic of Tanzania is a party so long as that Agreement provides for relief from taxation and the importation by or supply of capital goods to any person.

The importation or supply to a charitable organization holding special Agreement with the Government of the United Republic of Tanzania, of goods or services specified in that Agreement providing for a relief from taxation.

According to the new VAT Act, 2014 section 95(2) together with the Value Added Tax (General) Regulation, 2015 regulation 33 states clearly that VAT relief granted under the repealed Act with respect to agreements entered into by the government for exploration and prospecting of minerals, oil and gas before commencement of the new VAT Act, 2014, shall continue to apply provisions of the repealed Act, of 1997.

Furthermore, the reliefs granted to investors licensed under the Special Processing Zones Act and Economic Processing Zones Act shall continue to apply accordingly.

The new VAT Act, 2014 is silent on incentives granted to the investors under the Tanzania Investment Act (TIA). It is unclear whether the VAT incentives under the TIA will continue to be granted.

2.3 Empirical ReviewIn conducting research on the impacts of Value Added Tax (VAT) relief and exemptions to revenue collection in Tanzania, it was important to review the relevant empirical studies and related works on the subject matter to develop a basis of this study. Several scholars have tried to look into tax reliefs and exemptions and how these are utilized. However, some of these justifications stated by the several researchers in view of the study are relevant. Therefore, this subsection provides an empirical review on the general tax system and administration.

According to Luoga (1995), argued that the tax system in Tanzania allows any profitable corporations and individuals to avoid paying a fair share of tax, year after year. Those who are able to use special tax breaks comfortably shift the burden to other less able to carry. Over the years, the system has become an irrational blanket of special incentives, substantial deductions, unrestricted exemptions and dubious remissions.

Frank T. (2005) in his study on Tax Reforms and its impacts on increasing revenue in Tanzania found that out that tax exemptions and tax holidays were given to investors among other factors are highly contributing towards the low percentage of collection. The study did not, however, show the amount of revenue gap from these tax exemptions and holidays given to investors. Benefit increasing to the government and the Tanzania economy, which might be worth the revenue gap forfeited. However, these can be confirmed from by the findings of this study.

According to Osoro (1995), argued that the tax administration system in Tanzania is weak, inefficient and apparently corrupt. He further explained that major characteristics of Tanzania tax system are that it allows for various and liberal exemptions. Most of these exemptions apply to both indirect and direct taxes.

The major problem with exemptions is that they erode the tax base thus affect revenue productivity of taxes. He also emphasized on the impact of tax exemptions on the revenue productivity, the same could have been done on tax reliefs an area which this study aims to focus on.

Manento (1994), pointed out that a poor tax administration is characterized by multiplicity of taxes, rather than broad tax base, lack of skilled and competent manpower, poor working environment such as low salaries, lack of modern equipment such as computers, poor organization structure, poor tax structure which entails numerous exemptions, many loopholes which encourages tax avoidances and evasions, unclear regulations and circulars and lack of commitment to revenue staffs.
However, some of the measures have been taken by Tanzania Revenue Authority to rectify the above anomalies in which the new VAT Act, 2014 and the Tax Administration Act, 2015 have been introduced in order to broaden the tax base and at the same time the new Acts have introduced measures and efforts that are directed at reducing tax evasion and plugging loopholes for tax avoidance and reducing unnecessary tax exemptions and reliefs.

CHAPTER THREERESEARCH METHODOLOGY3.1IntroductionThis chapter presents the methods, procedures, and techniques that employed in conducting the research study. This chapter highlights on research study design, population and sampling procedures, data collection methods and data analysis that employed in the research study.

According to Kothari (2004), research methodology is various steps that are generally adopted by a researcher in studying his research problem along with the logic behind them.

3.2Research DesignThis is an overall plan for obtaining answers to the questions being studied and for handling some of the difficulties encountered during the research process as explained by Polit (2004).

A research design also involves organizing the collection and analysis of data to provide the information which is required. As explained by Kothari, (1990) and Cooper, (1998), different types of research designs can be used including exploratory, casual, experimental and comparative research designs depending on the nature and purpose of a particular study.

This study employed the exploratory research design in order to get understandings into the different issues as they exist in Tanzania which is concerning with the impacts of tax exemptions and reliefs towards revenue collections. The design included the investigation on the extent of which revenue that the government sacrifices due to tax exemptions and reliefs in the mining industry as well as exploration contribution that accrues to be the Tanzania economy from the mining sector regardless of the forgone tax.

This considered as a suitable approach because exploratory research designs are proper for exploratory studies like this one whose main emphasis on the discovery insight, Saunders, (2000).

3.3 Population and Sampling
3.3.1 Target Population
According to Polit ; Hungler, (1999), they refer population as an aggregate or totality of all the objects, subjects or members that conform to a set of specifications. In this study, the target population mainly will constitute the employees of Tanzania Revenue Authority and mining company’s employees represented by tax consultant, auditors, and accountants.

