Utilizing the Mutual Agreement Procedure in Resolving International Tax Disputes in Tanzania: Prospects and Challenges

This article examines the utilization of the Mutual Agreement Procedure (MAP) in resolving tax disputes under Tanzanian Double Taxation Agreements (DTAs). The MAP, provided for under Article 25 of the Organization for Economic Cooperation and Development (OECD) Model Tax Convention on Income and on Capital 2017, and United Nations Model Double Taxation Convention between Developed and Developing Countries, is designed to prevent double taxation and facilitate cooperation between tax authorities of treaty partners. Tanzania has concluded DTAs with several countries, including Canada, India, and South Africa, which incorporate MAP provisions. However, many of these treaties are based on outdated models that do not reflect modern international standards such as the OECD’s 2012 Manual on Effective Mutual Agreement Process (MEMAP) and the Base Erosion and Profit Shifting (BEPS) Action 14 minimum standards. The study employs a doctrinal analysis of statutes and treaties, insights from tax practitioners and taxpayers, and comparative evaluation of international best practices. Findings reveal that while MAP offers an avenue for amicable dispute resolution, its practical use in Tanzania is limited due to a lack of clear timelines, the absence of binding arbitration, limited taxpayer awareness, and institutional constraints within the Tanzania Revenue Authority (TRA). The article concludes that MAP remains a valuable tool for enhancing tax certainty, protecting investors, and promoting international economic cooperation. Nonetheless, its effectiveness in Tanzania requires reform through modernization of DTAs, codification of MAP procedures in domestic law, and institutional strengthening of TRA to meet international best practices.