Executive summary

On 30 June 2025, the President of the United Republic of Tanzania assented the Finance Bill into law, which took effect from 1 July 2025 as Finance Act 2025 (the Act). This Alert provides a comprehensive review of the key amendments introduced by the Act, highlighting their implications for various stakeholders and the overall economic landscape.

All changes are effective from 1 July 2025, unless specified otherwise.

Detailed discussion

Income Tax Act

Inclusion of positive retained earnings in the definition of "Equity"

The term "Equity" has been expanded from paid-up share capital to now include positive retained earnings. The amendment will have an impact on the debt-to-equity ratio for thin capitalization by expanding the equity base to include positive retained earnings for profit-making companies.

However, it is important to note that this amendment is not entirely new, as the definition of equity encompassed retained earnings prior to July 2022. The explicit reference to positive retained earnings is presumably designed to exclude negative retained earnings from equity for thin-capitalization purposes.

Under the new definition, companies with positive retained earnings will have a higher equity-to-debt ratio compared to the previous approach, which only included paid-up share capital. This change may make it easier for companies to obtain debt financing.

The amendment will likely provide some relief to certain sectors such as the banking sector. According to the Income Tax Act, a bank's fixed deposits are treated as debts and hence affect the equity-to-debt ratio by increasing the debt. The change will likely cushion the amount of interest disallowed, as retained earnings will increase the amount that is treated as equity.

Taxation of undistributed profit

The Commissioner General for Tanzania Revenue Authority (CG) is granted discretionary powers to treat as distributed 30% of profits that have remained undistributed 12 months following the year-end.

The deemed distribution will be subject to withholding tax at the rate of 10%; if an entity subsequently makes a distribution to its members, withholding tax will not apply to the amount deemed distributed.

However, the law does not apply to resident corporations with foreign ownership because the Revenue Authority considers these corporations as controlled foreign corporations and any of the members' unallocated income is deemed as distributed. However, on-going tax litigation has examined the interpretation of the law, with the latest decision coming from the Tax Revenue Appeals Tribunal in favor of the taxpayer.

The amendment may have the effect of discouraging business expansion efforts by taxing capital in the form of retained earnings.

One key issue is interpreting the phrase: "Where the Commissioner determines that an entity has not made distribution." The Commissioner must first determine non-distribution before triggering a deemed distribution. It is unclear whether distributing a small portion of profits exempts a taxpayer from the CG deeming a distribution, or if distributing 30% or more would suffice.

Subsequent transfer of assets acquired from an associate or for no consideration

Under the previous rules, if a person (Person A) transfers an asset to an associate or to any other person (Person B) by way of gift, Person B is considered to have spent the same amount as the asset's value (i.e., the higher of market value and the net cost of the asset) immediately before it was transferred.

The amendment requires that if Person A subsequently realizes or transfers ownership of the asset, the cost of the asset for purposes of computing gains or losses shall be the net cost of the asset at the time Person B acquired the asset and subsequent cost after acquisition as if Person A and Person B were the same persons.

The intention of the amendment seems to be to prevent abuse by acquiring an asset from an associate or for no consideration, for the purpose of subsequent reselling. In such a case, the cost of the asset will be the net cost and not the market value; hence there will be a gain to be computed, unless the net cost of asset is the same as the market value.

Limitation of tax losses carried forward in the extractive sector

The amendment would reduce from 70% to 60% the limit for carrying forward losses that can be deducted during income tax calculations, applicable for certain businesses, including:

• Mining, petroleum, oil and gas industries
• Licensees conducting processing, smelting or refining activities
• Licensees conducting midstream or downstream activities with respect to petroleum

The amendment standardizes the tax rules for carrying forward tax losses in the extractive sector so that they are consistent with those applied in other sectors.

Reduced corporate tax rate for listed entities with at least 25% of stocks issued to the public

The amendment decreases from 30% to 25% the percentage of equity ownership that an entity is required to issue to the public to be eligible for a reduced corporate tax rate of 25% for three consecutive years from the date of listing.

This measure is likely to encourage companies to utilize the capital markets, as well as encourage investors to invest in the capital markets. Further, telecommunication companies that are required to list at least 25% of their stock to the public will enjoy this reduced rate simply by meeting the listing requirement under the Electronic and Postal Communications Act.

