Latest Regulatory Updates

Finance Act 2025/26
Key Updates & Compliance

Stay informed with the latest Finance Act changes, TRA compliance requirements, and regulatory developments affecting Tanzanian businesses. Expert analysis and practical guidance.

URGENT UPDATE

Finance Act 2025/26 - Key Updates

Major amendments affecting taxation, compliance, and financial regulations in Tanzania. Effective 1 July 2025

Income Tax Updates
Major changes to corporate and individual taxation
  • Deemed Dividend Tax: 30% of undistributed profits after 12 months
  • AMT Increase: From 0.5% to 1% of turnover
  • Capital Gains Tax: Non-residents increased from 20% to 30%
  • Loss Utilization: Reduced from 70% to 60% of taxable income
VAT Amendments
Significant changes to VAT rates and compliance
  • VAT Withholding: 3% on goods, 6% on services
  • Digital Transactions: 16% VAT for B2C via digital payments
  • Zero-Rating Extended: Fertilizers, garments, solar equipment
  • Online Marketplaces: Brought under VAT net
Excise Duty Changes
New rates and compliance requirements
  • Telecom & Pay-TV: Increased from 5% to 7%
  • Carbon Emissions: TZS 22,000 per tonne levy
  • Filing Deadline: Returns due by 25th of following month
  • License Validity: Now 12 months from issuance
Tax Administration Reforms
Digital transformation and compliance
  • Mandatory ETAS: Electronic Tax Administration System
  • Penalties: Up to TZS 60M for non-compliance
  • Small Traders: Recognition without immediate tax burden
  • Appeal Process: Clear 30-day response timelines

New Withholding Tax Requirements

The Finance Act 2025/26 introduces several new withholding tax obligations that businesses must implement immediately.

Motor Vehicle Hire
10%

Withholding tax on motor vehicle hire payments to service providers.

Insurance Premiums
10%

Withholding tax on (re)insurance premiums paid to non-residents.

Industrial Minerals
10%

Withholding tax on purchases of industrial minerals including salt.

Forest Produce
2%

Withholding tax on sales of forest produce effective January 2026.

Impact on Business Operations

These reforms will significantly impact corporate cash flows, compliance requirements, and sector-specific strategies across Tanzanian businesses.

Cash Flow Impact
New WHT and AMT requirements affect working capital
System Upgrades
ETAS integration and VAT withholding systems required
Contract Reviews
Review contracts and dividend policies for tax efficiency
Sector Analysis
Impact assessments for mining, manufacturing, and trade

Fanilish Investment Advisory

We recommend immediate action to ensure compliance and optimize your tax position under the new regulations.

  • Early Tax Planning
    Manage new WHT, AMT, and loss limitations
  • Systems Integration
    ETAS platform and CPA certification readiness
  • Strategic Review
    Capital structure and dividend policy optimization
  • Compliance Monitoring
    Ongoing regulatory compliance and updates

Key Implementation Dates

Critical dates for Finance Act 2025/26 implementation and compliance requirements.

July 1, 2025
General Effective Date
  • Income Tax amendments
  • VAT changes
  • Excise duty adjustments
  • New withholding taxes
January 1, 2026
Additional Requirements
  • Forest produce WHT (2%)
  • Travel insurance mandate
  • Non-EAC/SADC visitors
  • Enhanced compliance monitoring
Ongoing
Compliance Requirements
  • ETAS system integration
  • CPA certification (TZS 100M+)
  • Monthly excise returns (25th)
  • VAT withholding certificates

Sector-Specific Impacts

How the Finance Act 2025/26 affects different industries and business sectors in Tanzania.

Mining & Extractives

Significant changes affecting mining operations, mineral exports, and extractive industries.

  • 10% WHT on industrial minerals
  • Mandatory subcontract disclosure
  • Enhanced reporting requirements
  • Capital gains tax implications

Manufacturing

Impact on manufacturing operations, supply chains, and export-oriented businesses.

  • VAT withholding on supplies
  • EPZ/SEZ tax holiday changes
  • Zero-rating extensions
  • Export levy on veneered sheets

Telecommunications

Changes affecting telecom operators, digital services, and technology companies.

  • Excise duty increase to 7%
  • Digital transaction VAT
  • Online marketplace regulations
  • ETAS compliance requirements

Trade & Services

Impact on trading companies, service providers, and small to medium enterprises.

  • Small trader recognition
  • Service VAT withholding
  • Motor vehicle hire WHT
  • Foreign investment restrictions

Stay Compliant with Expert Guidance

Don't let regulatory changes catch you off guard. Our experts are here to guide you through the Finance Act 2025/26 implementation and ensure full compliance.