A systematic breakdown of all 27 Parts of the Finance Act 2026 (Gazette No. 6, Vol. 107, June 15 2026) — with a sharp focus on how tax changes translate into higher daily living costs for Tanzanian households.
The Finance Act 2026 is Tanzania's annual omnibus tax law, gazetted on 15 June 2026 and operational from 1 July 2026. It amends 27 existing laws — spanning excise duty, income tax, VAT, stamp duty, mining, local government finance, and more — to adjust revenue collection in alignment with the national budget framework and FYDP IV development targets.
Below is a product-by-product mapping of how changes in the Finance Act 2026 translate into direct cost increases for a typical Tanzanian household, particularly those at the lower end of the income spectrum.
Excise duty on locally bottled mineral water rises from TSh 56/litre → TSh 60.48/litre (+8%). Imported bottled water: TSh 70.46 → TSh 76.10/litre. Families buying water in areas without reliable piped supply will feel this directly at kiosks and shops.
Flavoured waters and sodas: TSh 67.10 → TSh 72.47/litre (+8%). Energy drinks with <300ppm caffeine: TSh 134.20 → TSh 144.94/litre. Non-alcoholic beer: TSh 673.20 → TSh 727.06/litre (locally produced). A household buying 2 litres of soda weekly pays roughly TSh 556/week more annually — approximately TSh 28,900 extra per year.
Beer from 100% local barley: TSh 630 → TSh 680.40/litre (+8%). Beer from imported barley: TSh 928 → TSh 1,002.24/litre. Local cider: TSh 2,974.74 → TSh 3,212.72/litre. Opaque beer (Kibuku): TSh 555 → TSh 599.40/litre. Spirits such as Konyagi: TSh 4,411.06 → TSh 4,763.94/litre.
Petrol and diesel excise rates are unchanged (TSh 379 and TSh 255/litre respectively). However, residual fuel oils used in transport and industrial activities see an 8% increase (TSh 80 → TSh 86.40/litre). Motorcycle registration fees jump 58% — from TSh 95,000 to TSh 150,000 — a significant hit for boda-boda operators who are a primary income source for millions.
Excise duty on perfumes, beauty preparations, shampoos, deodorants, and toiletries rises from 10% → 15% — a 50% relative increase. This affects imported and locally available beauty and hygiene products. For lower-income urban consumers who rely on affordable imported personal care products, this is a direct affordability squeeze.
Chewing gum, candies: TSh 1,000 → TSh 1,080/kg. Sweet biscuits (imported): TSh 1,000 → TSh 1,080/kg. Tomato sauce/ketchup: TSh 300 → TSh 324/kg. Chocolate (imported): TSh 1,000 → TSh 1,080/kg. Margarine: TSh 500 → TSh 540/kg. These affect households that supplement local diets with processed or imported food products.
Many Tanzanians depend on affordable used vehicles. The Finance Act 2026 sharply increases excise duty on imported used cars: vehicles 8–10 years old: 15% → 20%; vehicles 10–20 years old: 30% → 40%; vehicles over 20 years: new rate of 50%. This makes the widely used hand-me-down vehicle market significantly more expensive, affecting informal transporters and rural residents.
A new 5% excise duty is imposed on the value of stakes placed in sports betting, casino gaming, slot machines, and virtual games — both land-based and online. This is a new tax entirely. Tanzania's growing youth betting culture means this will affect a significant share of urban youth spending. The 10% of this revenue goes to the Gaming Board of Tanzania.
A new 1% single-instalment tax on crop sales applies to buyers (section 116B). While paid by the purchasing corporation, this cost is likely to translate into lower farmgate prices for smallholder farmers — essentially a revenue squeeze at the point of crop marketing. A similar 1% withholding applies to payments for livestock products, unprocessed milk, fish, and fish maws (section 109A).
The Finance Act 2026 shifts property rate collection back to Local Government Authorities (LGAs) from TRA. A new provision requires property rates to be paid at the time of electricity bill payment (section 26 of Rating Act). This automatic linkage means urban residential and commercial property owners will face immediate, unavoidable rate collection.