Increase of alternative minimum tax (AMT) rate

The AMT rate payable by an entity with perpetual unrelieved losses for three consecutive years has been increased from 0.5% to 1% of the entity's turnover. AMT is applicable on the turnover of the third year of loss making.

The amendment increases tax burden to loss-making entities, especially those with significant investments that take time to materialize.

Restriction of income tax exemption applicable to investors in EPZ and SEZ

The income tax exemption available to investors within the Export Processing Zone (EPZ) and Special Economic Zone (SEZ) has been restricted to exporting investors and does not apply to investors who produce for sale into the domestic market or who offload products into the domestic market in respect of offloaded products.

The amendment may result in investors' focusing more on exports than domestic sales. However, this could present challenges for investors in EPZ and SEZ areas regarding the management of by-products that are not exportable and are sold domestically.

Withholding tax

The following changes have been made to withholding tax requirements:

• A new 10% non-final withholding tax has been added on commission payments derived from gaming advertisement or promotion.
• A new 10% non-final withholding tax is imposed on hired motor vehicles.
• The final withholding tax rate has been increased from 5% to 10% on insurance premium payments paid to nonresident persons. The amendment may discourage nonresidents from insuring risks in Tanzania. In addition, the increased tax rate could result in an increase of insurance costs to the insured persons.
• The final withholding tax rate has been increased from 5% to 10% on payments for technical and management services provided in the extractive sector by a resident person. The amendment will increase the tax burden on such entities and could discourage investment in the country by such businesses.

Single installment tax

The tax rate is increased from 20% to 30% payable by a nonresident person who derives gain from the realization of an interest in land, petroleum or mineral rights or buildings situated in the United Republic, a license or concessional right on reserved land shares, or securities held in a resident entity. The amendment has aligned the law with the existing practice.

A new single-installment tax is payable by a resident person who receives payment from the sale of forestry produce at a rate of 2% of gross payment. Gross payment is defined as farm gate price, purchasing price, or the value of the forest produce as determined by Tanzania Forest Service Agency, whichever is greater. This measure is intended to widen the tax base. The change will be operation from 1 January 2026

Requirement for certified returns of income

The Act now requires that individuals with an annual turnover exceeding 500 million Tanzanian shillings (TZS500m), and corporations with gross income exceeding TZS100m, must have their returns prepared or certified by a certified public accountant in public practice.

Value-Added Tax (VAT)

New phrases and definitions

The Act has introduced the following new phrases and their definitions

• "Assisted Government entity" means a government entity in respect of which the CG is empowered to collect considerations for a taxable supply payable to such entity.
• "Withholding agent" means: the Ministry responsible for finance; a government entity which retains whole or part of its collected revenue; and a registered person as may be appointed by the CG by notice.

The definition of the term "resident" for VAT purpose has been amended to mean an entity incorporated or registered in Mainland Tanzania or an individual whose permanent home is in Mainland Tanzania. Previously, resident referred only to an individual and a separate definition applied for the term "resident company." Following this amendment the definition of the term resident company is expected to be deleted.

Withholding VAT

The Act introduces a new concept of withholding VAT, under which a withholding agent is required, when a standard-rated supply of goods or service is made in Mainland Tanzania to:

• Withhold 3% and remit it to the CG, and a withholding agent will pay the supplier 15% of the VAT amount for supply of goods
• Withhold 6% and remit it to the CG, and a withholding agent will pay the supplier 12% of the VAT amount for supply of services

It is important to note that, although the Act specifically states that the rate payable to a taxable person supplying service shall be 12%, it does not state that the rate payable to a taxable person supplying goods to be 15%.

The withholding agent shall, no later than the day on which VAT becomes payable, issue to the supplier a VAT withholding certificate in a prescribed manner generated by the system approved by the CG. A taxable person may subtract output tax withheld by an agent only if the person has a valid VAT withholding certificate when filing the VAT return for that period; otherwise, subtraction is not permitted.

Considering current technology, the deduction should have been automatic when filing the VAT return without a need to be supplied with the withholding tax certificate for VAT.

The Act further requires the withholding agent to account for and remit output tax withheld at the time the VAT return is due to be filed or in a manner as may be directed by the CG.

This amendment will become operational from 1 September 2025.

Given the requirements introduced, withholding agents have limited time to familiarize themselves with the requirements, including integrating the requirements into the existing taxpayer's portal for filing of tax returns.

