Recent tax reforms in Tanzania have affected a wide range of revenue providers. Much in line with the theoretical expectations of the ‘political settlement framework of revenue bargaining’ (Kjær & Ulriksen), the extent to which the government is able to actually push through the reforms depends on the fiscal and political importance of the different revenue providers. However, as the theoretical framework has little to say about the actual strategies employed by stakeholders in the bargaining process, we explore how targeted revenue providers and the government engage in bargains over the tax reforms.
We compliment the taxation literature with organisational management literature, which identifies possible strategies that revenue providers may use to influence the government. In order to study how the stakeholders bargain, we select four cases where the government and each revenue provider have relatively equal bargaining power, but revenue providers may have varying degrees of fiscal and political powers: 1) the imposition of VAT on the tourism sector, 2) VAT on the transport of goods, 3) tax on parliamentarians’ gratuity payment, and 4) the abolishment of duty-free shops for army members.
Tentative analyses suggest that the type of bargaining strategies depend on whether the revenue provider perceive there to be an adequate forum of exchange and the extent to which the revenue provider is organised to speak with ‘one voice’. As the organisational management literature only discuss strategies of actors responding to institutional pressures (i.e. revenue providers), our analyses of the government’s strategies are more explorative and will in this way provide additional contributions to the theoretical literature on revenue bargaining.