Tanzanian President John Magufuli suspended the head of the telecoms regulator on Tuesday, saying the watchdog failed to monitor the industry, resulting in the loss of potential tax revenues of TSh400 billion ($182.15 million) a year since 2013.
Magufuli, who took office late last year, has pledged to root out corruption and inefficiency in Tanzania.
He has already sacked several senior officials, including the head of the government's anti-graft body, the head of the tax authority and the chief executive of the country's port authority.
"I want the government to collect all outstanding (tax) revenues and I will not hesitate to take action against anyone who becomes an obstacle in this tax collection drive," a statement from the president's office quoted him as saying.
It said Magufuli had also dissolved the governing board of the state-run Tanzania Communications Regulatory Authority.
The president's office said the telecoms regulator, headed by Ally Simba, had signed a contract with a private firm in 2013 for the installation of a telecommunications traffic monitoring system, but the regulator had failed to use it.
The telecoms regulator did not immediately respond to Reuters' request to comment.
Communications is the fastest growing sector in east Africa's second-largest economy, which has a population of more than 47 million.
The number of mobile phone subscribers in Tanzania rose by 25 per cent in 2015 to 39.8 million, according to latest government figures.
As in other African countries, mobile phone use has surged in Tanzania over the past decade, helped by the launch of cheaper smartphones.
Mobile phone operators in Tanzania include Vodacom Tanzania, part of South Africa's Vodacom, Bharti Airtel Tanzania, Tigo Tanzania, which is part of Sweden's Millicom, Zantel and Halotel, owned by Vietnam-based telecoms operator Viettel.
The president has also launched a general tax crackdown and ordered the country's revenue authority to target large-scale tax evasion by big companies.