The development agency says the mineral rich country is missing out on millions of dollars worth of revenue as a result of "unfair tax anomalies".
It says the lost taxes could provide Tanzania with some “badly needed” revenue that could be spent on schools, hospitals and other infrastructure improvements.
Christian Aid’s East Africa country manager, Dereje Alemayehu, said: “Tanzania is one of the few African countries without internal conflicts, but the ruling elite are not in a position to make effective use of this political capital to lead the country out of poverty because it has allowed the leakage of valuable resources from the country by complicity or through ineffectiveness.”
President Jakaya Kikwete of the ruling Chama cha Mapinduzi (CCM), or ‘Party for Change’, is expected to win a second term in office when Tanzanians head to the polls on Sunday.
With two former Government ministers and a permanent secretary facing corruption allegations in court, Kikwete has vowed to end corruption if he wins the election.
Tanzania was ranked third from the bottom of a transparency index by the Revenue Watch Institute over its handling of mining and mineral deals.
Christian Aid and other organisations operating in Tanzania concluded in a recent report that Tanzania is losing out on revenue from gold mining companies to the tune of at least $265 million as a result of low royalties and lost taxes between 2000 and 2008.
Whilst gold mining is the fastest growing sector of Tanzania’s economy, the report warned that the “excessively low” royalty rates and government corporation tax concessions were depriving ordinary Tanzanians of the benefits of the boom.
Mr Alemayehu said: “If this election is not going to be yet another contest between factions of the ruling elite over the spoils of the state, the new government must at least enhance domestic resource mobilisation by reducing tax expenditure, discarding a tax policy which provides huge exemptions for the wealthy and entails extorting from the poor, as well as being vigilant against tax evasion and aggressive tax avoidance.”