New VAT rate

A 16% VAT rate is introduced to apply on standard-rated supplies of goods or services that are made in Tanzania Mainland to an unregistered person who pays for the supply using a bank or electronic payment system approved by the CG.

A taxable person who made a taxable supply at the rate of 16% must submit a proof of bank payment or electronic payment showing that the consideration for that supply was made electronically or through the bank. The submission should be done through the system or in any manner directed by the CG.

This amendment will become operational from 1 September 2025, and the CG will issue a public notice specifying the eligible persons and procedures for implementing this arrangement.

This amendment may promote the use of electronic payments by the designated persons in line with initiatives promoting financial inclusion. Considering that the amendment has been paused up to September, additional clarity is anticipated in terms of system integration and the procedures to apply and implement the 2% VAT relief.

Advance VAT for assisted Government entities

The Act introduces a new requirement for advance VAT applicable to assisted Government entities. Based on the amendment, if an assisted Government entity makes a supply and the CG collects the payment for that supply, the VAT included is considered as an advance VAT paid by the entity to the CG.

The amendment requires the CG to issue a certificate of advance VAT to an assisted Government entity one day after the end of the relevant tax period. The Government entity must submit this certificate for the relevant tax period when filing the VAT return whereas in determining the payable tax amount, the advance VAT indicated on the certificate is included in the calculation.

Extension of time to commence business for an intending trader

The VAT Act is amended to give powers to the CG to grant or refuse extending the time for an intending trader to commence business. If the CG refuses to grant extension of time, the intending trader's VAT registration will be deemed de-registered.

According to the VAT Act, an intending trader must notify the CG within 90 days following the expiration of the period initially indicated for commencing the production of taxable supplies if economic activities have not begun as stated. After this notification, the CG will decide whether or not to extend time and provide reasons.

Expansion of electronic services

The amendment has expanded the definition of electronic services to now include, online intermediation services or platform, including an online accommodation marketplace and payment services platform. The amendment will remove ambiguities and reduce the chances of dispute on what is included as electronic services or not. Also, this measure is aimed at widening the tax base.

Extending time for zero-rating supply of fertilizer and cotton garments

The amendment extends the time for zero rating of the supply of locally manufactured fertilizer, as well as locally manufactured garments made from locally grown cotton, to 30 June 2028 and 30 June 2026, respectively. For certainty in doing business, would be helpful for the Government to consider a longer period.

Abolishment of VAT exemptions

The amendment excludes the following agricultural implements from VAT exemption:

• Forks with HS Code 8201.90.00
• Rakes with HS Code 8201.30.00
• Axes HS Code 8201.40.00
• New pneumatic tires of a kind used in agricultural and forest vehicles with HS code 4011.70.00
• Dam liner with HS Code 3920

Changes on existing VAT exemptions

The following changes have been made to current VAT exemptions:

• The amendment limits the VAT exemption on unprocessed sisal to unprocessed sisal fiber.
• The VAT exemption on newspaper is now limited to newspapers printed and published locally by a person licensed under the Media Services Act.
• The VAT exemption that was available to transportation of persons by any means of conveyance, excluding among others rental cars, has been amended to now exclude all rental motor vehicles and not only rental cars.
• The VAT exemption on solar batteries has been restricted to solar batteries specifically designed exclusively for use in storage of solar power.
• The VAT exemption on the supply of double-refined edible oil from locally grown seeds by a local manufacturer has been extended until 30 June 2026.
• The VAT exemption on the supply of aircraft has been restricted to aircraft of heading 88.02 "(Other aircraft (for example, helicopters, aeroplanes), except unmanned aircraft of heading 88.06; spacecraft (including satellites) and suborbital and spacecraft launch vehicles)."
• The VAT exemption on the supply of aircraft engine and aircraft parts to a local manufacturer or assembler of aircraft or to a local operator of air transportation has been restricted to only cover aircraft engine of HS Code 8407.10.00 and aircraft parts of heading 88.07, excluding parts of goods of heading 88.01 and 88.06.
  • This means that the exemption will only cover parts of aircraft of heading 88.02 "(Other aircraft (for example, helicopters, aeroplanes), except unmanned aircraft of heading 88.06; spacecraft (including satellites) and suborbital and spacecraft launch vehicles)."
• Pesticides that are VAT exempt have been expanded from pesticides containing bromomethane (methyl bromide) or bromochloromethan under HS Code 3808.99.10 and others under HS Code 3808.99.90 to include pesticides containing alpha-cypermethrin (ISO), bendiocarb (ISO), bifenthrin (ISO), chlorfenapyr (ISO), cyfluthrin (ISO), deltamethrin (INN, ISO), etofenprox (INN), fenitrothion (ISO), lambda-cyhalothrin (ISO), malathion (ISO), pirimiphos-methyl (ISO) or propoxur (ISO) under HS Code 3808.61.00, 3808.62.00 and 3808.69.00.
• The amendment rewords the VAT exemptions applicable to imports of CNG plants and equipment to a non-exhaustive list including CNG Compressors, CNG metering equipment, CNG storage cascades, CNG special transportation vehicles and CNG dispenser by a natural gas distributor. Previously, the list was exhaustive.