3.3.2 Sample Size and MethodsThe sampling frames for the research were the employees of the selected mining companies and employees from the Tanzania Revenue Authority. The population in this research study covered six large mining companies in Tanzania namely; Shanta Mining Company Limited, Geita Gold Mine, Bulyanhulu Gold Mine, Pangea Minerals Limited, North Mara Gold Mining Limited and ABG Exploration which are controlled by Large Taxpayer Department under the Tanzania Revenue Authority.

3.4 Methods of Data CollectionThe methods of data collection in this research study comprised of primary and secondary data.

3.4.1 Primary DataKothari, (2004), defined primary data that are those data which are collected afresh and for the first time, and thus happen to be original in character. This study adopted questionnaires as the main instrument for primary data collection. In order to achieve the objective, 50 questionnaires were provided to the mining company’s employees represented by tax consultants, auditors, and accountants as well as employees from the Large Taxpayers Department of the Tanzania Revenue Authority were served with 50 questionnaires.

3.4.2 Secondary DataAccording to Kothari, (2004), secondary data are those which have already been collected by someone else and passed through the statistical process. In this research study, secondary data were collected from the internet and other TRA publications reports. The aim of collecting secondary data was to complement information that was obtained from primary data.

3.4.3 Design of the QuestionnairesSanga (1991) defined questionnaire as a self-administered schedule of questions and statements. It is a special interview schedule, which is completed by the respondent himself instead of the interview. It consists of a number of questions printed or typed in a defined form or set of the forms.

In this research study, questionnaires were designed into three main sections. The first section included personal data that was used to assess the personal information of the respondents including gender, age, and level of education. The second section was used to find out the respondents perception regarding tax exemptions provided to mining sectors and the last section was used to find out respondents perception regarding tax reliefs on the mining sector. This instrument used as the main tool for collecting primary data, the Likert rating scale which asks respondents how strongly they agree (5) or strongly disagree (1) was used.

3.5 Data AnalysisData analysis is the process which contains a number of closely interrelated operations which are performed with the purposes of summarizing the collected data and organizing them in such a way that they answered the research questions, Kothari, (1990). In this research, study questionnaires were summarized and analyzed using the Statistical Package for Social Scientist (SPSS). Tables and figures were used to present the research findings.

CHAPTER FOURRESEARCH FINDING AND ANALYSIS4.1IntroductionThis chapter signifies data analysis and presentation of findings collected from mining companies and Tanzania Revenue Authority – Large Taxpayers Department. This chapter attempts to analyze the data in a critical analysis in order to obtain information that could provide answers to the research objective to the extent to which tax exemptions and relief impacts revenue collections in Tanzania.

4.2Study FindingsA total of 40 questionnaires were directed to the mining company’s employees and TRA staff employees. The only 40 questionnaires were usable due to different reasons. Two groups of respondents were involved, the first group of respondents was from mining companies represented by tax consultants, tax auditors and accountants and they were 16 of all respondents. And the second group of respondents was for TRA employees and they were 24 of all respondents.

4.3Respondents ProfileThis part describes the general characteristics of the respondents comprising tax auditors, tax consultants, accountants and TRA employees representing the mining sector which provide information useful information for the research study. The sample profile of the respondents is given in terms of gender, age, their level of education and professional.

4.3.1 Respondent’s GenderOne of the sample characteristics obtained from the field was the gender of the respondents. In both groups of the respondents (TRA employees and mining representatives), the majority was men as shown in table 2 below:
Table 4.1: Distribution of Respondents by GenderSex TRA staff Tax consultants, auditors and accountants Total
Frequency Percentage Frequency Percentage Frequency Percentage
Male 13 52.2 10 64.7 23 57.5
Female 11 47.8 6 35.3 17 42.5
Total 24 100 16 100 40 100
Source: Data from field
Figure 4.1:Distribution of Respondents by Gender
Source: Data from Field
The table above shows that 52.2% of the TRA employees respondents were males while 47.8% were females. Auditors, tax consultants, and accountants representing mining companies in which male respondents were 64.7% while females were 35.3%. Though it is observed that the number of men respondents is slightly higher than that of the female for both TRA employees and mining companies’ representatives, this does not necessarily mean that males were more cooperative than men.
4.2.2 Age of RespondentsAge distribution of the respondents has been analyzed in table 3 below. Out of the total number of respondents for both TRA employees and mining representatives, 23 respondents were between 20-35 years which represents 57.5% of respondents, 13 respondents fall between 36-50 years representing 32.5% of the respondents and the last group was for respondents of above 51 years which were only 4 respondents representing 10%.