Stamp duty on cheques increases from TSh 500 → TSh 700. Bills of exchange and lease instruments also face higher duties. Partnership registration duty rises to TSh 5,000–10,000. Agricultural land transfer now carries 0.5% stamp duty. These changes cumulatively raise the cost of formal financial and legal transactions.
The charts below show the actual old and new excise duty rates for key consumer product categories as specified in the Finance Act 2026.
Locally produced beverages, old vs new rates. All rates rise by 8%.
Beer and spirits categories — old vs new rates under the Finance Act 2026.
Sharp increase in excise duty on used vehicles by age band — a major change for the second-hand vehicle market.
Excise duty on beauty products (perfumes, shampoos, make-up) rises from 10% to 15%.
Excise duty on locally produced filter-tip cigarettes containing domestic tobacco >75%.
Portland, aluminous and hydraulic cements — both locally manufactured and imported see a uniform 8% increase.
The Finance Act 2026 raises the presumptive tax threshold from TSh 100 million to TSh 200 million and adjusts tax rates for businesses in the TSh 11M–200M turnover band from 3.5% to 4.5%.
Comparison of tax payable under old vs new regime for taxpayers complying with Section 43 of the Tax Administration Act.
Summary of rate changes across multiple tax categories in the Finance Act 2026.
Complete list of excise duty old and new rates per the Finance Act 2026 Fourth Schedule amendments.
All rates effective 1 July 2026. Rates shown per unit stated.
| Product / Category | HS Code | Unit | Old Rate | New Rate | % Change |
|---|---|---|---|---|---|
| Mineral water (locally bottled) | 2201.10.00 | Litre | TSh 56.00 | TSh 60.48 | +8.0% |
| Mineral water (imported, bottled) | 2201.10.00 | Litre | TSh 70.46 | TSh 76.10 | +8.0% |
| Flavoured water/soda (locally produced) | 2202.10.00 | Litre | TSh 67.10 | TSh 72.47 | +8.0% |
| Non-alcoholic beer (locally produced) | 2202.91.00 | Litre | TSh 673.20 | TSh 727.06 | +8.0% |
| Energy drinks / Other (low caffeine, local) | 2202.99.00 | Litre | TSh 134.20 | TSh 144.94 | +8.0% |
| Beer (100% local barley) | 2203.00 | Litre | TSh 630.00 | TSh 680.40 | +8.0% |
| Beer (imported/part-imported barley) | 2203.00 | Litre | TSh 928.00 | TSh 1,002.24 | +8.0% |
| Imported beer | 2203.00 | Litre | TSh 973.90 | TSh 1,051.81 | +8.0% |
| Wine (domestic grapes >75%) | 2204 | Litre | TSh 215.00 | TSh 232.20 | +8.0% |
| Wine (other/imported) | 2204 | Litre | TSh 5,615.00 | TSh 6,064.20 | +8.0% |
| Opaque beer / Kibuku (local unmalted cereals) | 2206.00.20 | Litre | TSh 555.00 | TSh 599.40 | +8.0% |
| Cider (locally produced) | 2206.00.10 | Litre | TSh 2,974.74 | TSh 3,212.72 | +8.0% |
| Spirits (imported: whisky, rum, vodka, gin) | 2208 | Litre | TSh 4,411.06 | TSh 4,763.94 | +8.0% |
| Locally produced spirit (local grapes) | 2208.20.00 | Litre | TSh 565.00 | TSh 610.20 | +8.0% |
| Fruit juices (local fruits from domestic sources) | 20.09 | Litre | TSh 9.90 | TSh 10.69 | +8.0% |
| Other fruit juices | 20.09 | Litre | TSh 255.20 | TSh 275.62 | +8.0% |
| Cigarettes (local, filter, domestic tobacco >75%) | 2402.20 | Per mil | TSh 35,310 | TSh 38,154.80 | +8.1% |
| Cigarettes (other) | 2402.20 | Per mil | TSh 67,076.10 | TSh 72,462.19 | +8.0% |
| Portland cement (all types) | 25.23 | kg | TSh 20.00 | TSh 21.60 | +8.0% |
| Margarine (imported) | 15.17 | kg | TSh 500 | TSh 540 | +8.0% |
