Table of Contents
- Overview of Tanzania’s Tax System in 2025
- Key Tax Rates: Corporate, Personal, VAT, and More
- Recent Legislative Changes and 2025 Budget Highlights
- Compliance Requirements: Filing, Deadlines, and Penalties
- Sector-Specific Taxation: Mining, Agriculture, and Tourism
- Incentives and Exemptions: Opportunities for Businesses
- Tax Administration and Digitalization Initiatives
- International Tax Treaties and Cross-Border Implications
- Forecast: Tax Trends and Reforms Through 2029
- Official Resources and Guidance from the Tanzania Revenue Authority (tra.go.tz)
- Sources & References
Overview of Tanzania’s Tax System in 2025
Tanzania’s tax system in 2025 is characterized by a combination of direct and indirect taxes, administered primarily by the Tanzania Revenue Authority (TRA). The government continues to rely on tax revenues as the main source of public finance, supporting infrastructure, social services, and economic development. The tax regime is governed by several key laws, including the Income Tax Act (Cap. 332), the Value Added Tax Act (Cap. 148), the Tax Administration Act (Cap. 438), and relevant annual Finance Acts.
The main forms of taxation in Tanzania are:
- Income Tax: Applies to individuals, partnerships, and corporations. Resident individuals are taxed on worldwide income, while non-residents are taxed on Tanzanian-sourced income. The individual progressive tax rates for 2025 remain between 0% and 30%, while the corporate income tax rate is generally 30%, with a reduced rate of 25% for newly listed companies on the Dar es Salaam Stock Exchange for the first three years (Tanzania Revenue Authority).
- Value Added Tax (VAT): The standard VAT rate is 18%, imposed on the supply of goods and services as well as on imports. Certain goods and services are exempt or zero-rated, particularly to support key sectors such as agriculture and education (Tanzania Revenue Authority).
- Excise Duty: Levied on specific goods such as alcoholic beverages, tobacco, and petroleum products, with periodic reviews announced in annual budgets.
- Other Taxes: Include customs and import duties, skills and development levies, local government taxes, and stamp duty.
Recent government efforts have focused on broadening the tax base, improving compliance, and enhancing digital tax administration. The TRA has intensified the use of electronic fiscal devices (EFDs), e-filing, and real-time monitoring to reduce evasion and streamline collections (Tanzania Revenue Authority). In the 2024/2025 Budget, the government emphasized further digitization and targeted measures against the informal sector to boost domestic revenue mobilization (Ministry of Finance).
Statistically, tax revenue constituted approximately 11.8% of GDP in recent years, with the government aiming to increase this to 13% by 2026. Compliance rates are estimated to be improving, especially among large taxpayers, though challenges persist in small and informal businesses. Looking forward, Tanzania’s tax outlook for 2025 and beyond anticipates continued reforms, increased automation, and closer integration with regional tax frameworks to enhance efficiency and revenue performance.
Key Tax Rates: Corporate, Personal, VAT, and More
Tanzania’s tax regime is administered by the Tanzania Revenue Authority (TRA) under the oversight of the Ministry of Finance. The country’s tax structure comprises direct and indirect taxes, with key rates legislated in the annual Finance Act. As of 2025, the following are the principal tax rates and structures in effect:
- Corporate Income Tax (CIT): The standard CIT rate remains at 30% for resident companies. A reduced rate of 25% applies for newly listed companies on the Dar es Salaam Stock Exchange for the first three years, provided they sell at least 30% of their equity to the public. Special rates are available for certain sectors, such as 20% for corporations engaging in oil and gas exploration under defined contracts (Tanzania Revenue Authority).
- Personal Income Tax (PIT): Resident individuals are taxed on a progressive scale. For the 2024/2025 tax year, rates start at 0% for monthly income up to TZS 270,000, rising to 30% for income exceeding TZS 720,000 per month. Non-residents are taxed at a flat 15% on employment income, subject to certain conditions (Tanzania Revenue Authority).
- Value Added Tax (VAT): The standard VAT rate is 18% on taxable goods and services supplied in Mainland Tanzania and on imports. Certain supplies, including exports and specific foodstuffs, are zero-rated or exempt as detailed in the VAT Act and its schedules (Tanzania Revenue Authority).
- Withholding Tax: Withholding tax rates vary by payment type. For example, dividends are generally subject to a 5% rate, interest at 10%, and royalties at 15%. Rates may be reduced under double taxation agreements (Tanzania Revenue Authority).
- Other Key Taxes: Excise duties, stamp duty, and skills development levy (SDL) also apply. SDL is charged at 4% of gross emoluments paid by employers. The social security contributions rate is typically 10% by both employer and employee (National Social Security Fund).
