Tanzania: Tax measures in 2026/2027 budget

The Ministry of Finance on June 17, 2026, presented the 2026/2027 national budget emphasizing tax reforms. The budget focuses on modernizing tax administration, enhancing revenue collection, and ensuring efficient resource use to support economic growth and resilience.

The tax proposals include the following:

Tax administration updates

• The Tax Administration Act will be amended to allow the Tanzania Revenue Authority (TRA) to sell seized perishable goods via auction or private treaty.
• TRA plans to expand its presence with more offices and mobile tax centers in high-activity areas.
• Digitalization initiatives include leveraging AI, big data, and blockchain to enhance efficiency and transparency.
• Integration of government systems (TAUSI and IDRAS) would streamline business licensing and tax clearance processes.
• A free mobile app for issuing electronic fiscal device (EFD)-equivalent receipts will be developed to lower compliance costs for small and medium enterprises (SMEs).
   

Income tax proposals

• Introduction of a 1% withholding tax on food crops, livestock, and fish products.
• Expansion of withholding tax obligations to include more government entities.
• 12-month tax holiday for newly registered taxpayers under the presumptive tax regime.
• Increase in the presumptive tax turnover threshold from TZS 100 million to TZS 200 million
• Digital services tax for nonresident providers increased from 2% to 3%
   

VAT changes

• VAT refunds must be processed within 30 days, with interest accruing on delays.
• VAT exemptions would be introduced for electric vehicle charging equipment and LPG smart meters.
• VAT exemptions would be extended for locally produced edible oil and packaging materials for dairy products.
   

Other proposed changes

• Customs processing fees would increase from 0.6% to 1% to fund electronic revenue systems.
• The period for out-of-court tax dispute settlements would be extended from 60 to 90 days.
   

East African Community (EAC) Customs Management Act updates

• Import duties increased on several products to protect local industries, including aluminum bars, washing powder, and ceramic tiles.
• Duty remissions granted for inputs like packaging materials and raw materials for local manufacturing.
   

Excise duty adjustments

• New excise duties would be introduced on imported artificial flowers, UV/LED nail curing machines, and motorcycles.
• Scope of the excise duty would be extended to nonresident digital service providers.
   

Stamp duty revisions

• Stamp duty on agricultural land transfers would change from a flat rate to 0.5% of land value.
• An increased stamp duty would apply to bills of sale, cheques, and lease surrender documents.
• Stamp duty would expand to include movable property leases and increased for various instruments.

Read a June 2026 report (47 pages) prepared by the KPMG member firm in Tanzania