New VAT exemptions

Reinsurance is now VAT exempt.

A VAT exemption is added on the supply of piped natural gas specifically for being converted to Compressed Natural Gas (CNG) to be used exclusively for fueling motor vehicle from 1st July 2025 to 30th June 2028.

VAT exemptions on import include:

• An import of carbonization furnace of HS Code 8417.80.00 for exclusive use in manufacturing of briquettes
• An import of new pneumatic tires of a kind used in agricultural and forest vehicles of HS Code 4011.70.00; dam liners of heading 39.20; forks of HS Code 8201.90.00; rakes of HS Code 8201.30.00 and axes of HS Code 8201.40.00 as certified by the Ministry responsible for agriculture

Deadline for filing VAT returns

The Act has been amended to remove the rule allowing VAT returns due on weekends or public holidays to be filed on the next working day. It is unclear if the Government now expects filing exactly on the deadline, even if it falls on a weekend or holiday, or if the change aims to align with other laws using the Interpretation of Laws Act, Cap 1.

Input tax credit for imports

The Act now allows a taxable person to claim an input tax credit for imports only if they have paid the VAT. This change eliminates the option to claim an input tax credit if the VAT has not yet been paid, even if the person is liable for it.

Excise (Management and Tariff) Act

Definition of financial institution

A "financial institution" has been defined to mean a bank or financial institution established or licensed under the Bank of Tanzania Act or the Banking and Financial Institutions Act, including a microfinance service provider falling under Tier 1 recognized under the Microfinance Act. With this amendment, microfinance service providers falling under Tiers 2, 3 and 4 are excluded from the application of excise duty.

License expiration

The license to manufacture any excisable goods will now expire after 12 months from the date of issuance. Prior to this amendment, a license expired on 31 December each year. The amendment will ensure that a license holder obtains a 12-month validity period, especially for licenses issued after the month of January.

Payment of duty

The deadline for paying excise duty to the CG has been set to be no later than 25th day of the month following the month to which the return relates.

The amendment harmonizes the timeline for payment of excise duty with the timeline for filing excise duty returns. Prior to the amendment, the law was unclear on the timeline of payment of excise duty.

Remission of duty on un-denatured ethyl alcohol

Remission of excise duty, subject to the Minister's approval, is granted for undenatured ethyl alcohol (HS Code 2207) utilized in the manufacture of products that are not classified as excisable under the following headings.

• 22.04 (Wine of fresh grapes, including fortified wines; grape must other than that of heading 20.09),
• 22.05 (Vermouth and other wine of fresh grapes flavored with plants or aromatic substances) and
• 22.08 (Undenatured ethyl alcohol of an alcoholic strength by volume of less than 80% vol).

This is in addition to the previous year's similar remission on the production for industrial energy or uses for medical/laboratory purposes.

Obtaining approval from the respective Minister prior to applying to the CG could be challenging. Additionally, the absence of a prescribed timeline for the process, from the approval stage to remission, could result in delays.

