Finance Act 2026 (Tanzania)

On 30 June 2026, the Finance Act 2026 (2 of 2026) was published and came into effect on 1 July 2026.  

Please see below some of the areas of interest:

1. Framework Agreement entered between holder of a mining licence (ML) or special mining licence (SML) and the Government for undertaking mining operations has been included among the income which may be exempted from tax by the Minister of finance (section 10(3)(b)(iii) Income Tax Act).
   
2. Removed the Finance Bill proposed recognition of tax benefit given under a Framework Agreements executed before 1 July 2026 for ML and SML holders which was to be based on Cabinet approval (was section 169A Finance Bill).
   
3. Profit deemed distributed by company reduced from 30% to 15%, excluding companies registered on the Dar es Salaam Stock Market, financial institutions, insurance companies and mining companies that have Framework Agreements with government (section 33A Income Tax Act).
   
4. Rate payable to a taxable person supplying goods shall be 15% and to taxable person supplying service shall be 12%. Where a supply has both elements of goods and services, the taxable value which is subject to withholding shall be apportioned in the ratio of 3:2 for goods and services, respectively (section 5(5) & (7) Value Added Tax Act).
   
5. VAT Exemption for importation by or supply to a holder of ML and SML with a Framework Agreement with the Government of goods or services upon application to the TRA Commissioner General, provide that the exemption is provided under the Framework Agreement (section 6(3)(j) Value Added Tax Act). 
   
6. Withholding Agent shall, within 10 days after the end of each tax period, pay to the TRA Commissioner General any VAT that has been withheld (section 71(5) Value Added Tax Act).
   
7. Withholding Agent who is required to withhold VAT pursuant to section 5(5) shall, within 10 days of the month following the tax period to which the VAT relates, file with the TRA Commissioner General a withholding VAT statement for the tax period (section 71(6) Value Added Tax Act).
   
8. Removed Finance Bill proposed new mandatory 30 day VAT refund timeline with interest on delay from the date of the notice which was proposed under the Bill (was section 88(3)(b) Finance Bill).
   
9. Minister may, upon approval by the Cabinet and by Order published in the Gazette, remit excise duty payable by a holder of ML and SML who has entered into Framework Agreement with Government on goods imported or purchased for use during construction of mining project in which the Government has ownership interest.  The remission shall not be granted in respect of petroleum products (section 146B Excise (Management and Tariff) Act).

Please contact VELMA Law if you have any comments or questions.