Tanzania

Corporate - Significant developments

Last reviewed - 09 September 2026

Finance Act 2026

Some of the significant changes brought in by the Finance Act 2026 include the following:

Tax administration

Mechanism of recognition of Framework Agreements signed between the Government and mining investors (where Government has an ownership interest) whereby they shall be recognised upon the publication of a notice in the Government Gazette.
Introduction of a new offence for the misuse of tax exemptions and remissions granted under a Framework Agreement with the Government. A person who uses exempted goods for purposes other than those for which the exemption was granted, transfers such goods without the Commissioner’s approval, or obtains the exemption through false or misleading statements commits an offence. Upon conviction, the person is liable to a penalty equal to 100% of the tax exempted, and the exempted or remitted tax becomes immediately due and payable as if the exemption or remission had never been granted.
Revision of the penalty applicable for non-compliance with the arm’s length principle in related-party transactions to the higher of 30% of the transfer pricing adjustment and 100% of the tax shortfall.
Introduction of additional disclosure requirements relating to contracted services by entities engaged in the extractive or construction industries who are required to electronically disclose though a prescribed form certain details regarding the contracted services within 30 days of executing a contract.
Recognition of a withholding VAT statement as a VAT return
Transfer of the administration of property rates from the Tanzania Revenue Authority (TRA) to Local Government Authorities.
Power given to the Commissioner General to sell seized perishable goods

Income tax

Mechanism of recognition of tax incentives granted under Framework Agreements signed between the Government and mining investors (where Government has an ownership interest). Additionally, the exemptions granted under Framework Agreements are restricted to the construction phase of mining projects, ceasing upon commencement of production.
Amendment of the anti-avoidance provision (Section 33A)
Reduction of the deemed distribution of profits from 30% to 15%; and
Exemption from the application of this provision to insurance companies, companies listed in the Dar es Salaam Stock Exchange, financial institutions as defined under the Banking and Financial Institutions Act, and mining companies which have Framework Agreements with the Government.
Amendment of single instalment tax on forest produce
- Expansion of the scope for payment of single instalment tax by resident individual on the sale of forest produce to cover natural varnish including latex, resin, sap and gum. Previously, the requirement only covered timber, logs, mirunda and poles.
- The single instalment tax is payable at the earlier of: (a) payment received; (b) produce about to be transported; (c) parting with possession or control; or (d) payment of forest cess under the Local Government Finance Act.
- Persons who have paid single instalment tax under section 116A are not required to file a return of income if they do not have any other income.
Presumptive income tax regime changes:
- A 12-month income tax holiday for newly registered taxpayers operating exclusively under the presumptive income tax regime, commencing from the date of TIN registration;
- An increase in the presumptive income tax upper threshold from TZS 100m to TZS 200m per annum;
- An option for taxpayers with annual turnover below TZS 200m to prepare audited financial statements for the purpose of adopting the self-assessment framework; and
- An increase in the presumptive income tax rate from 3.5% to 4% for taxpayers with turnover between TZS 11m and TZS 200m.
Increase of digital service tax rate to 3% (from 2%).
Introduction of a fixed income tax liability of TZS 120,000 for resident individuals engaged in transportation of passengers using three wheelers (commonly known as “Bajaji”).

Value-added tax (VAT)

Removal of the expiry limit (of 30 June 2026) on VAT deferment for imported capital goods.
Ministerial powers to prescribe additional requirements through a Gazette for VAT deferment approval.
Clarification and apportionment mechanism on withholding VAT rates - 15% for goods and 12% for services; where a supply has both elements, apportioned in the ratio of 3:2 for goods and services respectively.

Compliance obligation for withholding VAT agents to pay and file statement of VAT withheld within 10 days.

Digital intermediaries deemed suppliers for VAT purposes.
Expansion of the definition of electronic services to include a “catch all” phrase “any other any other service of a similar nature delivered through internet or a telecommunications network.

Exemptions

New exemptions:
- Aviation sector – a supply of turbo-propellers, other gas turbines (HS Heading 84.11) and aircraft tyres (HS 4011.30.00).
- Electric vehicle charging stations - importation by licensed electric vehicle charging service providers (HS Code 8504.40.00).
- LPG Smart Meters (HS Code 9028.10.00) - importation by distributors of liquefied petroleum gas.
Removal:
- Air charter services - VAT exemption expired on 30 June 2026, now subject to standard 18% VAT.
Extensions:
- Extension of exemption for double refined edible oil from locally grown seeds by a local manufacturer to 30 June 2027.
- Extension of locally manufactured garments made from locally grown cotton to 30 June 2027.

Excise duty

Shift from a three-year to an annual excise duty adjustment for specific rates (i.e. year-on-year actual inflation for the period ending March plus 2%) with an 8% increase in FY 2026/27.
Introduction of excise duty remission for mining licence holders with Government framework agreements, on goods used during construction of mining projects with Government ownership interest (excluding petroleum products).
Excise duty extended to capture non-residents providing or delivering excisable services through the internet or any other electronic form to unregistered resident persons.
Excise duty on used imported vehicles - 18% for vehicles aged 8-10 years, 35% for vehicles aged 10-20 years, and 40% for vehicles aged more than 20 years.
Increase in excise duty rates on perfumes, toilet waters, cosmetics and beauty preparations from 10% to 15%.
Introduction of excise duty on imported footwear (HS 6402.99.00) at 10%.
Introduction of excise duty on imported artificial flowers and foliage (HS 67.02) at 20%.
Introduction of excise duty on electric water heaters and other electro-thermic appliances (HS 8516.79.00) at 10%
Introduction of excise duty on small motor vehicles with cylinder capacity not exceeding 1,000 cc (assembled) at 5%.
Imported UV/LED gel nail curing machines for manicure or pedicure (HS Code 8516.79.00) at 10%.

Other taxes and levies

Stamp duty on lease instruments now extends beyond leases of immovable property to leases of movable property.
Several stamp duty amounts have increased such as on partnership instruments, cheques and on surrender of lease.
Introduction of Industrial Development Levy (IDL) on exercise books and notebooks (HS 4820.10.00, 4820.20.00) at 5%, fishing net (HS 5608.11.00) at 10%, steel structure (HS 7308.90.99) at 10%, aluminium doors and windows (HS 7610.10.00) at 5%, and trailers at 5%.
Reinstatement of the IDL exemption on goods originating from EAC Partner States, subject to a reciprocity condition where a Partner State imposes trade barriers on goods from the United Republic.