The budget speech highlighted key fiscal changes, which included a new withholding tax, higher alternative minimum tax, and VAT adjustments.

Tanzania’s Minister of Finance, Mwigulu Nchemba, has presented the 2025-26 Budget Speech to parliament on 12 June 2025.  The budget includes several tax measures to shape the country’s fiscal policies, such as a new withholding tax, an increased alternative minimum tax, and VAT changes.

New withholding taxes

  • A 10% withholding tax on undistributed retained earnings after six months
  • A 2% withholding tax on raw salt purchases from Primary Mining License holders or Artisanal Miners
  • A 10% final withholding tax on gambling and sports betting advertisement commissions

Increased withholding taxes

  • The withholding tax on insurance and reinsurance premiums paid to non-resident companies increased from 5% to 10%
  • The withholding tax on payments for professional and management services in the extractive sector increased from 5% to 10%

Higher alternative minimum tax (AMT) 

The AMT for companies with losses over three consecutive years has been increased from 0.5% to 1.0%.

Forestry products revenue tax

A 3.5% income tax on forest product revenue has been introduced, payable as a single instalment per cargo value.

Reduced loss carry-forward limit 

The loss carry-forward limit for mining, petroleum, oil, and gas sectors has been reduced from 70% to 60% of the current year’s profits.

Income tax exemption for EPZs and SEZs

The 10-year income tax exemption for EPZ and SEZ investors has been abolished when the produced goods or services are sold locally.

Service levy

  • The local service levy has been reduced from a variable rate up to 0.3% to a flat 0.25% on gross income
  • The local hotel levy has been cut from 10% to 2%

Value added tax (VAT)

The VAT rate has been lowered to 16% from 18% on B2C online payments.

Other tax measures

  • The industrial development levy has been expanded to include a broader range of imported products, with rates between 5% and 15%
  • Cooking gas tanks and cylinders will be tax-exempt
  • Natural gas will be tax-free
  • News publications will remain untaxed
  • Fabrics and garments will have zero tax
  • Fertilisers will also be zero-rated

If approved, the measures are expected to take effect from 1 July 2025.