HIGHLIGHTS ON GOVERNMENT BUDGETThe Government of Tanzania through the Minister of Finance and Planning, Hon. Dr. Mwigulu Nchemba, on 14 June 2022 presented the Government’s Budget for the financial year 2022/23 before the National Assembly.
Below are the highlights of the presented budget:
Minister of Finance granted powers to waive income tax for strategic investors after approval of National Investment Steering Committee (NISC).
Minister of Finance reinstated the power to remit any interest or penalty after consultation with the Commissioner General of the Tanzania Revenue Authority (TRA).
Proposed introduction of 3.5% income tax rate for taxpayers with turnover above TZS 11M but not exceeding TZS 100M.
Proposed payment of taxes through mobile wallets.
Introduction of withholding tax on rentals paid by individuals for residential apartments, houses and commercial premises.
Proposed introduction of digital services tax rate of 2% to non-resident service providers.
Exemption of withholding tax on coupon for Corporate and Municipal Bond.
Reduction of the withholding tax rate of 15% to 10% on payments made to non-residents in the film industry.
Proposed introduction of 2% final withholding tax on payments to small scale miners.
Proposed introduction of income tax of TZS 3,500,000 per year on each truck and passenger buses.
Exemption of capital gain tax on equity shares freely surrendered to the Government through the Treasury Registrar.
Proposed of advance income tax of TZS 20 per litre for retailers of petroleum products.
Elimination of VAT exemption on smart phones, tablets and moderns.
Elimination of VAT exemption on supply of air charter service
Minister of Finance granted powers to exempt VAT on strategic investors after approval of National Investment Steering Committee (NISC)
Proposed exemption of VAT on standing trees,
Proposed exemption of VAT on fertilizer manufactured locally for one year
Proposed exemption of VAT on double refined edible oil.
Proposed exemption of VAT on dairy packaging materials
Amendment of VAT Act, Cap 148 to accommodate taxation of the digital services
Reduction of the Workers Compensation Fund (WCF) contribution rate from 0.6% to 0.5%.
Amendment to reduce money transaction levy on sending and withdrawing monies from maximum of TZS 7,000 to TZS 4,000 on each transaction.
Proposed fee of between TZS 1,000 to TZS 3,000 on the Television Decoder Subscription depending on the use.
Proposed reduction of hotel levy from 10% to 5%.
Mandatory insurance to include commercial buildings, imported goods, public markets, marine vessels, ferries and pontoons.
The proposed changes are still in discussions. We expect the changes to be operative once they are published in the Finance Act, 2022.