Table 4.2: Age of RespondentsAge TRA Employees Tax consultants, auditors and accountants Total
Frequency Percentage Frequency Percentage Frequency Percentage
20-35 years 14 58.3 9 56.3 23 57.5
36-50 years 7 29.2 6 37.5 13 32.5
Above 51 years 3 12.5 1 6.25 4 10
Total 24 100 16 100 40 100
Source: Data from field
Figure 4.2:Age of Respondents
Source: Data from field
The above analysis indicates that many workers are of the medium age that is between 20 – 50 years of age. It is widely believed that people under this age are normally more active and responsible at this age. Basing on this, one can argue that they are more aware of the tax exemptions and relief provided under the VAT Act.
Further findings indicated that there were few TRA staff and mining representatives with the age above 51 years as this group represents only 10% of the total respondents. Respondents under this group are more knowledgeable in tax laws and possibly they may be more analytical basing on their experience.
The above analysis indicates that all age categories of the respondents were included in the sample studied, therefore the analysis and findings of this study will reflect the opinions of different age groups.

4.2.3 Level of EducationIt was significant to assess the knowledge, skills and competencies of TRA staff, tax consultants, auditors, and accountants. One of the prerequisites in the proper execution of tax and general revenues was education qualification and skills of the respondents. Therefore it was important for this research study. Table 4 below analyses the respondent’s education level.

Table 4.3: Respondent’s Level of EducationLevel of education TRA officials Tax consultants, auditors and consultants
Diploma 10% 0%
Degree education 90% 100%
Total 100% 100%
Source: Data from field
The graph 1 above shows that 90% of the TRA respondents were educated up to the degree level while 10% were in college, whereas for the side of tax consultants, auditors, and accountants 100% of respondents were having the degree. The information received indicated that most of the respondents were knowledgeable about the tax exemptions matter. From the analysis above, interpretations obtained from the two groups revealed that these are professionals who are competent and highly educated people and hence experienced tax issues and their independent views are more reliable.

4.3 The Respondent’s Expressed OpinionOne of the research objectives was to understand the extent of which tax incentives impacts revenue collection. Therefore the objective was to explore the opinion of TRA staff respondents and mining companies represented by tax consultants, auditors, and accountants.

4.3.1 TRA Employees’ Responses on Tax ExemptionsTable 4 below provides answers from TRA employees and the specific questions addressed to them concerning the specific objective on the impacts of tax exemptions in revenue collections mainly for mining companies by considering tax exemptions they have received from the government, it show the number and the percentage of respondents towards the questions addressed to them as follows:
4.3.1.1Import and Excise DutyThe table 4 below shows the perception of TRA staff regarding whether import and Excise Duty for mining equipment at 0% during exploration and mine development adversely affect revenue collections. The study indicates that 3 respondents out of 24 which is equivalent to 12.5% strongly agreed with the given statement, 12 respondents equivalent to 50% agreed on the statement while 25% and 12.5% disagreed and strong disagreed on the point that import and Excise Duty for mining equipment at 0% during exploration and mine development negatively affects revenue collection. On the other side, none of the respondents were neutral to the statement given.

4.3.1.2 Fuel Levy ExemptionsThe table 4 below indicates that majority of the respondents (13) equivalent to 54.2 % strong agreed that fuel levy exemptions granted on mining companies positively affect revenue collections, 6 respondents which are equivalent to 5% agreed to the given statement while 12.5% and 8.3% disagreed and strongly disagreed on the statement given that fuel levy exemptions granted on mining companies positively affect revenue collections. None of the respondents were neutral to the given statement.

4.3.1.3VAT Exemptions on Imports and Local SuppliesTable 4 below provides the perception of TRA staff on whether exemptions from the VAT on imports and local supplies of goods and services to mining companies and their subcontractors positively affect revenue collections. From the statement given, majority of the respondents (16) out of 24 respondents which is equivalent to 66.7% strongly agreed, 5 respondents equivalent to 20.8% agreed with the given statement while 8.3% of the respondents disagreed with the statement and 4.2% of the respondents were neutral to the given statement on whether the exemptions from VAT on imports and local supplies of goods and services to mining companies and their subcontractors positively affect revenue collections.

4.3.1.4Government Awareness on Tax ExemptionsTRA staff provides the perception regarding whether the Government recognizes that tax exemptions given to mining companies result to the loss of revenues as provided in Table 4 below. From the given statement, 15 respondents out of 24 which is equivalent to 62.5% agreed with this statement, 33.3% strongly agreed with the given statement and 4.2% were neutral. None of the respondents were agreed or strongly agreed with the statement on whether the Government recognizes that tax exemptions given to mining companies result to the loss of revenues.