Adjustment and introduction of excise duty

Changes have been made to adjust excise duty rates on a variety of goods and services, including:

• Increased excise duty rate from 5% to 7% on the service for pay-to-view television provided by licensed operators of cable, terrestrial infrastructure, satellite or other technology other than the Government or the local government authority
• New 10% excise duty rate on a service provider of money transfer and payment system who employs independent systems other than financial or telecommunication systems; expands the tax base to include service providers of money transfer and payment system who employ independent systems
• New 20% excise duty on imported used tableware, kitchenware, utensils, cutlery and other related products of headings 39.24, 44.19 and 82.15, HS Code 7323.91.00, 7323.92.00, 7323.93.00, 7323.94.00, 7323.99.00, 7418.10.00, 7615.10.10 and 7615.10.90
• New excise duty at a rate of 5% for locally produced and 10% for imported sausages and similar products of meat, meat offal, blood or insects; food preparations based on these products under HS code 1601.00.00
• Reduced excise duty rate from TZS7,000 to TZS5,000 on imported undenatured ethyl alcohol of an alcoholic strength by volume of 80% vol or higher; for locally produced the rate has been reduced from TZS5,000 to TZS4,000
• New 10% excise duty on imitation jewelry under heading 71.17
• Increased excise duty rate from 20% to 25% on various imported seat under heading 94.01 and furniture under heading 94.03

This amendment has been adopted as measures to mitigate health, protect domestic industries, reduce environmental impact and increase Government revenue.

Tax Administration Act (TAA)

Private ruling on residence

Any private ruling that the CG issues in favor of a person relating to tax residence status shall be accompanied with a tax residency certificate in a manner determined by the CG.

Recognition of small-scale traders

Small-scale traders that are properly registered by relevant authority and operating informally are to be recognized by the Tanzania Revenue Authority (TRA). The authority responsible for registration of small-scale traders shall, in addition to any other prescribed criteria, register traders whose annual turnover is below the minimum taxable income specified under the Income Tax Act and who have Tax Identification Numbers. It is not clear what the result will be when the position of the relevant authority conflicts with that of the TRA, however.

The Minister responsible for finance, in consultation with the relevant authority, may establish regulations outlining the fees, procedures for recognition and registration, and any other matters related to small-scale traders.

However, the amendment is unclear on the respective authority for registration of small-scale traders.

Electronic system for tax administration

The Act has amended the TAA to obligate the CG to establish and operate a computerized electronic system for filing, furnishing, storing, archiving and accessing electronic documents and carrying out any other tax administration functions.

The application of the system includes:

• Only registered users may access, file or receive documents from this system. The CG is, however, empowered to cancel a user's registration upon breach of conditions for registration.
• An electronic document will be considered to have been filed and received by the CG if a document registration number is created in the system by using a person's authentication code. The same applies to electronic documents that the CG serves to the person.
• The provisions of the Electronic Transactions Act as to the validity authenticity and admissibility of electronic documents shall apply equally to electronic documents created in the system.
• The CG may authorize a printed document to be treated as a copy of an electronic document, which must be accepted by courts or tribunals as conclusive evidence of its nature and content, unless proven otherwise.

The amendment further grants the CG discretionary powers to require any person who owns or operates an electronic system to interface or connect their system with the established system for tax purposes, subject to specific terms and conditions.

The amendment introduces sanctions for noncompliance, including imprisonment for up to three years or a fine of up to 1,000 currency points (TZS10m) in case of an individual or a fine of up to 3,000 currency points (TZS60m) in case of an entity on the following:

• Unlawful access or attempt to access the system
• Use or disclosure of information obtained in the system for unauthorized purposes
• Unauthorized receipt of information obtained from the system and using, disclosing, publishing or otherwise disseminating such information
• Falsifying records or information stored in the system
• Interfering, tampering with, damaging or impairing the system
• Deliberately failing to interface an electronic system with the CG's system upon being required

The implementation of the integration requirement would, however, require adequate guidance from the CG such as on the integration process, timelines in case of network malfunction, and the applicability of weekends and public holiday in timelines for submitting documents electronically.

Disclosure of subcontractor in the construction and extractive sectors

Entities engaged in the construction and extractive sectors are now required to disclose names of the persons, value of the contract, nature of subcontracted works and the duration of carrying out the works within 30 days from the date of commencement of the subcontracted works in the manner as may be prescribed by the CG.

However, the amendment is unclear regarding what constitutes the date of commencement of subcontracted works, which can make it difficult to determine the due date for the filing. Further, another provision that requires disclosure 30 days from the date of execution of the contract could cause more confusion.

