Tanga. Businesspeople in Tanga Region have urged the government to introduce a mandatory 60-day deadline for public institutions to settle its bills, arguing that prolonged payment delays constrain cash flow, production, investment and tax compliance.

The proposal was made yesterday, during a stakeholder engagement forum organised by the Tanzania Revenue Authority (TRA) headquarters to sensitise the business community on tax law amendments introduced for the 2026/27 financial year.

Speaking at the meeting, Tanzania Business Community (TBC) deputy secretary-general, Mr Ismail Masoud, stressed the importance of continuous tax education, saying traders needed to understand recent legislative changes to comply with their obligations.

Mr Masoud said businesses supplying government institutions continued to face serious cash flow challenges due to delayed payments.

He proposed legislation requiring public entities to settle suppliers’ invoices within 60 days of receiving goods or services.

“We request that TRA explore legislative measures requiring government entities to pay suppliers within 60 days,” he said, warning that prolonged retention of private sector funds was restricting liquidity.

He said timely payments would enable businesses to reinvest capital, expand operations, create jobs and meet tax obligations to central and local governments.

Mr Masoud also linked the settlement of institutional debt arrears to efforts to broaden the tax base, saying tied-up capital weakened businesses and ultimately reduced revenue collection.

Traders also called for a review of eligibility criteria for tax exemptions covering established businesses that open new outlets in different regions.

According to TRA, the government introduced a one-year tax holiday for new businesses from July 1, 2026, to encourage enterprise growth and expand the taxpayer base.

Mr Masoud argued that an established trader from Tanga opening a business in Kagera should qualify for the incentive because the new venture incurs substantial costs, including marketing, recruitment and local levies.

Tanga Region Chamber of Commerce chairman, Mr Rashed Mwanyoka, supported further dialogue, saying new branches face distinct operational challenges regardless of whether their owners had previously benefited from tax relief.

However, local trader, Mr Bakari Mwanyoka, supported the tax holiday for first-time entrepreneurs but said those who had already benefited should pay taxes on subsequent ventures.

TRA chief tax management officer in the taxpayer education department, Mr Salimu Bakar, said the authority had taken note of the recommendations.

“The proposals would be compiled with views from other stakeholders and submitted to the Ministry of Finance for consideration in future tax policy amendments,” said Mr Bakar.

He reaffirmed TRA’s commitment to strengthening taxpayer education through workshops, broadcast media and digital platforms, while simplifying administrative processes through electronic systems.

He said sustained tax education was essential to promoting voluntary compliance, improving services and strengthening domestic revenue collection.