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Democratisation in Tanzania: No Elections Without Tax Exemptions

Author

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  • Therkildsen, Ole
  • Bak, Ane Karoline

Abstract

A demand-supply framework has been developed and applied to Tanzania to explore the link between democratisation, economic liberalisation and the use of tax exemptions to fund political parties’ electoral campaigns. In Tanzania, the demand for this type of money has increased since one-party rule was abolished in 1992. This led to reduced state subsidies to parties, while growing inter- and intra-party competition for political power through the ballot box increased the campaign costs of the last three elections. Political liberalisation also raised the cost of keeping together increasingly fragmented political elites. The increased supply of political funding for the ruling party is driven by mutual interest between the funding demands of political elites, the interests of companies and emerging capitalists for tax exemptions and other rents to succeed in business. This demand-supply framework helps to explain an increased use of tax exemptions for private companies and individuals around election years in Tanzania. The framework is also relevant to the analysis of political financing through tax exemptions elsewhere on the African continent. Summary of Working Paper 98 by Ole Therkildsen and Ane Karoline Bak.

Suggested Citation

  • Therkildsen, Ole & Bak, Ane Karoline, 2019. "Democratisation in Tanzania: No Elections Without Tax Exemptions," Working Papers 14886, Institute of Development Studies, International Centre for Tax and Development.
    • Handle: RePEc:idq:ictduk:14886
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    File URL: https://opendocs.ids.ac.uk/opendocs/handle/20.500.12413/14886
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    Citations

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    Cited by:

    1. Ivar Kolstad & Arne Wiig & Odd‐Helge Fjeldstad, 2021. "Citizens’ preferences for taxation of internationally mobile corporations: Evidence from Tanzania," Review of Development Economics, Wiley Blackwell, vol. 25(2), pages 548-562, May.
    2. Ephraim Armstrong Awinbugri (Ph.D.) & Rev. Fr. Dr. Mark Owusu, 2022. "The impact of tax exemptions granted to CSO’s on revenue mobilization targets: The case of CSOs in Accra-Ghana," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 6(8), pages 607-614, August.
    3. Moore, Mick, 2020. "What is Wrong with African Tax Administration?," Working Papers 15661, Institute of Development Studies, International Centre for Tax and Development.
    4. Matilde Jeppesen, 2021. "What we hoped for and what we achieved: Tax performance of Semi‐Autonomous Revenue Authorities in sub‐Saharan Africa," Public Administration & Development, Blackwell Publishing, vol. 41(3), pages 115-127, August.

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