Tanzania: Tax proposals in 2025/2026 budget

Includes income tax, VAT, and excise duty amendments 

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June 16, 2025

The 2025/2026 budget—presented on June 12, 2025—introduced several tax proposals, including regarding:

  • Income tax
    • Thin capitalization rules
    • Increase in alternative minimum tax (AMT) for loss making corporations
    • Offset of tax losses - extractive sector
    • Introduction of 3.5% single instalment tax on forestry products
    • Removal of exemption when export processing zones and special economic zones products are sold locally
  • Value added tax (VAT)
    • Exemption on cooking gas tanks and cylinders
    • Exemption on natural gas
    • News without tax
    • Zero rating on fabric and garments
    • Zero rating of fertilizers
    • Reduction of VAT from 18 % to 16% on online business to customer transactions
  • Tax Administration Act, CAP 438
    • Integration of invoicing systems with Tanzania Revenue Authority system
    • Waiver of tax deposit to validate objections
  • Excise duty amendments
    • New goods subject to excise duty
    • Increased tariff rates
    • Reduced excise duty rates

Read a June 2025 report (26 pages) prepared by the KPMG member firm in Tanzania

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