International Journal of Management, Accounting and Economics (Feb 2025)

Impact of Taxes on Economic Growth in Tanzania

  • Nshunju Martin,
  • Beny Mwenda

DOI
https://doi.org/10.5281/zenodo.14968980
Journal volume & issue
Vol. 12, no. 2
pp. 311 – 323

Abstract

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The purpose of the research was to ascertain how taxes affected Tanzania's economic growth. specifically looked at how Tanzania's economic development was impacted by import taxes, value-added taxes, and corporate income taxes. The study used a causal effect research design. The National Bureau of Statistics' secondary data was used in the research, which spans the years 1995 to 2023. Multiple regression, correlation, and descriptive statistics were used to examine the data. The results show that the value-added tax has a significant impact on economic growth, corporate income tax has a significant impact on economic growth. Furthermore, the results show that import taxes have no discernible impact on economic growth. Conclusively, the research highlights VAT as a vital contributor to Tanzania's economic development, suggesting that raising this tax could further promote growth. To enhance Tanzania's economic growth, policymakers should optimize VAT and corporate income tax structures, streamline tax administration, implement targeted incentives for SMEs, create a favorable business environment, and conduct regular assessments of the tax system's impact on growth and equity.

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