Sefue explains how tax reforms will encourage business growth
Tanzania has introduced a one-year tax grace period for newly registered businesses to encourage formalization. The policy follows recommendations from a presidential commission aimed at reducing the tax burden on startups.
Why it matters
This reform addresses structural economic issues by incentivizing informal businesses to join the formal economy, potentially broadening the tax base long-term.
Dar es Salaam. Former Chief Secretary, Amb Ombeni Sefue has welcomed the government's decision to grant newly registered businesses a one-year tax grace period, saying it implements one of the key recommendations made by the Presidential Commission on the Review of Tax System Reforms, which he chaired.
In March 2026, the commission submitted 284 recommendations aimed at addressing structural weaknesses in the country's tax system, including legislative gaps, administrative inefficiencies, taxpayer services and the use of information and communication technology.
The commission found that Tanzania's tax system was characterised by frequent policy changes, overlapping mandates among revenue collection agencies and a narrow tax base.
As a result, a relatively small number of formal sector taxpayers shoulder a disproportionate share of the tax burden, while much of the informal sector remains outside the tax net.
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