Recent budgets have focused on widening the tax base and enhancing digital tax administration to improve compliance and revenue collection. The outlook for 2025 and the coming years includes continued digitization, stronger enforcement, and possible rate adjustments in line with fiscal policy, as outlined in the latest Finance Act and government budget speeches (Ministry of Finance).
Recent Legislative Changes and 2025 Budget Highlights
Tanzania’s 2025 tax landscape is shaped by significant legislative changes and budgetary adjustments, reflecting the government’s ongoing efforts to enhance domestic revenue mobilization and foster economic growth. The 2025 Finance Bill, tabled in June 2024 and enacted thereafter, underpins these reforms, with a particular emphasis on broadening the tax base, tightening compliance, and modernizing tax administration.
A major feature of the 2025 budget is the revision of Value Added Tax (VAT) exemptions and incentives. The government has moved to rationalize exemptions, especially in sectors previously considered high-risk for revenue leakages. For instance, VAT exemptions for certain agricultural and health products have been streamlined to focus on items with direct impact on social welfare, while ensuring that the revenue base is not unduly eroded. Similarly, amendments to the Income Tax Act have been introduced, targeting more effective taxation of the digital economy and cross-border transactions.
On compliance, the Tanzania Revenue Authority (TRA) is rolling out enhanced digital platforms for tax registration, filing, and payment. The Electronic Fiscal Device (EFD) system, which requires businesses to issue fiscal receipts for every transaction, is being reinforced with stricter enforcement and integration with the TRA’s central database. Additionally, the government is prioritizing the expansion of the TRA’s taxpayer register to include the informal sector, aiming to capture a broader range of economic activity.
For the fiscal year 2024/2025, the government set an ambitious domestic revenue target of TZS 28.1 trillion, representing approximately 13% of GDP—a modest increase from the previous year. These projections are underpinned by anticipated improvements in tax administration and compliance rates. The government also signaled an intention to gradually reduce reliance on trade-related taxes by expanding direct and indirect domestic taxes, in line with medium-term revenue strategies outlined by the Ministry of Finance.
Looking forward, Tanzania’s tax policy direction is expected to remain focused on digitalization, compliance, and equity. Reforms are likely to continue targeting the informal sector, property taxes, and the taxation of emerging business models. As the government balances the need for fiscal consolidation with socioeconomic objectives, ongoing consultations with stakeholders indicate that future tax measures will seek to be both growth-supportive and inclusive.
Compliance Requirements: Filing, Deadlines, and Penalties
In Tanzania, tax compliance is governed primarily by the Tax Administration Act, 2015 and overseen by the Tanzania Revenue Authority (TRA). Compliance requirements encompass taxpayer registration, timely filing of returns, accurate tax payment, and record retention. In recent years, the TRA has enhanced digitalization efforts, including the mandatory use of electronic filing and payment systems for most taxes, aiming to increase efficiency and transparency in the tax system.
- Filing Requirements: Companies and individuals must register for a Taxpayer Identification Number (TIN) before commencing taxable activities. Annual income tax returns for companies are due within six months after the end of the accounting period, typically by June 30 for entities with a December 31 year-end. Individuals must file income tax returns by June 30 of the following year. Value Added Tax (VAT) returns are filed monthly, by the 20th day of the month following the reporting period, as stipulated in the Value Added Tax Act, 2014.
- Payment Deadlines: Income tax for companies is paid in four quarterly installments, with the final balance due upon filing the annual return. Individuals and partnerships follow a similar installment system. VAT and pay-as-you-earn (PAYE) taxes are due by the 20th day of the month following the taxable period (Tax Administration Act, 2015).
- Record Keeping: Taxpayers are required to retain records for at least five years from the end of the tax period to which they relate and must provide them to the TRA upon request.
- Penalties: Failure to file returns or pay taxes on time incurs penalties and interest. As of 2025, late filing of income tax returns attracts a penalty of TZS 225,000 for individuals and TZS 1.5 million for entities per return, plus 5% of the tax unpaid per month (Tax Administration Act, 2015). Interest on late tax payments is charged at 5% per annum above the prevailing Bank of Tanzania discount rate.
The government has been strengthening audit and enforcement capacity and expanding digital platforms, such as the TRA Online Tax System, to facilitate compliance. The outlook for 2025 and subsequent years includes continued digitization, stricter enforcement, and likely updates to penalties and procedures in line with regional and international standards. Taxpayers are encouraged to stay informed of changes via the Tanzania Revenue Authority to avoid non-compliance risks.
