TAMONGCSO urges authorities in Arusha to stop charging abolished taxes and levies

The Tanzania Association of Managers and Owners of Non-Government Schools and Colleges (TAMONGSCO) has raised concerns over Local Government Authorities (LGAs) in Arusha allegedly collecting taxes and levies previously abolished by the Central Government. This practice, reportedly enforced with municipal guards, contravenes established legal frameworks and central government directives, creating confusion and negatively impacting the provision of education services. The issue highlights the ongoing tension between central and local government fiscal autonomy and the need for clear, consistent tax policy implementation across Tanzania.

A significant legal and administrative challenge has emerged in Tanzania, with the Tanzania Association of Managers and Owners of Non-Government Schools and Colleges (TAMONGSCO) publicly calling for an immediate halt to the collection of abolished taxes and levies by Local Government Authorities (LGAs) in Arusha. The association alleges that certain councils are resorting to coercive measures, including the use of municipal guards, to enforce payments for charges that have been officially rescinded by the Central Government. This situation not only places an undue burden on private educational institutions but also raises critical questions about the rule of law, the hierarchy of legislative authority, and the operational autonomy of local government in Tanzania.

This development underscores a recurring tension within Tanzania's decentralized governance structure, where local authorities, empowered to generate their own revenue, sometimes clash with central government directives aimed at streamlining the tax regime or providing relief to specific sectors. For legal practitioners, the dispute highlights the complexities of navigating intergovernmental fiscal relations and the potential for legal challenges arising from inconsistent application of tax laws. The article will delve into the statutory framework governing local government finance, examine the implications of collecting abolished taxes, and consider the broader impact on the business and education sectors.

The legal framework for local government in Tanzania is primarily enshrined in the Constitution of the United Republic of Tanzania, 1977, particularly Articles 145 and 146, which recognize the establishment of local government institutions and empower Parliament to enact laws detailing their functions, responsibilities, and powers. Key legislation includes the Local Government (District Authorities) Act, 1982 (Cap 287), the Local Government (Urban Authorities) Act, 1982 (Cap 288), and critically, the Local Government Finances Act (Chapter 290). These Acts grant LGAs the power to levy taxes, fees, and charges to fund local services such as primary education, healthcare, and infrastructure.

However, the fiscal powers of LGAs are not absolute and are subject to central government oversight and policy directives. The central government plays a significant role in controlling and managing local government authorities through establishing the legal framework, formulating policies, and providing financial support. Historically, Tanzania has undertaken reforms to rationalize its local tax system. Notably, in 2003 and 2004, the government abolished several 'nuisance taxes' and the flat-rate development levy, aiming to improve transparency, reduce collection costs, and address public resistance to unfair taxation. These reforms demonstrate the central government's prerogative to modify or abolish local levies, which should, in principle, be respected and implemented by all LGAs.

The core of TAMONGSCO's complaint lies in the alleged collection of taxes and levies that have been "previously abolished by the Central Government." This practice, if proven, directly challenges the principle of legal certainty and the supremacy of central government policy in fiscal matters. While LGAs possess statutory powers to impose taxes and rates under the Local Government Finances Act, these powers are exercised within the confines of national legislation and ministerial directives. When the central government abolishes a tax or levy, it effectively removes the legal basis for its collection by any authority, including LGAs. Continued collection, therefore, amounts to an unauthorized imposition of taxes, potentially rendering such collections illegal and subject to challenge.

The use of force and municipal guards to collect these payments, as alleged by TAMONGSCO, further exacerbates the legal and ethical concerns. The Local Government Finances Act outlines procedures for tax recovery, which typically involve legal proceedings in cases of persistent non-compliance, rather than arbitrary force. Such actions could expose LGAs and their officials to liabilities for unlawful coercion or harassment. The situation also highlights a broader issue of intergovernmental relations in Tanzania, where the Local Government Finance Act has been criticized for containing "unclear, duplicative, and in some cases contradictory clauses," leading to difficulties in revenue collection and central government interference.

Recent Finance Acts, such as the Finance Act, 2024, and Finance Act, 2025, regularly introduce or abolish specific taxes and exemptions at the national level, demonstrating the dynamic nature of Tanzania's tax landscape. These changes often have direct implications for local government revenue streams. For instance, the abolition of certain VAT exemptions or the introduction of new tax reliefs by the central government signals a clear policy direction that LGAs are expected to follow. The continued collection of abolished taxes by Arusha City Council and Arusha District Council, as specifically named by TAMONGSCO, creates an environment of confusion and uncertainty, undermining the central government's efforts to create a stable and predictable tax environment, particularly for critical sectors like education.

For legal practitioners, the TAMONGSCO dispute in Arusha serves as a crucial reminder of the need for vigilance in monitoring changes in tax legislation and local government directives. Attorneys advising non-governmental organizations, particularly in the education sector, must be acutely aware of the interplay between central and local government fiscal powers. Where clients face demands for abolished taxes, a robust legal challenge, citing the relevant central government directives or legislation that rescinded the levies, would be appropriate. Furthermore, the alleged use of force in collection warrants immediate legal intervention, as it likely constitutes an abuse of power.

This incident underscores the imperative for greater clarity and harmonization in Tanzania's intergovernmental fiscal relations. The Central Government, through the Ministry of Finance and the Ministry for Regional Administration and Local Government, should issue clear, widely publicized circulars or regulations explicitly listing all abolished taxes and levies, and reiterating the illegality of their collection. Practitioners should advocate for their clients by engaging with relevant government bodies and, if necessary, pursuing judicial remedies to ensure that local authorities operate strictly within their legal mandates, fostering a predictable and equitable tax environment for all stakeholders.