Dar es Salaam — The Tanzania Revenue Authority (TRA) has held a high-level meeting with Chinese traders and diplomats in Dar es Salaam, aiming to ease tensions over tax compliance and foreign business practices.
The engagement comes as local merchants increasingly voice frustration over what they describe as unfair competition from foreign nationals operating in sectors legally reserved for citizens.
TRA Commissioner General Yusuph Mwenda met with Chinese Ambassador Chen Mingjian and members of the Chinese business community on March 23, 2026. The meeting sought to clarify the government’s stance on taxation while reassuring foreign investors of a stable business environment.
“We have emphasised that the TRA has no dispute with companies coming from China,” Mwenda told journalists following the meeting. “Our dispute is with tax evaders. Anyone who evades taxes within our country, regardless of which country they come from, has a dispute with us.”
The Commissioner General outlined the government’s commitment to implementing 284 recommendations proposed by a presidential commission on tax reform.
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These reforms, initiated by President Samia Suluhu Hassan, aim to create a predictable, fair, and modernised tax system that reduces bureaucratic hurdles and minimises physical contact between tax officers and traders.
Growing Chinese presence
The Chinese business community in the East African nation has grown significantly over the past few decades. While official statistics from the year 2000 showed only 239 Chinese nationals holding work or residence permits, estimates from the Chinese Embassy suggest the population had exceeded 30,000.
This demographic shift reflects deepening economic ties between the two nations. China is currently Tanzania’s largest trading partner, with exports to the East African nation reaching $8.17 billion in 2024.
Chinese investors have established a dominant presence across multiple sectors of the economy. While initially focused on large-scale infrastructure projects, manufacturing, and textiles, Chinese entrepreneurs have increasingly moved into retail, wholesale trading, and small-scale mining.
Ambassador Chen Mingjian reaffirmed her government’s commitment to lawful business practices during the meeting. She stated that the Chinese government, through its embassy, encourages all Chinese companies to abide by local laws and regulations and to pay taxes accordingly.
Kariakoo Market tensions
The TRA meeting occurs against a backdrop of escalating friction between local traders and foreign merchants, particularly at the famous Kariakoo market in Dar es Salaam. Local traders have long complained that foreign nationals, predominantly Chinese, are engaging in retail and wholesale trade, activities legally reserved for citizens.
In February 2025, then-Trade and Industry Minister Selemani Jafo formed a fifteen-member committee to investigate these grievances. The committee’s probe into 75 foreign-owned stores confirmed that foreign traders were indeed participating in retail operations, employing 148 workers in this capacity.
Local merchants argue that foreign traders enter the market with substantial capital and access to credit, allowing them to sell products at significantly lower prices. This undercutting, locals claim, breaks the economic cycle and makes fair competition impossible.
Furthermore, investigations revealed that foreign traders often displace local merchants by offering higher rents for commercial spaces. Some local politicians have warned that these predatory business behaviours could lead to serious conflicts if left unaddressed.
Mining sector disputes
Similar tensions have erupted in the mining sector, where Chinese investors have increasingly acquired small-scale mining operations.
Although the Mining Act of 2019 prohibits the transfer of small-scale mining licenses to foreigners, many investors bypass this restriction by entering into Technical Support Agreements with local license holders.
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This practice has led to significant displacement of local miners. In areas like Mwakitolyo in the Shinyanga region, mines that previously employed tens of thousands of local workers are now operated by single foreign entities.
Lawmakers have raised concerns about the economic impact of these takeovers. Foreign companies operating under small-scale licenses often avoid the stringent taxes and compliance requirements mandated for large or medium-scale operators, resulting in substantial revenue losses for the government.
Environmental degradation has also become a pressing issue in these mining communities. Residents in areas such as Nyamahuna in Geita have reported severe water contamination from mining chemicals and structural damage to their homes caused by unregulated explosions.
Balancing act
The government now faces the delicate task of addressing local grievances without alienating its most crucial economic partner.
While local traders demand the complete removal of foreigners from retail and wholesale operations, experts warn that such drastic measures could provoke reciprocal actions against citizens doing business in China.
READ MORE: Is the Controversy Over Foreign Traders at Tanzania’s Kariakoo Market Exaggerated?
During the recent meeting, tax consultants representing Chinese firms expressed optimism about the government’s digitisation efforts. They noted that the new digital tax payment systems position the country as an attractive destination for further foreign investment.