4.3.1.5Level of Tax Exemptions In TanzaniaFrom the table 4 below it revealed that majority (13) of correspondents representing 54.1% agreed on that tax exemption in Tanzania has reached exorbitant heights that result in the loss of Government revenue. 41.7% of the respondents strongly agreed to the statement given while 4.2% of the respondents disagreed that tax exemptions in Tanzania have reached exorbitant heights that result in the loss of Government revenue. None of the respondents were neutral regarding on the statement that tax exemptions in Tanzania have reached exorbitant heights that result to the loss of Government revenue.

Basing on the observations as analyzed in table 4 below, most of the respondents agreed that tax exemptions received by mining companies negatively affect revenue collections. Tax exemptions do not favor Government revenue collection through taxation.

Table 4.4: TRA Staff Responses on Tax ExemptionsS/N Statements Strong agree Agree Neutral Disagree Strong disagree
1 Import and Excise duty for mining equipment at 0% during exploration and mine development negatively affect revenue collections. 3(12.5%) 12(50%) – 6(25%) 3(12.5%)
2 Fuel levy exemptions granted on mining companies positively affect revenue collections. 13(54.2%) 6(25%) – 3(12.5%) 2(8.3%)
3 Exemptions from the VAT on imports and local supplies of goods and services to the mining companies and their subcontractors positively affect revenue collections. 16(66.7%) 5(20.8%) 1(4.2%) 2(8.3%) –
4 The Government recognizes that tax exemptions given to mining companies result in the loss of revenue. 8(33.3%) 15(62.5) 1(4.2%) – –
5 Tax exemptions in Tanzania have reached excessive heights that result in loss of government revenue. 10(41.7%) 13(54.1%) – 1(4.2%) –
Source: Field Data, 2018
4.3.2 TRA Staff Responses on Tax ReliefsTable 5 below shows the responses from TRA staff and the specific questions addressed to them concerning the specific objective on the impacts of tax reliefs in revenue collections specifically for mining companies by considering tax reliefs they obtained from the Government. The table shows the number and percentage of the respondents towards the questions addressed to them.

4.3.2.1Number of Special Reliefs Provided to the Mining CompanyFrom the table 5 below, majority of the respondents (16) out of 24 which is equivalent to 66.7% disagreed on the statement that number of special relief items given to mining activities as required by law positively affects government revenue collections, 29.2% strongly agreed on the stamen while 4.1% of the respondents were neutral on the statement was given. None of the respondents agreed that the number of special relief items given to mining activities as required by law positively affects government revenue collections.

4.3.2.2 Tax Reliefs on VAT Enhances Investment in Mining SectorOne of the tax incentives for the mining company’s investors is to enjoy special VAT relief to enhance their investment. Respondents were questioned if tax reliefs on the VAT increase investment in the mining sector that positively affect revenue collection. From the table 5 below, the majority of the respondents (15) out of 24 equivalent to 62.5% strongly disagree that tax relief (VAT) raises investment in the mining sector that positively affect revenue collection. On the other side, 12.5% and 25% strongly agreed and agreed on the given stamen. None of the respondents were neutral on the statement on whether or not tax relief (VAT) raises investments in the mining sector that positively affect revenue collection.

4.3.2.3Contributions of Mining Sector on the Government RevenueTRA employees were asked to provide their views on whether mining sectors contribute significantly to the increase in government revenue for the tax relief provided to them as indicated in table 5 below. Findings obtained show that majority of the respondents (12) out of 24 equivalent to 50% strongly disagree with this statement.
In another hand, 25% of the respondents disagree with this statement while 4.7% and 12.5% strongly agree and agree that tax relief (VAT) raises investment in the mining sector that positively affect revenue collection. Furthermore, 8.3% of the respondents were neutral on whether tax relief (VAT) raises investments in the mining sector that positively affect revenue collection or not.

4.3.2.4Government Awareness on the Loss of Revenue Due to Tax ReliefTable 5 below shows that majority of respondents (12) out of 24 equivalents to 50% agreed that Government is aware of how much revenue is lost through tax relief, 29.2% of the respondents strongly agreed on the statement while 12.5% and 8.3% were disagreed and strongly disagreed that Government is aware of how much revenue is lost through tax relief. None of the respondents were neutral to the given statement.

4.3.2.5Control of Tax Relief to Protect Government RevenueTable 5 below indicates the perception of TRA staff respondents regarding whether control over tax reliefs provided to the mining companies is well implemented to protect Government revenue. From these findings, 50% of the respondents (12) out of 24 agreed to the given statement, 25% of the respondents strongly agreed while 20.8 % disagreed. On the other hand, 4.2% of the respondents were neutral on whether control over tax relies provided to the mining companies is well implemented to protect Government revenue.

Basing on the observations obtained and analyzed in table 5 below, tax reliefs do not favor government revenue collection through taxation. Most of the TRA respondents agreed that tax reliefs received by mining companies do not favor government revenue collections.