Sector-Specific Taxation: Mining, Agriculture, and Tourism
Tanzania’s tax framework for sector-specific industries—particularly mining, agriculture, and tourism—remains a central pillar of the nation’s fiscal strategy in 2025. Each sector is subject to distinct tax regimes and compliance requirements, reflecting their economic importance and policy priorities.
- Mining Sector: The mining sector is governed by the Mining Act, Cap. 123, which prescribes royalties, corporate income tax (CIT), and export levies for mineral producers. Royalties range from 3% (for industrial minerals) to 6% (for diamonds and metallic minerals). The government has continued enforcement of the 2023 amendments requiring mineral dealers to sell minerals through government-licensed exchanges, ensuring better revenue capture. The sector’s effective tax rate often exceeds 50% when aggregating direct and indirect taxes. Compliance is monitored by the Tanzania Revenue Authority and Ministry of Minerals. In 2024, mining contributed approximately TZS 2.7 trillion in tax revenue, representing over 35% of export earnings, with projections indicating moderate growth as new projects commence in 2025 and beyond (Ministry of Minerals).
- Agriculture Sector: Agriculture, which employs about 65% of Tanzania’s workforce, benefits from VAT exemptions on certain inputs and products, as outlined in the Value Added Tax Act, Cap. 148. However, the sector is subject to produce cess (a turnover-based local government levy, capped at 3% of farm-gate price) and withholding tax on payments to agricultural suppliers. While smallholder farmers are largely outside the formal tax net, commercial agribusinesses face standard CIT at 30%. Government policy continues to promote tax incentives to boost investment in agro-processing, though compliance remains a challenge due to informality and weak enforcement (Tanzania Revenue Authority). The sector’s tax contribution is expected to grow gradually, in line with modernization and value addition initiatives.
- Tourism Sector: Tourism, a top source of foreign exchange, is taxed through VAT (18%), excise duties, and a tourism development levy (3% of gross turnover). Accommodation, park entry fees, and tour services are closely monitored for compliance, with digital fiscal devices now mandatory for VAT-registered businesses. In 2024, tourism receipts rebounded to over USD 2.5 billion, with tax collections projected to rise in 2025 as visitor numbers recover further (Tanzania National Parks Authority). The government is streamlining tax administration to encourage investment and curb underreporting.
Looking ahead to 2025 and beyond, Tanzania’s sector-specific tax policies are expected to evolve with ongoing digitalization of revenue collection, targeted incentives for value addition, and enhanced enforcement mechanisms, maintaining a balance between fiscal needs and investment attractiveness.
Incentives and Exemptions: Opportunities for Businesses
Tanzania continues to leverage tax incentives and exemptions as strategic tools for attracting both foreign and domestic investment, with policies evolving into 2025 to support national development priorities. The Tanzania Revenue Authority (TRA) administers a framework that includes sector-specific incentives, notably for manufacturing, agriculture, mining, and tourism. Recent finance acts and government directives have adjusted these frameworks to balance revenue mobilization with investor appeal.
One of the prime vehicles for tax incentives is the Tanzania Investment Centre (TIC), which grants “Strategic Investor Status” to qualifying projects. Benefits can include reduced corporate income tax rates, VAT exemptions on imports of capital goods, and relief from customs duties. In 2024 and 2025, the government reaffirmed its commitment to these incentives, particularly within Special Economic Zones (SEZs) and Export Processing Zones (EPZs). Businesses operating in these zones may benefit from ten-year corporate tax holidays, duty-free imports, and VAT exemptions on raw materials and machinery.
Tax incentives are also extended through sectoral laws. The Ministry of Agriculture continues to drive exemptions for agricultural inputs and implements, aiming to boost productivity and value addition. The Ministry of Minerals oversees similar provisions for mining, especially in relation to capital goods and exploration activities. The 2024/2025 budget highlighted a commitment to further rationalize these incentives to ensure they directly stimulate domestic manufacturing and exports.
However, compliance with exemption criteria is increasingly stringent. The TRA has enhanced monitoring to curb abuse and ensure that exemptions are granted only to genuinely eligible entities. Businesses are now required to submit comprehensive documentation and undergo periodic reviews. Enforcement mechanisms have been strengthened, with revocation of incentives possible in cases of non-compliance or misrepresentation.
Key statistics indicate that tax incentives contributed to a sustained increase in registered investment projects, with the TIC reporting a year-on-year growth of over 15% in new approvals between 2022 and 2024. The government’s outlook for 2025 and beyond emphasizes targeting incentives to sectors aligned with the Ministry of Finance’s industrialization and export-led growth agenda. Ongoing reviews aim to streamline the regime, improve transparency, and ensure that incentives translate into tangible economic benefits for Tanzania.
