Amendments to the Value Added Tax Law

Exemption of VAT on Video Assistant Referee Equipment;

The Tanzanian government has exempted VAT on the importation of Video Assistant Referee (VAR) equipment and accessories. This move aims to enhance sports infrastructure as the country prepares to host the 2027 Africa Cup of Nations (AFCON). The exemption requires approval from the Minister responsible for sports.

Inclusion of Single Axle Tractors in VAT Exemption;

Single axle tractors (HS Code 8701.10.00) are now included in the VAT exemption for agricultural equipment. This aligns with the East African Community Common External Tariff books of 2017 and 2022.

5% Withholding Tax on Payments to Resident Digital Content Creators;

A 5% withholding tax is now imposed on payments made by non-residents and resident businesses to resident digital content creators. This measure is expected to increase government revenue by TZS 1.643 billion.

Zero-Rating VAT on Gold Sold to the Bank of Tanzania;

Gold sold to the Bank of Tanzania is now zero-rated for VAT. This is intended to boost foreign currency reserves, address the shortage of US dollars, and support local gold refineries.

Reduction of Excise Duty on Bottled Drinking Water;

The excise duty on locally produced bottled drinking water has been reduced from TZS 63.80 per liter to TZS 56 per liter (HS Codes 2201.10.00 and 2201.90.00). This aims to stimulate small-scale water production, reduce consumer costs, and promote safe drinking water, though it will decrease government revenue by TZS 474 million.

Excise Duty on Un-denatured Ethyl Alcohol;

An excise duty of TZS 7,000 per liter on imported un-denatured ethyl alcohol with 80% or more alcohol content, and TZS 5,000 per liter on the same product produced domestically, has been introduced (HS Code 2207.10.00). This measure, aimed at protecting domestic industries, is expected to increase government revenue by TZS 154.55 billion.

10% Excise Duty on Betting Stakes;

A 10% excise duty on the value of betting stakes in national lotteries and gambling games has been introduced. The revenue will fund health insurance for underprivileged groups, particularly pregnant women and children under five, with an expected contribution of TZS 29.522 billion.

These measures reflect the government's efforts to enhance fiscal policies, support local industries, and prepare for significant international events while ensuring equitable taxation and boosting revenue.