The Tanzania Revenue Authority (TRA) has announced that a reduced VAT rate will apply to B2C online purchases made through banks or approved electronic payment platforms, effective 1 September 2025.

TRA will implement a new VAT rate of 16% starting 1 September 2025.

This reduced 16% rate applies only when all of the following conditions are met:

  • The supply is subject to the standard VAT rate.
  • The transaction takes place in Mainland Tanzania.
  • The buyer is not registered for VAT.
  • Payment is made through a bank or an electronic payment system authorised by the Commissioner General.

The standard VAT rate of 18% remains applicable to all other transactions. This 16% rate is a targeted measure aimed at promoting electronic payments and enhancing tax compliance.