Tanzania: Tax measures in Finance Act 2025
Includes income tax, VAT, tax administration, and excise duty amendments
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October 13, 2025
Tanzania's Finance Act 2025, enacted on June 30, 2025, includes the following tax measures effective from July 1, 2025:
- Income tax
- Introduction of 10% withholding tax on undistributed retained earnings
- Introduction of 10% withholding tax on vehicle hire and gaming commissions
- Introduction of 2% tax on forest product revenue
- Increase in withholding taxes on insurance, reinsurance, and extractive sector services to 10%
- Increase in alternative minimum tax (AMT) for loss making corporations to 1% of gross turnover
- Reduction in loss carry-forward limits for mining and petroleum sectors to 60%
- Removal of 10-year exemption when export processing zones and special economic zones products are sold locally
- Value added tax (VAT)
- Introduction of exemption for reinsurance premiums and clean energy equipment
- Reduction in VAT rate for business-to-consumer (B2C) transactions
- Tax administration
- Introduction of mandatory digital tax system registration, including penalties for digital violations
- Expansion of private rulings
- Introduction of new VAT compliance requirements
- Imposition of mandatory collection and allocation of HIV response levy to specific health funds
- Introduction of new tax requirements for high-income individuals and corporations
- Excise duty amendments
- Increase in rates on telecoms and alcoholic beverages
- Introduction of excise duties on carbon emissions and imported items
- Reduction in rates for energy drinks and ethyl alcohol
For more information, contact a KPMG tax professional in Tanzania:
Samwel Esupu | sesupu@kpmg.com.tz