| Sugar confectionery / chewing gum (imported) | 17.04 | kg | TSh 1,000 | TSh 1,080 | +8.0% |
| Sweet biscuits (imported) | 1905.31.00 | kg | TSh 1,000 | TSh 1,080 | +8.0% |
| Tomato sauce/ketchup (imported) | 2103.20.00 | kg | TSh 300 | TSh 324 | +8.0% |
| Matches (imported) | 3605.00.00 | kg | TSh 400 | TSh 432 | +8.0% |
| Paints/varnishes (imported) | 32.08 | kg | TSh 500 | TSh 540 | +8.0% |
| Cosmetics / perfumes / shampoos | 33.03–33.07 | kg | 10% | 15% | +50% relative |
| Imported rubber/plastic footwear (clogs) | 6402.99.00 | pair | Nil | 10% | New |
| Artificial flowers / foliage (imported) | 67.02 | kg | Nil | 20% | New |
| UV/LED nail curing machines | 8516.79.00 | unit | Nil | 10% | New |
| Motorcycles (most types, non-electric/non-CNG) | 87.11 | unit | Nil | 5% | New |
| Small cars (<1,000cc engine) | 8703.21.90 | unit | Nil | 5% | New |
| Used vehicle aged 8–10 years (imported) | 87.03 | unit | 15% | 20% | +33% |
| Used vehicle aged 10–20 years (imported) | 87.03 | unit | 30% | 40% | +33% |
| Used vehicle over 20 years (imported) | 87.03 | unit | N/A | 50% | New |
| Sports betting / gambling stake | Various | 5% of stake | Nil | 5% | New |
| Ethyl alcohol (locally produced, >80% ABV) | 2207.10.00 | Litre | TSh 4,000 | TSh 4,320 | +8.0% |
| Residual fuel oils (marine/industrial) | 2710.19.41–43 | Litre | TSh 80 | TSh 86.40 | +8.0% |
The Finance Act 2026 both removes existing VAT exemptions and introduces new ones — creating winners and losers among consumers and producers.
Goods/services granted fresh exemptions from 1 July 2026
| Item | HS Code | Purpose / Beneficiary |
|---|---|---|
| Locally-made garments from domestic cotton | Various | Cotton textile industry (1 year, expires June 2027) |
| EV charging station equipment | 8504.40.00 | Clean energy promotion |
| LPG smart meters (by distributors only) | 9028.10.00 | Clean energy / cooking gas |
| Boarding pass printing paper | Various | Aviation (ICAO compliance) |
| Aircraft turbojets, turbopropellers | 84.11 | Aviation sector investment |
| Aircraft tyres | 4011.30.00 | Aviation operating cost relief |
| Dairy packaging materials | 3920.30.90 etc. | Dairy sector support |
| Polyester yarn for fishing nets | 5402.20.00 | Fishing industry input cost |
| Edible oils from local seeds (domestic production) | Various | Consumer price relief (1 year) |
| Condoms (sheath contraceptives) | 4014.10.00 | Exempt from Railway Development Levy |
Goods losing VAT exemption — new costs pass to consumers
| Item | HS Code | Implication |
|---|---|---|
| Dog and cat food (imported & local) | 2309.10.00 | VAT now applicable — cost to pet owners |
| Imported fishing nets | 5608.11.00 | Higher input cost for fishing sector |
Finance Act 2026 clarifies withholding VAT rates in section 5
| Supply Type | Old Provision | New Provision (Finance Act 2026) |
|---|---|---|
| Supply of goods | Unclear / 12% applied generally | 15% withholding VAT |
| Supply of services | 12% | 12% withholding VAT (unchanged) |
| Mixed supply (goods + services) | No apportionment rule | 3:2 ratio (goods:services) for apportionment |
| VAT refund turnaround | Unclear timeline | 30 days from complete application; interest accrues on late refunds |
For individual businesses with turnover up to TSh 200 million/year (previously TSh 100 million)
