A Compulsory Research Report Submitted to Mzumbe University – Mbeya Campus College in Partial Fulfillment of the Requirement for the Award of Bachelor Degree of Laws (LL.B) of Mzumbe University.This study was conducted to assess the legal and practical challenges on taxation of informal sector in Tanzania. The research specifically undertaken for the purposes examine the challenges on taxation of informal sector in Tanzania, to examine on framework on taxation of informal sector The research was conducted on Mbeya Region was taken as its research design to represent other Regions in Tanzania due to the limitation of time and financial capacity to collect data from another different region. Both primary and secondary data were used to collect data, interview was used as the method to collect primary data whereby a researcher supplied paper to the respondent for the seek of data and some of the respondents were interviewed by the researcher herself. On chapter two researcher explain on conceptual framework on taxation of informal sector. In chapter three researcher explain on legal framework on taxation of informal sector. In chapter four is on research findings explain legal challenges on taxation of informal sectors in Tanzania. Finally, the study came with the findings that there is a lot of weakness in the institutional framework, as the law that is so available are not so able to cover the main purpose of the challenges on taxation of informal sector. But also, the researcher came up with finding as to public are not aware of the law as to the importance of paying Tax to a country that when paying tax its increase revenue. The researcher on recommendation are amendment of the tax laws restructuring tax collection system, restructuring tax collection system, as well as taxpayers registration system.