A Research Report Submitted to the Faculty of Law in Partial Fulfillment for Award of Bachelor of Laws (LLB) Degree of Mzumbe University
The shift from a physically oriented commercial environment to a knowledge-based electronic environment attitudes serious and substantial issue about taxation and taxation regimes since it may result in ineffective taxation since the economic changes faster than tax laws. One of the important tax considerations has been whether the existence of a server or website, Instagram, and WhatsApp constitutes a taxable permanent establishment. The study was conducted through a field study at Songea municipal within Ruvuma Region. The study involved documentary review and field research by collecting appropriate information from agencies enforcing tax laws. Mostly collection of field data involved oral interviews, questionnaire methods and focus group discussion.
This study found out that, there is no clear legislation governing the taxation of ecommerce in Tanzania, and Laws governing taxation are ineffective to encounter the taxation of e-commerce in Tanzania resulting in the loss of national taxes.
The study came to discover that, the absence of clear and specific law governing the taxation of e-commerce in Tanzania causing great loss of the state revenue. The findings disclose that there is inadequate coordination between the ministry responsible for taxation, and other departments charged with technology advancement. The findings show that there is weak information sharing between the institution involving taxation together with other Information and communication technology ministry which could assist to identify all people involving in the online transaction. Inadequate knowledge about tax laws, technological barriers hinder taxation of electronic commerce in Tanzania as a result of an ineffective collection of revenue. This study recommends that for the sake of avoiding ineffective taxation and loss of revenues the lawmakers should consider the advancement of science and technology in the enactment of tax laws, the government should adopt best practices such as Institutional coordination and teamwork in the taxation of e-commerce. The establishment of clear tax laws basing on the principles of taxation will enable the effective collection of taxes as far along brings the increase of country revenue for the development of the country.