Effective 1 July 2025, Tanzania’s Finance Act ushers in significant amendments to the country’s tax and regulatory frameworks. The reforms touch nearly every sector—from income tax and VAT to excise, insurance, mining, and trade. Here are the key highlights:

1. Income Tax Adjustments

• Withholding Tax on Retained Earnings: Companies must now distribute retained earnings within 12 months of filing returns or face a 10% withholding tax.
• Loss Carry Forward: The deductible loss cap rises to 40% of taxable income for select sectors (mining, manufacturing, petroleum).
• Expanded WHT Coverage: New 10% WHT applies to management fees, gaming ads, reinsurance, and hired vehicles.

2. VAT Overhaul

• Reverse Charge on B2B Transactions: Government withholding agents will deduct 3% and remit 15% VAT on applicable transactions.
• E-Commerce VAT: A 16% VAT applies to B2C digital services from 1 September 2025.
• Import VAT Deferment Expanded: Capital goods importers can now defer VAT without value limits.

3. Compliance and Administration

• Certified Tax Returns: High-earning taxpayers must have returns certified by CPAs.
• Digitalisation: Enhanced e-filing platforms, contract disclosures, and transfer pricing penalty regime now apply.
• Vehicle Licence Fee Hike: Charges for 5-seaters, for example, rise from TZS 80,000 to 120,000.

4. Excise Duty and Industry Levies

• New Excise Tariffs: Furniture, ice cream, e-cigarettes, and matches face higher duties.
• Withdrawn Proposals: No telecom levy or carbon tax—for now.
• Import/Export Levies: Importer tax bands (5–15%) and a 30% export levy on veneer plywood introduced.

5. Sectoral Highlights

• Mining: At least 20% of gold must be locally processed; new 0.1% health levy imposed.
• Tourism: Inbound foreign visitors must buy $44 emergency insurance starting Jan 2026.
• Wildlife Revenue Sharing: Districts near protected areas will now benefit from tourism earnings.

What This Means for Businesses

Companies must update tax systems, review contracts, and train finance teams for the sweeping compliance and procedural shifts. Key opportunities lie in loss utilization, domestic sourcing, and VAT recovery optimization.

Timely adaptation is critical—especially as TRA gears up enforcement and digital platforms roll out across sectors.