Clarity on admission of objections

The Act has clarified that, for objections that involve a liability to pay tax, an objection will be deemed to have been admitted on the date the taxpayer complies with filing requirements (i.e., fulfilling a tax deposit requirement or being granted waiver as well as the filing of the objection within the required timeframe).

However, the wording of the amendment might cause confusion, as it may be construed to mean that the objection can be deemed admitted either on the date of filing the objection or the payment of one-third deposit (either full or lesser amount).

Objections that do not involve liability to pay tax (e.g., an objection relating to tax refund or loss carried forward) will be deemed to have been admitted on the date of service of the objection to the CG.

Determination of objection

The Act has been amended to the effect that TRA proposal to settle an objection constitutes an objection decision if:

• The taxpayer fails to respond to the proposal on time (30 days)
• Six months lapses without a final determination

This amendment will require taxpayers to be more proactive to manage and track timelines for dispute settlement.

Transfer pricing penalty

The Act is amended to introduce a transfer pricing (TP) adjustments penalty, even for entities with tax losses. Previously, the penalty applied only to tax shortfalls and did not address entities with tax losses. The amendment has expanded the applicability of TP penalties to loss-making entities. However, some tax disputes around the new amendment are already underway, imposing TP penalties on loss-making entities (i.e, the revenue authority began imposing these penalties even before this amendment).

Restrain of asset

The Act is amended to introduce a maximum three-month period during which the TRA may restrain assets for the purpose of issuing a jeopardy or adjusted assessment. This amendment provides taxpayers with increased clarity regarding the TRA's authority to restrain assets; previously no specific timeframe was stipulated

Changes in other laws

The Act has made changes to other laws including but not limited to:

Business Licensing Act

The Act is amended to prohibit issuing business licenses to noncitizens unless such a business is allowed for noncitizens. The Minister responsible for trade must specify which business activities are prohibited for noncitizens.

On 28 July 2025, the Minister for Industry and Trade, published a Business Licensing (Prohibition of Business Activities for Non-Citizens) Order, 2025 listing the following business as not open to noncitizens:

1. The business of sale of goods on a wholesale and retail basis, excluding supermarkets, specialized product outlets, and wholesale centers for local producers.
2. Mobile money transfers
3. Repair of mobile phones and electronic devices.
4. Salon business unless the business is conducted in a hotel or for tourism purposes
5. Home, office and environmental cleanliness
6. Small-scale mining
7. Postal activities and parcel delivery within the country
8. Tour guiding within the country
9. Establishment and operation of radio and television
10. Operation of museums or curio shops
11. Brokerage or agency in businesses and real estate
12. Clearing and forwarding services
13. On-farm crop purchasing operations
14. Ownership or operation of gambling machines or devices, except within casino premises
15. Ownership and operation of micro and small industries

According to the laws of Tanzania a person is citizen if born in the United Republic of Tanzania and at least one of the parents is citizen of Tanzania. In case born outside Tanzania, a person is citizen by naturalization/registration or by descent from one of the parents being a Tanzanian.

It is important to note that the Order does not explicitly clarify whether it applies to corporate entities wholly owned by noncitizens.

Since its issuance, several member states of the East African Community (EAC) have expressed concerns regarding the Order's potential inconsistency with Article 13 of the EAC Common Market Protocol, which guarantees EAC citizens the right of establishment to conduct economic activities in other EAC countries.

Further, the licensing authority will no longer have power to close business premises of any trader who is found to carry on business without a license.

Gaming Act

The Act has been amended by introducing the electronic filing of returns and remitting withheld gaming tax on winnings on or before the seventh day of the month following the month of payment of the winning. With the introduction of electronic filing of return, the amendment has removed the requirement to submit a return of certificate of payment of the withheld gaming tax that was submitted not later than 15 days following the end of each calendar month.

Imports Control Act

Changes have been made to adjust the industrial development levy (IDL) rates on a variety of goods, including but not limited to:

• Removal of a 10% IDL on cement clinkers under HS Code 2523.10.00
• Introduction of a 15% IDL on pasta under heading 19.02 and imported laundry or bar soap under HS Code 3401.11.99 and 3401.19.00
• Introduction of a 10% IDL on various items including furniture, prefabricated buildings, optical fiber cables
• Introduction of a 5% IDL on various items including starch, liquid glucose, ceramic tiles, flat rolled products and certain categories of glass

The amendment has paused the application of IDL on starch, pasta and optical fiber cables to 1 January 2026.