Tax Administration and Digitalization Initiatives
Tanzania has embarked on significant reforms in tax administration, with a pronounced focus on digitalization to enhance compliance, transparency, and efficiency. The Tanzania Revenue Authority (TRA), the main agency responsible for tax collection and enforcement, continues to drive these initiatives in alignment with the government’s broader digital transformation agenda.
A key milestone in recent years is the expanded rollout and mandatory use of Electronic Fiscal Devices (EFDs) for businesses across various sectors. The EFD system requires registered taxpayers to issue receipts for every sale, thereby improving VAT collection and reducing revenue leakages. As of 2024, the TRA further upgraded the EFD platform, introducing new models with greater integration capabilities and real-time data transmission features. The enforcement of these measures is expected to intensify in 2025, with penalties for non-compliance stipulated under the Tax Administration Act, Cap. 438 and its subsequent amendments Tanzania Revenue Authority.
In addition to EFDs, the TRA has accelerated the implementation of its Online Filing System (OFS), enabling taxpayers to file returns and make payments electronically. By early 2025, the TRA aims for near-universal adoption of e-filing among medium and large taxpayers, and is expanding its outreach to micro and small enterprises through capacity-building campaigns and technical support. This digital shift aligns with the government’s “Digital Tanzania Project,” which seeks to leverage technology in public service delivery, including tax administration Ministry of Finance.
The impact of these digitalization efforts is reflected in improved compliance rates and rising tax revenues. According to TRA statistics, tax collections reached TZS 23.65 trillion in the 2022/2023 fiscal year, surpassing targets and marking continued growth over previous years Tanzania Revenue Authority. The Authority projects further increases in 2025, driven by enhanced enforcement and digital monitoring.
Looking ahead, the Tanzanian government is prioritizing data analytics, inter-agency data sharing, and automation of tax processes. The TRA’s 5-year Corporate Plan (2022/23–2026/27) outlines strategic investments in digital infrastructure, cybersecurity, and taxpayer education to sustain these gains. However, challenges remain, including digital literacy gaps and connectivity issues in rural areas. Addressing these will be crucial as Tanzania seeks to broaden its tax base and optimize revenue amid evolving economic conditions.
International Tax Treaties and Cross-Border Implications
Tanzania’s approach to international tax treaties and cross-border taxation continues to evolve in response to global economic integration and domestic revenue needs. As of 2025, Tanzania is a party to several Double Taxation Agreements (DTAs), primarily with countries such as Canada, Denmark, Finland, India, Italy, Norway, South Africa, Sweden, and Zambia. These treaties are designed to prevent double taxation, foster cross-border investment, and enhance tax certainty for international businesses and expatriates operating within Tanzanian jurisdiction.
In recent years, Tanzania has signaled its intent to renegotiate and expand its treaty network, with a focus on aligning treaty provisions with the domestic anti-avoidance measures introduced under the Income Tax Act and the Tax Administration Act. Notably, the government has prioritized incorporating OECD/G20 Base Erosion and Profit Shifting (BEPS) recommendations, particularly concerning the prevention of treaty abuse and strengthening transfer pricing regulations.
Cross-border taxation compliance remains a significant area of focus for the Tanzania Revenue Authority (TRA). The TRA has intensified scrutiny of related-party transactions and introduced new documentation requirements for multinational enterprises, including country-by-country reporting obligations for entities meeting certain turnover thresholds. These measures aim to curb profit shifting and ensure the appropriate allocation of taxing rights on cross-border income.
Key statistics from the TRA indicate that international tax compliance audits have increased, yielding a rise in audit adjustments and additional tax assessments, particularly in sectors such as mining, telecommunications, and banking. The TRA’s 2023/2024 annual report noted a marked uptick in tax collections attributed to improved enforcement of cross-border taxation rules, contributing to an overall increase in domestic revenue mobilization.
Looking ahead to 2025 and beyond, Tanzania is expected to further harmonize its tax treaty provisions with global standards. The government’s commitment to the OECD/G20 Inclusive Framework on BEPS signals ongoing reforms in transfer pricing, digital taxation, and exchange of information. Businesses engaged in cross-border transactions should anticipate continued regulatory vigilance, with a particular emphasis on substance requirements, beneficial ownership tests, and real-time information exchange.
In summary, Tanzania’s international tax treaty landscape is becoming increasingly robust, with regulatory changes aimed at countering tax avoidance and protecting the domestic tax base. Stakeholders should monitor legislative updates and ensure rigorous compliance to mitigate risks and leverage treaty benefits effectively in the coming years.