Table 4.5: TRA Staff Responses on Tax ReliefsS/N Statements Strong agree Agree Neutral Disagree Strong disagree
1 The number of special relief items given to the mining activities as required by law positively affects government revenue collections. – – 1(4.1%) 16(66.7%) 7(29.2%)
2 Tax relief (VAT) raises investment in the mining sector that positively affect revenue collection. 3(12.5%) 6(25%) – 15(62.5%) –
3 The mining sector contribute significantly to increase the government revenue given the tax reliefs provided to them. 1(4.7%) 3(12.5%) 2(8.3%) 6(25%) 12(50%)
4 Government is aware of how much revenue is lost through tax relief. 7(29.2%) 12(50%) – 3(12.5%) 2(8.3%)
5 Control over tax reliefs given to the mining companies is well performed to protect government revenue. 6(25%) 12(50%) 1(4.2%) 5(20.8%) –
Source: Field Data, 2018
4.3.3 Tax Consultants, Auditors and Accountants Responses on Tax ExemptionsTable 6 below shows responses from tax consultants, auditors, and accountants representing mining companies. Specific questions were addressed to them regarding the specific objective of the impact of tax exemptions in revenue collections specifically for mining companies. The findings were analyzed in table 6 below indicating the number and percentage of respondents towards the questions addressed to them. The findings were as follows;
4.3.3.1Import and Excise DutyFindings obtained from tax consultants, auditors and accountants representing mining companies regarding whether import and Excise Duty for mining equipment at 0% during exploration and mine development negatively affect revenue collections were analyzed in table 6. It was revealed that majority of respondents (13) out of 16 equivalent to 81.2% agreed with the given statement while 6.3% and 12.5% of respondents were disagreed and strongly disagreed with the given statement. None of the respondents were neutral on the statement that import and Excise Duty for mining equipment at 0% during exploration and mine development negatively affect revenue collection.

4.3.3.2Fuel Levy ExemptionsTable 6 below provides the perception of mining company representatives in which only 1 respondent out of 16 equivalents to 6.3% strongly agreed that fuel levy exemptions granted on mining companies positively affect revenue collection while the majorities which are 56.2% and 37.5% of the respondents disagreed and strongly disagreed with the statement provided. None of the respondents were neutral on whether fuel levy exemptions granted on mining companies positively affect revenue collection.

4.3.3.3VAT Exemptions on Imports and Local SuppliesThe table 6 below has analyzed the perception of respondents such as tax consultants, auditors, and accountants representing mining companies regarding whether exemptions from the VAT on imports and local supplies of goods and services to mining companies and their subcontractors positively affect revenue collections. The findings obtained show that majority of respondents (11) out of 16 equivalents to 68.8% disagreed on the statement given and 12.5% were strongly disagreed while 18.7% of respondents agreed with the given statement. None of the respondents were neutral nor strongly agreed with the given statement.

4.3.3.4Government Awareness on Tax ExemptionsPerceptions of tax consultants, auditors and accountants are provided in table 6 below regarding whether the government is aware that tax exemptions given to mining companies result to the loss of government revenue. The findings show that majority of the respondents (12) out of 16 equivalent to 75% agreed that the government knows that tax exemptions given to mining companies result in the loss of revenue. Only 12.5% of the respondents strongly agreed on the given statement while 12.5% of other respondents disagreed on the given statement. None of the respondents were neutral or strongly agreed with the given statement.

4.3.3.5Level of Tax Exemptions in TanzaniaTable 6 below shows that majority of the respondents (15) out of 16 equivalents to 93.7% agreed that tax exemptions in Tanzania have reached an exorbitant level that results in loss of government revenue while 6.3% of the respondents disagreed on the given statement. None of the respondents were neutral, strong agreed neither strongly disagreed with the given statement.

Basing on the findings and observation as analyzed in table 6 below, most of the respondents representing mining companies agreed that tax exemptions received by mining companies negatively affect revenue collections. Tax exemptions do not favor government revenue collection through taxation.

Table 4.6: Tax Consultants, Auditors and Accountants Responses on Tax ExemptionsS/N Statements Strong agree Agree Neutral Disagree Strong disagree
1 Import and Excise Duty for the mining equipment at 0% during exploration and mine development negatively affect revenue collection. – 13(81.2%) – 1(6.3%) 2(12.5%)
2 Fuel levy exemptions granted on the mining companies positively affect revenue collection. 1(6.3%) – – 9(56.2%) 6(37.5%)
3 Exemptions from the VAT on imports and local supplies of goods and services to the mining companies and their respective subcontractors positively affect revenue collections. – 3(18.7%) – 11(68.8%) 2(12.5%)
4 The government knows that tax exemptions given to the mining companies result in the loss of revenue. 2(12.5%) 12(75%) – 2(12.5%) –
5 Tax exemptions in Tanzania have reached exorbitant level that result in loss of the government revenue. – 15(93.7%) – 1(6.3%) –
Source: Field Data, 2018
4.3.4 Tax Consultants, Auditors and Accounts Responses on Tax ReliefsTable 7 below shows responses from tax consultants, auditors and accountants and the specific questions addressed to them regarding the specific objective of the impacts of tax reliefs in revenue collections specifically for mining companies by considering tax reliefs they received from the government. These findings are presented in numbers and percentages of respondents towards the questions addressed to them as explained below;
4.3.4.1 Number of Special Relief provided to the Mining CompaniesTable 7 below shows that 25% of the respondents agreed that the number of special relief items given to mining activities as required by law positively affects government revenue collections. Majority of the respondents 75% disagreed with this statement while neither of the respondents was neither neutral, strong agreed neither strong disagree.