The amendment has abolished the exemption applicable to goods originating from East African Community Partner States that meet the East African Community Rules of Origin.

Insurance Act

The Act is amended to introduce a mandatory inbound travel insurance at a premium amount of TZS equivalent to US$44 to foreigners entering Mainland Tanzania through land, seaport or airport upon arrival. This requirement will not apply to residents of the East African Community Partner States or Southern African Development Community Partner States.

Although the term foreigner has not been defined it presumably does not cover Tanzania resident re-entering the country.

The inbound travel insurance will provide emergency assistance for up to 92 days from the date of arrival in case of medical emergencies, loss of luggage, emergency medical evacuation or repatriation.

Local Government Finance Act

The following changes are made in the Act:

• Reduced hotel levy from 10% to 2%
• Fixed city service levy at 0.25% of gross revenue from the previous capped rate to the maximum of 0.3%.
• Removed mandate of local Government Authorities to charge charges, levy or fee on loading and offloading

These changes will provide relief to businesses due to reduction of the levies.

Mining Act

The Act is amended to introduce a 0.1% levy on the gross value of minerals, to be collected by the mining commission. The levy shall become due and payable at the time of payment of royalty by persons liable to pay royalty.

Road and Fuel Tolls Act

The following changes are made in the Act:

• Increased the road and fuel tolls of petrol and diesel by TZS10 from TZS513 to TZS523 per liter
• Introduces road and fuel tolls on kerosine at the rate of TZS 10 per liter
• Allocates TZS7 per liter on petrol, diesel and kerosine to the AIDS Trust Fund established under the Tanzania Commission for AIDS Act and TZS3 to the Universal Health Insurance Fund established under the Universal Health Insurance Act

Universal Health Insurance and HIV Response Levy

Various laws have been amended to establish funding for universal health insurance and HIV response levy including the following levies:

• Land-based casinos shall be taxed at a rate of 13% on the amount or value of winnings provided that, 8% of the collected amount shall be distributed to AIDS Trust Fund and to Universal Health Insurance Fund by 70% and 30% respectively.
• Sports betting shall be taxed at the rate of 12% on the amount or value of winnings, provided that 17% of the collected amount shall be distributed to AIDS Trust Fund and to Universal Health Insurance Fund by 70% and 30% respectively.
• The excise duty rate is increased from: TZS620 to TZS630 per liter on locally produced beer made from 100% locally grown barley; TZS918.00 to TZS928 per liter on beer made from wholly or partially imported barley; and TZS963.00 to TZ 973 per liter on imported beer. From this, TZS7 goes to the AIDS fund and TZS3 to the Universal Insurance Fund.
• The excise duty is increased by TZS15 per liter on various wines under heading 22.04 and 22.05, as well as on fermented beverages under heading 22.06. The collected amount will be distributed by TZS10.5 going to the AIDS fund and TZS 4.5 going to the Universal Insurance Fund.
• The excise duty is increased by TZS25 on various alcohols and spirits under heading 22.08. The collected amount will be distributed by TZS17.5 going to AIDS Fund and TZS7.5 going to Universal Insurance Fund.
• A new 0.1% levy on the gross value of minerals will be collected by the mining commission. The collected amount will be distributed by 70% to AIDS Fund and 30% to Universal Insurance.
• The road and fuel tolls will be increased from TZS513 to TZS523 per liter of petrol and diesel. The collected amount will be distributed by TZS7 going to AIDS Fund and TZS3 going to Universal Insurance Fund.
• New road and fuel tolls will be imposed on kerosine at the rate of TZS10 per liter. The collected amount will be distributed by TZS7 going to the AIDS Fund and TZS3 going to the Universal Insurance Fund.
• A motor vehicle registration tax will range from TZS50,000 to TZS250,000 based on type and engine size. The collected amount will be distributed by 70% to AIDS Fund and 30% to Universal Insurance Fund.
• A TZS500 levy will be added on train tickets. The collected amount will be distributed by 70% to AIDS Fund and 30% to Universal Insurance Fund.
• A new requirement will pay to the Aids Fund 6% of moneys collected as airport service charge on passengers traveling to a destination within Tanzania and 0.7% for those traveling outside Tanzania.