Flaws in the Design of Crop Levies by the Local Government Authorities in Mainland Tanzania

Abstract

The design of crop levies by Local Government Authorities (LGAs) in Mainland Tanzania is governed by the Local Government Finance Act, Cap. 290 [R.E. 2019]. The Act delineates the tax base, identifies the taxpaying unit, and empowers the LGAs to establish crop levy rates by bylaws within a range of 0–3% of the farm gate price for both food and cash crops. This paper examines flaws in the design of crop levies through bylaws enacted by LGAs in Mainland Tanzania. It reveals that the Local Government Finance Act does not define the term inhabitants or specify the categories of inhabitants liable to pay crop levies, which leads to flaws in the design of these levies by the LGAs. The paper recommends amending the Local Government Finance Act to define the term inhabitants and the relevant categories of inhabitants for the purpose of paying crop levies.