4.3.4.2 Tax Relief on VAT Enhances Investment in Mining CompaniesRespondents from the mining company’s representatives were asked if tax relief on VAT enhances investment in the mining sector that positively affect revenue collection. Table 7 below shows that majority of the respondents (14) out of 16 equivalents to 87.5% and 12.5% disagreed and strongly disagreed to the given statement. None of the respondents agreed on neither neutral on the statement that tax reliefs (VAT) enhance investment in the mining sector that positively affect revenue collection.

4.3.4.3Contribution of Mining Sector on the Government RevenueTable 7 below analyzed the findings obtained from the perception of tax consultants, auditors, and accountants on the statement that the mining sector contributes significantly to increase in government revenue given the tax reliefs provided to them. From the findings, 11 respondents out of 16 equivalents to 68.7% disagreed with this statement while 5 respondents equivalent to 31.5% agreed that mining sector contribute significantly to increase in government revenue given the tax reliefs provided to them. None of the respondents were neutral, strongly agreed or strongly disagreed with the given statement.

4.3.4.4Government Awareness on the Loss of Government Revenue Due to Tax ReliefTable 7 below indicates that all respondents agreed that government is aware of how much revenue is lost in tax relief. Observation shows that 62.5% and 37.5% were strongly agreed and agreed on the fact that Government is aware of how much revenue is lost in tax relief. None of the respondents were neutral or disagreed with the given statement.

4.3.4.5Control of Tax Relief to Protect Government RevenueThe perception of the tax consultant, auditors, and accountants regarding whether control over tax reliefs given to mining companies is well performed to protect government revenue is provided in table 7 below. Findings obtained shows that all respondents agreed on the given statement in which 12 respondents out of 16 equivalents to 75% agreed and the other 4 respondents equivalent to 25 strongly agreed. None of the respondents were neutral or disagreed with the given statement.

Basing on the observation summarized in table 7 below, tax relief does not favor government revenue collection through taxation. Majority of the respondents representing mining companies agreed that tax reliefs received by mining companies do not favor government revenue collections.

Table 4.7: Tax Consultants, Auditors and Accountants Responses on Tax ReliefS/N Statements Strong agree Agree Neutral Disagree Strong disagree
1 The number of special relief items given to the mining activities as required by law positively affects government revenue collections. – 4(25%) – 12(75%) –
2 Tax reliefs (VAT) enhance investment in the mining sector that positively affect revenue collection. – – – 14(87.5%) 2(12.5%)
3 The mining sector contributes significantly to increase in the government revenue given the tax reliefs provided to them. – 5(31.5%) – 11(68.7%) –
4 The government is aware of how much revenue is lost in tax relief. 10(62.5%) 6(37.5%) – – –
5 Control over tax reliefs given to the mining companies is well performed to protect the government revenue. 4(25%) 12(75%) – – –
Source: Field Data, 2018
CHAPTER FIVECONCLUSION AND RECOMMENDATIONS5.1IntroductionThis chapter provides the conclusion and recommendations that have been drawn from the study. These recommendations or ideas are made with the view of addressing the problems identified based on this findings.

The aim of this study was to achieve understanding into:
Impacts of tax exemptions on revenue collection
Impact of tax relief on revenue collections
5.2ConclusionsThis research was anticipated to determine the extent to which tax incentives impacts revenue collections specifically to various incentives provided to mining companies if in case they benefit the government in terms of revenue collections through taxation.

In order to determine the level at which tax incentives impacts revenue collections, two specific objectives were formulated. The first objective was to investigate the impact of tax exemptions on revenue collections and the second objective was to investigate the impacts of tax relief on revenue collection. In order to meet the specific objective of the research, two research questions were formulated consistent with the stated specific objectives. The first research question was what the impacts of tax exemptions to revenue collection are. The second was what the impact of tax relief on revenue collection.

The study also provided an overview from the literature review on the concept of tax, the purpose of tax, the principle of taxation, VAT, tax incentives, tax exemptions, tax relief, tax incentives provided to the mining companies and the revenue losses from mining companies.
Empirical literature reviews show that Tanzania tax system permits numerous and substantial tax incentives provided to investors among other factors are highly contributing towards the low percentage of revenue collection.