Forecast: Tax Trends and Reforms Through 2029
Tanzania’s tax landscape is at a pivotal juncture as the government intensifies reform efforts to improve compliance, widen the tax base, and boost domestic revenue mobilization through 2029. Key drivers include digitization, legislative amendments, and a focus on the informal sector, all aligned with broader fiscal and development goals.
The Tanzania Revenue Authority (TRA) has spearheaded recent reforms, notably through the Electronic Fiscal Devices (EFD) initiative, which aims to enhance VAT compliance and reduce underreporting. The 2024/2025 budget speech outlined additional digital initiatives, including e-filing enhancements and the integration of mobile payment platforms, expected to further streamline tax collection and curb leakages (Ministry of Finance).
Legislatively, the government continues to update tax statutes to reflect evolving economic realities. The Finance Act 2024 introduced amendments to the Income Tax Act and VAT Act, including adjustments to tax rates, new anti-avoidance measures, and incentives for priority sectors such as agriculture and manufacturing. Notably, the threshold for VAT registration remains under review, with a view to bringing more small and medium enterprises into the formal tax net (Parliament of Tanzania).
Statistically, tax revenue as a percentage of GDP has shown gradual improvement, reaching approximately 12.3% in the 2023/2024 fiscal year, with government targets set at 15% by 2029. The TRA reported that total tax collections in 2023–2024 exceeded TZS 25 trillion, marking a 10% increase from the previous year (Tanzania Revenue Authority).
Looking forward, tax policy is expected to focus on:
- Expanding the digital tax base, particularly through e-commerce and digital service taxation initiatives.
- Further simplification of tax compliance for SMEs and the informal sector, including presumptive tax schemes and incentives for formalization.
- Strengthening enforcement and audit capabilities via advanced analytics and inter-agency collaboration.
As Tanzania pursues middle-income status and strives to finance its ambitious development agenda, ongoing tax reforms and modernization efforts are set to play a crucial role in broadening revenue, improving fiscal sustainability, and supporting inclusive growth (Ministry of Finance).
Official Resources and Guidance from the Tanzania Revenue Authority (tra.go.tz)
The Tanzania Revenue Authority (TRA) is the principal government institution responsible for tax administration, collection, enforcement, and taxpayer services in Tanzania. Its official website (Tanzania Revenue Authority) provides comprehensive resources and guidance for taxpayers—both individuals and businesses—regarding their rights, obligations, and recent developments in the Tanzanian tax landscape as of 2025.
- Tax Laws and Regulations: TRA provides direct access to key tax laws, including the Income Tax Act, Value Added Tax (VAT) Act, Tax Administration Act, and sector-specific legislation. All amendments and Finance Acts are published annually, outlining new tax rates, exemptions, and compliance measures. For the 2024/2025 fiscal year, updates reflect the government’s continued focus on revenue mobilization and broadening the tax base (Tanzania Revenue Authority).
- Electronic Services and E-filing: TRA’s online portal supports electronic registration, tax return filing, and payment systems. The e-filing system is now mandatory for most categories of taxpayers, in line with ongoing digitalization initiatives. The platform issues e-TIN (Taxpayer Identification Number), enables VAT registrations, and facilitates electronic issuance of fiscal receipts for businesses (Tanzania Revenue Authority).
- Guidance and Educational Materials: TRA regularly publishes taxpayer education materials, guides, and FAQs addressing recent changes in tax laws, filing procedures, and compliance requirements. These resources are updated each fiscal year to reflect new policies and are available in both English and Kiswahili. The 2025 guides cover updates on digital tax administration, presumptive tax schemes for small businesses, and sectoral incentives (Tanzania Revenue Authority).
- Compliance and Enforcement Information: The TRA outlines penalties for non-compliance, audit procedures, and voluntary disclosure opportunities. Taxpayers can access information on dispute resolution processes, including objection filing, appeal procedures, and recent tribunal rulings. The website provides annual compliance calendars and reminders for filing deadlines, which are crucial for avoiding fines (Tanzania Revenue Authority).
- Statistics and Performance Reports: TRA publishes annual revenue performance reports, illustrating key statistics such as total tax collections, compliance rates, and sectoral contributions. The latest reports indicate a steady increase in domestic revenue mobilization, with a target to raise the tax-to-GDP ratio close to 15% by 2026 (Tanzania Revenue Authority).
As Tanzania advances its digital transformation and broadens the tax base, official TRA resources will remain essential for staying compliant and informed on evolving tax obligations.