| Turnover Band | Tax (Without Section 43 Compliance) | Tax (With Section 43 Compliance) | Change |
|---|---|---|---|
| Up to TSh 4,000,000 | NIL | NIL | No change |
| TSh 4M–200M (new TIN, 1st year) | NIL | NIL | New relief for new businesses |
| TSh 4M–7M | TSh 100,000 | 3% of turnover above TSh 4M | Unchanged |
| TSh 7M–11M | TSh 250,000 | TSh 90,000 + 3% above TSh 7M | Unchanged |
| TSh 11M–200M | 4.5% of turnover | 4.5% of turnover | Rate raised from 3.5% to 4.5% |
Summary of all income tax rate and threshold changes in the Finance Act 2026
| Provision | Old Rate/Value | New Rate/Value | Direction |
|---|---|---|---|
| Deemed retained earnings (section 33A) | 30% of taxable profit | 15% of taxable profit | Reduced (relieves corporates) |
| Withholding tax on digital services (non-resident) | 2% | 3% | Increased |
| Withholding on crop/livestock/fishery payments (section 109A) | Nil | 1% | New |
| Single instalment tax on forest produce (section 116A) | Varied / limited scope | 2% of gross payment; expanded scope | Expanded |
| Single instalment on crop sales (section 116B) | Nil | 1% of food crop value | New |
| Presumptive tax threshold | TSh 100,000,000 | TSh 200,000,000 | Expanded (relief for small businesses) |
| Presumptive rate (TSh 11M–200M band) | 3.5% | 4.5% | Increased |
| Royalties to sports/football institutions | 5% | 10% | Doubled |
| Central Bank overdraft limit (section 35) | 18% of prior year revenue | 14% of prior year revenue | Tightened (fiscal discipline) |
The Finance Act 2026 introduces new export taxes aimed at retaining raw materials domestically for value addition. It also adjusts the Industrial Development Levy on several imported product categories.
Additions to the Export Tax Act (Cap. 196) Schedule
| Product | HS Code | Rate |
|---|---|---|
| Waste & scrap paper/paperboard | 47.07 | 30% of FOB or TSh 200/kg (whichever higher) |
| Cotton cake | 2306.10.00 | TSh 50/kg |
| Sunflower cake | 2306.30.00 | TSh 50/kg |
| Wheat bran | 2302.30.00 | TSh 50/kg |
| Rice bran | 2302.40.00 | TSh 50/kg |
| Maize bran | 2302.10.00 | TSh 50/kg |
| Quartz sands | 25.06 | 10% of FOB or TSh 200/kg (whichever higher) |
| Feldspar | 2529.10.00 | 10% of FOB or TSh 200/kg (whichever higher) |
Additions to the Imports Control Act (Cap. 276) Schedule
| Product | HS Code | IDL Rate |
|---|---|---|
| Exercise books and notebooks | 4820.10.00, 4820.20.00 | 5% |
| Fishing net | 5608.11.00 | 10% |
| Steel structures | 7308.90.99 | 10% |
| Aluminium doors, windows, frames | 7610.10.00 | 5% |
| Trailers (imported, non-assembled) | 8716.31.90, 8716.39.90, 8716.40.90 | 5% |
Government overdraft limit cut from 18% → 14% of prior-year revenues. Strengthens fiscal discipline but limits emergency funding capacity.
Tax exemptions in mining Framework Agreements now codified in Income Tax, VAT, Excise, and Road Fuel laws. A Mineral Survey Fund (10% of mining revenues) is established for exploration financing.
1% instalment tax on food crop sales (buyer pays). 1% withholding on livestock, milk, fish payments. Smallholder farmers may receive lower effective farmgate prices.
VAT exemption on aircraft engines, turbines, and tyres. Boarding pass paper also exempt. Supports aviation sector competitiveness.
LGAs take back property rate collection from TRA. 15% of own-source revenue mandated: 10% to women/youth/disability loans; 5% to market infrastructure. Rates now collectible via electricity bills.