The research methodology was designed to enhance the collections of data. The study employed both primary and secondary data. Primary data were collected by questionnaires and secondary data were collected from publications and TRA records. The research consisted total sample size of 50 respondents including 25 TRA staff and 25 employees of mining companies. Only 40 questionnaires were usable, comprising 24 respondents from TRA staff and 16 respondents from mining companies represented by tax consultants, auditors, and accountants. Data were analyzed using SPSS and the outcomes were presented using tables and graphs.

The study findings indicated that the provision of tax exemptions and reliefs as incentives to the mining sector do not favor government revenue through the collection of taxation. The incentives were given to the mining companies with the anticipation to increase government revenue but instead, it appears that the government is losing revenues. The study findings noted the following;
Import and Excise Duty
The study findings showed that mining companies imports equipment at 0% of import duty during the time of exploration and mine development stages. Being exempted to zero rates, do not add value to the rise of government revenue and hence the government is losing revenue that could be collected through import duty. Most of respondent’s perception was that Import and Excise Duty taxes at zero percent it negatively impacts revenue collections.

Fuel levy exemptions
Mining companies are allowed to fuel levy exemptions to facilitate them in their operations. The study findings indicated that fuel levy exemptions do not favor government revenue collections.

As summarized in the findings, most of the respondents answered the question addressed to them that it is true these exemptions granted on mining companies do not positively affect revenue collections.

VAT exemptions on imports and local supplies
This also is among of the tax exemptions granted to the mining companies. The study findings revealed that through this scheme, the government is losing revenue as the result of granting VAT exemptions on imports and local supplies. Further findings from the study show that the majority of respondents representing mining companies disagreed that exemptions from the VAT on imports and local supplies of goods and services to mining companies and their subcontractors positively affect revenue collections.

Government awareness on tax exemptions
This was among of the issue addressed to the respondents to examine whether the government is aware that the tax exemptions granted to the mining companies result in the loss of government. The study findings revealed that the government is aware of the losses due to revenue foregone through the provisions of exemptions.
Level of tax exemptions in Tanzania
The study findings revealed that tax exemptions in Tanzania have reached excessive heights results in loss of government revenue.

Number of special relief provided to the mining companies
The study findings revealed that the number of special relief items granted to mining operations as required by law does not positively affect government revenue collections. The majority of the respondents asserted that the government should reduce special relief provided to the mining companies to the extent that will not affect the revenue collections and implement proper control for the provision of relief.

Tax relief on the VAT does not increase investment in the mining sector
The mining companies benefit the VAT special relief as part of tax incentives in order to attract investments. During the study, respondents were asked if special relief on the VAT enhances investments in the mining companies that positively affect revenue collection. From the findings obtained from respondents, the majority of the revealed that the VAT special relief does not enhance investment in mining sector.

The contribution of mining sector on the government revenue
The expectation of the government to the mining sectors is to increase more revenue go through collections of taxation. The findings showed that the revenue collections could be doubled if reliefs were removed.

The government awareness on the loss of government revenue due to tax relief
The study findings indicated that the government is aware that tax reliefs which are given to the mining companies have negative effects to the revenue collections that results in the government to lose revenues that could be collected from the revenue foregone on tax reliefs.

Control of tax relief to protect government revenue
The study findings show that the control of tax relief to protect government revenue is well implemented. Respondents were asked whether control over tax reliefs granted to mining companies is well implemented to protect government revenue in which majority were agreed to the given statement.

Basing on the findings and observation obtained, it is noted that tax incentives specifically those granted to the mining companies do not favor the government as they negatively impact revenue collection in Tanzania. The evidence suggest that the disadvantages of tax incentives hugely outweigh the advantages and that such incentives are generally not needed to attract Forest Direct Investment (FDI).

5.3RecommendationsThe study of the extent to which tax incentive impacts revenue collections is interested parties in the development of Tanzania. Tax collection is the major source of government revenue. The overall objective of this study was to examine the impact of tax exemptions and reliefs enjoyed by the mining companies and its effect on the revenue collection.

From this study, it was established that tax exemptions and reliefs specifically to mining sectors do not favor the government revenue collections rather than losing revenue that could be collected from exemptions and relief. The study, therefore, recommends the following;
The government needs to review the provision of exemptions and tax reliefs granted to mining companies and if necessary to remove them.

The government should carry out a periodic review of the persistence of existing tax incentives by assessing the level to which they meet the stated criteria.

The government should examine and review polies and laws relating to exemptions and reliefs provided to the mining sector in order to accommodate the challenges already shown by the existing laws.

The government should set more controls and check of necessities of exemptions and reliefs to protect the loss of government revenue. Regular checking should be through calculating and reporting the actual amount of revenue forgone particularly to the mining sector by making a comparison between actual and projected revenue foregone.

