Tanzanian Innovation Combats Tax Loss Using WhatsApp

WhatsApp EFD Innovation Aims to Combat Tax Loss in Tanzania

Dar es Salaam, March 8, 2025 – Kalebu Gwalugao, a 25-year-old Tanzanian entrepreneur, has unveiled an innovative system that enables businesses to operate via WhatsApp and issue electronic fiscal receipts (EFDs) to their customers. This development comes as part of his effort to tackle the ongoing challenge of tax revenue loss, ensuring that businesses contribute appropriately to the government's finances.

Gwalugao presented his groundbreaking idea at a business pitch event hosted by Harambee Startup, an initiative supported by the Serengeti Angels network of local investors. During his pitch, Gwalugao explained that his innovation, dubbed ‘Ghala,’ was born out of his observations of the challenges faced by online traders, particularly those using platforms like Instagram. He noted that a significant number of informal businesses on Instagram fail to issue receipts for their transactions, which ultimately leads to lost tax revenue.

"Many individuals run businesses on Instagram, marketing products without providing sale receipts," Gwalugao shared. His 'Ghala' system, however, enables business owners to communicate directly with their customers on WhatsApp, facilitating both product delivery and the issuance of integrated electronic fiscal receipts linked to the Tanzania Revenue Authority (TRA). This ensures that businesses contribute to the country’s tax system, helping mitigate revenue shortfalls.

In addition to this, Gwalugao highlighted the system’s ability to tackle another common problem in the informal business sector: a significant discrepancy between the number of products advertised and actual buyers. WhatsApp communication, he argued, allows for better engagement between business owners and customers, promoting more genuine transactions.

Rodrick Msechu, founder of Serengeti Angels, explained that their network aims to support the growth of young entrepreneurs by fostering a community of innovators. He emphasized that this event marked the seventh in a series of such competitions, where entry fees were used to fund the winners. While acknowledging the financial rewards were modest, Msechu highlighted the primary value of these events as being the networking opportunities they provide. This connection to a broad range of local and international investors was seen as a key step in empowering young entrepreneurs to scale their ventures.

Msechu also pointed out a challenge unique to Tanzania – the reluctance of some audiences to invest in the ideas of young entrepreneurs. "Unlike in places like South Africa and the United States, events like these are not as widely supported here," he noted.

Investor Edwin Bruno of Smart Group stressed the importance of Tanzanians supporting local innovators, stating that fostering young talent was essential for economic development and job creation. "An African child’s growth is a collective effort from the entire village. In the same way, we must collectively support youth-led businesses to grow into larger enterprises," Bruno asserted.

Julie Grillaert, Manager at NBS Africa, commended the competition participants for their visionary ideas, recognizing the potential of these projects to address key challenges within Tanzanian communities if given the right backing.

Among the other contestants were Ruth Maro from Gawapay and Richard Lema from ClickPesa, a loan service. Although none of the participants secured the top prize, all expressed gratitude for the opportunity to showcase their ideas and look forward to future collaborations.