VAT exemption on EV charging stations. Condoms exempt from Railway Development Levy. LPG smart meters exempt from VAT for distributors. Petrol and diesel excise unchanged.
All sports betting, casinos, slot machines, and virtual games now face 5% excise on stake value. 10% of proceeds go to Gaming Board Tanzania.
70% to Road/Rail Fund, 25% to Consolidated Fund, 5% to Special Economic Zone infrastructure. Motorcycle registration fee raised 58% to TSh 150,000.
All Portland, aluminous, and hydraulic cements see 8% excise duty increase (TSh 20 → TSh 21.60/kg). Steel structures face new 10% IDL. Will moderately raise construction costs.
Non-resident digital platform operators now deemed suppliers for VAT. Excise duty imposed on non-resident online service providers (B2C). Withholding on digital services: 2% → 3%.
TSh 20 per 1,000 cigarettes now channelled to Universal Health Insurance Fund. TSh 10 per kg of sugar (produced domestically or imported) also allocated to the Fund.
Tax benefits from Cabinet-approved Framework Agreements override the Income Tax Act. Semi-trailer heads added to negative list (ineligible for duty exemption). Strategic project investments retain Cabinet-approved exemption powers.
This chart illustrates the estimated relative cost increase for selected household product categories as a result of excise duty changes in the Finance Act 2026, indexed to 100 (pre-July 2026 costs).
Index 100 = pre-July 2026 baseline. Columns show estimated post-Act cost index for a representative household basket.
Proportional contribution of each category to excise duty revenue base, illustrating where government collects most from consumer spending.
Cap. 189 — Changes effective 1 July 2026
| Instrument / Transaction | Old Duty | New Duty | Change |
|---|---|---|---|
| Bill of Sale (security) — minimum | TSh 1,000 | TSh 10,000 | +900% |
| Bill of Sale (security) — maximum | TSh 10,000 | TSh 100,000 | +900% |
| Partnership deed — capital ≤ TSh 1M | Variable | TSh 5,000 | Revised |
| Partnership deed — capital > TSh 1M | Variable | TSh 10,000 | Revised |
| Cheques | TSh 500 | TSh 700 | +40% |
| Surrender of Lease instrument | TSh 1,000 | TSh 2,000 | +100% |
| Bill of Exchange (property-related) | Nil | TSh 5,000 | New |
| Agricultural land transfer instrument | Nil | 0.5% of value | New |
| Movable property exchange document | Outside scope | Now included under "lease" definition | Expanded |
| Unused stamp refund charge | 10 cents per shilling | 10% of stamp value | Simplified |
All 27 Parts with key changes and citizen-level impact assessment
| Part | Law Amended | Key Change | Citizen Impact |
|---|---|---|---|
| I | Preliminary | Short title; effective 1 July 2026 | Administrative |
| II | Bank of Tanzania Act (Cap. 197) | Overdraft limit cut from 18% → 14%; emergency lending criteria defined | Fiscal discipline |
| III | Electronic Transactions Act (Cap. 442) | Minister can mandate electronic payments; proof required for asset transfers | Formalisation |
| IV | Excise Act (Cap. 147) | Annual 8% excise rate adjustment; non-resident online service providers taxed; used vehicle duties raised; gambling 5% excise; cosmetics 15% | High cost impact |
| V | Export Tax Act (Cap. 196) | New export taxes on paper scrap, bran/cake, quartz, feldspar | Agri-industrial |
| VI | Fair Competition Act (Cap. 285) | Fair Competition Tribunal funded at 0.5% of regulatory authority revenue | Regulatory |
| VII | Gaming Act (Cap. 41) | Gaming Board receives 10% of gambling excise duty proceeds | Gambling regulation |
| VIII | Imports Control Act (Cap. 276) | IDL exemption for EAC-origin goods; new IDL on notebooks, fishing nets, steel, aluminium windows, trailers | Trade & industry |
| IX | Income Tax Act (Cap. 332) | Presumptive tax threshold raised; 4.5% rate for TSh 11M–200M; new 1% crop/livestock/fish withholding; digital services tax → 3%; framework agreement tax benefits codified | Multi-sector |
