TANZANIA has been branded as the champion of soliciting aids instead of putting same efforts into increasing revenue collections, a tax consultant has said.

The consultant argued that if efforts chasing donor funds were reduced by one per cent and redirected to increase local revenue collections, the treasury coffers could have increased.

International Centre for Tax and Development (ICTD), Research Director, Prof Odd-Helge Fjeldstad, said researches show that countries with high aids receipts tend to have a lowtax collection rates in comparison to Gross Domestic Products.

"Tanzania is good in chasing donors' money," Prof Fjeldstad told participants of one day Tax and Development workshop organized by Norwegian Church Aid (NCA) over the weekend.

According to the Norwegian economist, there are negative relationships between aid funds and revenue collection as if one increases and the other decreases.

In 2009, the research document shows Tanzania aids ratio to GDP was 11.2 per cent compared to 15.1 per cent of revenue collection.

The biggest economy in East Africa, Kenya does not factor in donors money into its budget and have the highest rate of revenue collection in the region of about 20 per cent.

Mozambique has the highest ratio of 22.4 per cent donors' aids to GDP and 12.4 per cent of revenue collection.

Prof Fjeldstad, who is also a lecturer at Chr. Michelsen Institute (CMI), said it's high time for African economies to learn from Euro debt crisis that the trend in near future is to cut aid.

"It's higher time for countries (in Africa) to start building internal revenue collecting capacity and walk out of budget dependency," the researcher said.

A seminar participant commenting on the Prof Fjeldstad presentation said he wonders why the government is putting a lot of efforts in looking for aids instead of widening tax base and collection margins.

"Let's change the way we are doing things instead of looking for donors' aids, let's concentrate on improving tax collection," the participant said.

Mzumbe University, Dar es Salaam Business School, Dr Honest Ngowi said tax increment ratio should also reflect the services and goods it has provided to the citizens instead of being a celebration figure.

"Tax should be used as a tool for development," Dr Ngowi said.

ICTD believes that Tanzania has a potential of collecting more taxes to reach a 20 per cent ratio to GDP and become fiscal reliance if include other untaxed sectors. Currently, the country is targeting 17 per cent.

Tanzania, a former British colony and one of Africa's biggest per capita aid recipients, received 453 million US dollar (770.1bn/-) of aid for its 2011/12 budget.

The participants, about 50, faulted the taxpayers' level of 500,000 saying it has left many potential payers outside the bracket compared to the population.

Tanzania Revenue Authority (TRA) data shows Pay As You Earn (PAYE) constitute 17 per cent of the tax population, VAT on Imports 16 per cent, VAT on domestic 14 per cent and the lowest is corporate tax has 9.8 per cent.