Tanzania: Finance Minister presented 2018-19 Budget
19 June 2018
The Minister of Finance and Planning, Hon. Dr. Philip I. Mpango, presented the 2018/19 Budget on June 14, 2018 to the national assembly. Some key points of the budget are given below:
Corporate Tax
- A reduction in the corporate income tax rate from 30% to 20% for new investors in the pharmaceutical and leather industries for five years starting from year 2018/19 up to 2022/23.
- To amend the Income Tax Act in order to provide withholding tax exemption on interest on government Loans provided through banks and financial institutions to finance government projects.
- To introduce electronic tax stamp to replace the paper tax stamp starting from September 1, 2018. It is intended to curb revenue leakages and make it possible to determine in advance the amount of taxes to be paid namely excise duty, VAT and income taxes.
- The proposed 100% amnesty on interest and penalties will exist for six months starting from July 1, 2018 up to December 31, 2018.
Excise Tax
- Excise duty on imported water including mineral waters containing added sugar or other matter of flavour will increase from shillings 61 per litre to shillings 64.05 per litre, which is an increase of shillings 3.05 per litre and the excise duty on locally produced water remains at shillings 58 per litre.
- Excise duty on imported fruit juices will increase from shillings 221 per litre to shillings 232 per litre which is an increase of shillings 11 per litre; but excise duty on locally produced fruit juices remains at shillings 9 per litre. Excise duty on soft drinks remains at shillings 61 per litre.
- Excise duty on imported beers will increase from shillings 765 per litre to shillings 803.25 per litre which is an increase of shillings 38.25 per litre; but beers made from local unmalted cereals remains at shillings 450 per litre.
- Excise duty on imported non-alcoholic beers (including energy drinks and non-alcoholic beverages) will increase from shillings 561 per litre to shillings 589.05 per litre; but non-alcoholic beers (including energy drinks and non-alcoholic beverages) produced locally remains at shillings 561 per litre.
- Excise duty on wine produced with more than 25% imported grapes will increase from shillings 2349 per litre to 2466 per litre. On the other hand, Excise duty on wine produced with domestic grapes with content exceeding 75% or wine produced with domestic fruits (such as banana, rozera and tomato) other than grapes with contents of at least 75% remains at shillings 200 per litre.
- Excise duty on imported spirits will increase from shillings 3,481 per litre to shillings 3,655.05 per litre which is an increase of shillings 174.05 per litre.
- Excise duty on cigarettes with filter tip and containing domestic tobacco more than 75% remains at shillings 29425 per thousand cigarettes and cigarette without filter tip and containing domestic tobacco more than 75% remains at shillings 12447 per thousand cigarettes. Excise duty on cigarettes not mentioned in above will increase from shillings 3,235 to shillings 55,896.75 per thousand cigarettes.
- Excise duty on cut rag or cut filler will raise from shillings 26888 to shillings 28232.4 per kilogram.
VAT
VAT exemptions for packaging materials produced specifically for use by local manufacturers of pharmaceutical products, imported animal and poultry feed additives, and sanitary pads.
Gaming Tax
There is also an increase in gaming tax include in this budget. The proposal is to change the gaming tax from 6% to 10% on gross sales in sports betting operations and from 15% to 18% on gross gaming revenue for land based casino operators.