5.3 Limitation of the StudyIn carrying out this study there were a number of limitations, which include the time limit factor as it was short in relation to study, financial constraints and availability as the costs that were expected to do the study were higher than the sum available for the purpose.

Another crucial limitation was the issue of data availability. The study was conducted by passing through the contracts made between the government and some investors especially the mining companies. To ensure confidentiality, no attempt was made to solicit the name of the respondents.

Some of the respondents appeared to be doubtful of the researcher that might be TRA or government agents. For this situation, the researcher had to try to convince the respondents, especially from the mining sector that the study had nothing to do with government and TRA except for academic purposes. Because the specific questions on tax exemptions and relief might have threatened the validity of responses and reduce the willingness of respondents to participate. Respondents were informed that they are being interviewed to determine the degree to which tax incentive affect government revenues.

5.4 Suggestion for Further ResearchThe limitation shown above should provide wide indications for more inquiries. The research study has indicated the level of which tax incentives affect revenue collection, essentially on specific objectives such that tax exemptions and reliefs granted by government hindering TRA to raise sufficient tax revenues for economic and social developments.

It is recommended to conduct similar research to other areas of the VAT and other taxes in order to appreciate the whole impacts of the exemptions and reliefs granted under the tax laws and how they affect government revenues.
The study based on mining companies only, it is therefore recommended to conduct similar studies on exemptions and reliefs granted to other sectors in order to get the true picture of all the exemptions and reliefs granted in the country.

REFERENCESBetts, B. (1990). A Concise Dictionary of Business. Oxford: University Press.

Bhartia, H. (2009). Public Finance (13th Ed.). New Dehli: Vikas Publishing House PVT Ltd.

Bhartia, H. (2009). Public Finance (13th Ed.). New Delhi: Vikas Publishing House PVT Ltd.

Cooper, H.C (1998). Synthesizing Research: A guide for Literature Reviews. Thousand Oaks: Sage.

Fathi, B., Esmaeilian, M (2012). Evaluation of Value Added Tax (VAT) and Tax Evasion. Current Research Journal of Economic Theory. Azad University: Iran.

Frank, T. (2005). Tax Reforms and its impact on increasing government revenue in Tanzania. Unpublished Research Paper: IFM – Dar es Salaam.

Hancook, D. (1999). Taxation Policy and Practice. International Thomas: Business Press.

http://www.policyforum-tz.org/site/default/files/Taxpolicybrief.pdf (accessed 09th February 2018). Policy forum budget working group (2013). Tanzania and the problem of tax exemptions. Policy forum budget group.http://www.worldbank.org/content/dam/Worldbank/document/Africa/Tanzania/Report/tanzania-economic-update-why-should-tanzanianspay-taxes-theunavoidable-need-to-finance-economic-development.pdf (accessed 03rd March 2018). World Bank Group (2015). Tanzanian Economic Update: Why should Tanzanians pay taxes? The unavoidable need to finance economic development. Washington, DC: World Bank Group.

James, S. N. (1992). Taxation: theory and practice. London: Pentice Hall.

Kothari, C. R. (1990). Research Methodology: Methods and Techniques (2nd Ed). New Delhi: Viswa Prakashana.

Kothari, C. R. (2004). Research Methodology: Methods and Techniques. New Delhi: New Age Internations.

Kumar, R. (1996). Research Methodology: A Step-by-Step Guide for Beginners. London: Sage
Lymer, A.H. (2002). Taxation policy and practice. Great Britain: T.J. International.

Manento, M. (1994). Overhauling Tax Administration and collection needs. Dar es Salaam: Tanzania.

Mpongoliana, R. G. (2000). The Theory and Practice of Taxation in Tanzania. Dar es Salaam: NBAA.

Muganyizi, K. T. (2012). Mining Sector Taxation in Tanzania. UK: Institute of Development Studies.

Nightingale, K. (2001). Taxation: Theory and Practice. London: Prentice Hall.

Nightingale, K. (2002). Taxation: Theory and practice. FT Prentice Hall: Financial Times.

Osoro, N.E. (1995). Tax reforms in Tanzania: Motivation, Directions and Implications. Research paper No. 38. Nairobi: African Economic Research Consortium.

Ping, Z. (2006). Factors influencing VAT Compliance Coasts.Shekidele, C.M.C. (1996), The Introduction of VAT in Tanzania: Lessons and Practices in Developing Countries, IFM Journal of Finance and Management, Volume 5 Number 1 July, 1996.

Uwazi, Policy Brief (2010). Tanzania’s Tax Exemptions: Are they too high and making us too dependent on Foreign Aid. Twaweza: Hivos Tanzania.

Value Added Tax Act, 2004.

Value Added Tax Act, 2014.