Government officials, Members of the Parliament, civil society organisations, journalists and development partners gathered in Dodoma on Monday, 12th May 2025, to discuss how Tanzania can curb the ongoing loss of public funds through illicit financial flows (IFFs).
The dialogue, hosted by Policy Forum with support from the Thomson Reuters Foundation, was held under the theme “Follow the Money: A Multistakeholder Dialogue on IFFs in Tanzania.” It brought together stakeholders from the Vice President’s Office – Union and Environment, the Ministry of Finance, the Ministry of Minerals, the Business Registrations and Licensing Agency (BRELA), the National Audit Office of Tanzania (NAOT), Tanzania Investment Centre (TIC), Tanzania Extractive Industries Transparency Initiative (TEITI), Members of the Parliament (Africa Parliamentarians Network Against Corruption and the Standing Parliamentary Committee on Budget), the media, and civil society organisation and faith based organisations, reflecting a collective commitment to addressing the growing challenge of IFFs in the country.
Delivering a presentation at the event, Norah Kawiche, a tax law lecturer at Saint Augustine University of Tanzania and a researcher on IFFs, said Tanzania loses around USD 1.83 billion (approximately TZS 4.79 trillion an amount enough to finance a current health budget in Tanzania) annually through practices such as tax evasion, trade misinvoicing and transfer pricing methods often used by companies to shift profits and avoid paying taxes. These financial losses are having a serious impact on the country’s ability to provide essential public services.“This is money that could be going to hospitals, schools, and infrastructure,” she said. “Instead, it is leaking out of the system through hidden and hard-to-trace financial activities.” She added that the mining sector alone saw a loss of around USD 360 million between 2010 and 2017, mainly due to trade misinvoicing and undervaluation of exports.
Panellists noted that while Tanzania has seen a rise in foreign investment projects, from 293 in 2022 to 921 in 2024, this growth has not necessarily translated into stronger domestic revenues. Concerns were raised that some investors may be using legal and regulatory gaps to shift profits out of the country, while contributing relatively little to the local economy.
“There is a need to rethink how we regulate and monitor these investments,” said Steven Aloys from the Tax Justice Working Group. “We need to strengthen our tax systems and make sure companies are paying their fair share.”
Panellists stressed the need for thorough background checks when companies register in Tanzania and recommended continuous monitoring throughout their operations to detect suspicious financial behaviour early. They noted that while Tanzania has signed several tax agreements and is a member of international frameworks such as the Global Forum on Transparency and Exchange of Information, its capacity to track illicit financial flows remains limited. To strengthen oversight, they called for the expansion of inter-country agreements, especially those that allow for the automatic exchange of financial and corporate data, to better trace cross-border transactions and uncover hidden ownership structures.
Journalists at the meeting underlined the role of the media in holding powerful actors accountable and shedding light on complex financial issues. They emphasised that investigative journalism plays a crucial role in uncovering hidden financial dealings such as tax evasion, trade misinvoicing, and the misuse of public resources. Ephrahim Bahemu from Mwananchi Communications echoed those views, urging both journalists and citizens to stay informed and engaged. “It’s not enough to know these flows exist. We must act on the information,” he said.
Civil society organisations also shared how they have been raising awareness on IFFs through public education campaigns, policy briefs and simplified documents. Their goal, they said, is to ensure citizens understand the impact IFFs have on national development and demand stronger accountability from both government and the private sector.
Participants outlined several actions they believe can help reduce IFFs in Tanzania. These include increasing transparency in investment contracts, making use of the upcoming Beneficial Ownership Registry, and investing in better technology and expertise for tax monitoring, especially in sectors like mining.
There were also calls for stronger collaboration between government agencies, including the Tanzania Revenue Authority (TRA), the Financial Intelligence Unit (FIU), and ministries dealing with finance, mining, and investment.
The meeting encouraged the use of digital and cashless transactions to make it easier to track money movement. Moreover, stakeholders also urged the government to review tax treaties and reconsider tax incentives that may not be yielding real benefits to the country.
As part of the way forward, participants proposed the formation of a dedicated task force coordinated by the Policy Forum. The task force would bring together a range of stakeholders, including representatives from civil society, government agencies, the private sector, and the media, to examine the full impact of illicit financial flows in Tanzania. Its core objective would be to develop clear, evidence-based recommendations on how to address IFFs, and to present those proposals to the government for consideration and action.