| X | Investment & SEZ Act (Cap. 38) | Semi-trailer heads added to exemption negative list | Investment |
| XI | Land Act (Cap. 113) | 20% of land rent revenue redistributed: 10% to Ministry, 10% to LGAs | Land governance |
| XII | LGA Rating Act (Cap. 289) | Property rate collection returned to LGAs from TRA; rates collectible via electricity bills | Urban residents |
| XIII | Local Government Finance Act (Cap. 290) | 15% own-source revenue set-aside for youth/women/disability loans and market infrastructure; land rent share cut from 20% → 10% | Community benefit |
| XIV | Mining Act (Cap. 123) | Mineral Survey Fund established — 10% of mining revenues for exploration | Mining investment |
| XV | Motor Vehicle Registration Act (Cap. 124) | Motorcycle registration fee: TSh 95,000 → TSh 150,000 | Boda-boda operators |
| XVI | National Planning Commission Act (Cap. 127) | National projects must pass technical, financial, environmental, and economic evaluation before budget inclusion | Governance |
| XVII | Railways Act (Cap. 170) | Condoms exempt from Railway Levy; 70/25/5 revenue split introduced | Infrastructure |
| XVIII | Road & Fuel Tolls Act (Cap. 220) | Fuel toll revenue split: 70% Road Fund, 25% Consolidated Fund, 5% SEZ infrastructure; TARURA, Water Fund, NHIF, AIDS Fund all receive shares | Infrastructure |
| XIX | Road Traffic Act (Cap. 168) | Zanzibar-registered vehicles allowed on Mainland if differential taxes paid | Union matters |
| XX | Stamp Duty Act (Cap. 189) | Multiple duty increases; new 0.5% on agricultural land transfer; cheques TSh 700 | Financial transactions |
| XXI | Tax Administration Act (Cap. 438) | TIN registration within 15 days of employment; contractor disclosure made electronic; property tax removed from TRA mandate; perishable goods disposal empowered | Compliance |
| XXII | Tax Revenue Appeals Act (Cap. 408) | Alternative dispute resolution extended to 90 days + 30 day extension | Tax justice |
| XXIII | TRA Act (Cap. 399) | Export Tax Act and Imports Control Act now under TRA administration | Administration |
| XXIV | Universal Health Insurance Act (Cap. 161) | TSh 20/1,000 cigarettes and TSh 10/kg sugar allocated to NHIF Fund | Health financing |
| XXV | VAT Act (Cap. 148) | 15% withholding on goods supply; 12% on services; digital platforms taxed; VAT refund in 30 days or interest; dog food VAT exemption removed; new exemptions (EV chargers, aircraft, cotton garments, dairy packaging) | Multi-sector |
| XXVI | Vocational Education Act (Cap. 82) | Government institution SDL exemption scope clarified | Skills development |
| XXVII | Wildlife Conservation Act (Cap. 283) | Wildlife Management Area concession fee requirement removed | Conservation |
Face higher costs on bottled water, soft drinks, cosmetics, biscuits, and transport. The 8% blanket excise increase hits fast-moving consumer goods disproportionately. The linkage of property rates to electricity bills creates unavoidable exposure.
Registration fee jump from TSh 95,000 to TSh 150,000 (58% increase) is a direct operating cost shock for an estimated 2+ million registered motorcycle operators who form the backbone of last-mile transport.
Presumptive tax rate rises from 3.5% to 4.5% in the upper band. However, the raised threshold (TSh 100M → 200M) means more SMEs now qualify for the simplified regime — a mixed result that benefits new entrants but increases the rate for established SME taxpayers.
New 1% instalment tax on food crop purchases (paid by buying companies) and 1% withholding on livestock/fish payments may translate into lower effective farmgate prices. Combined with export taxes on bran and cake products, the agricultural cost environment becomes less favourable.
Deemed retained earnings rate halved to 15%. Framework Agreement tax benefits now legally codified — reducing regulatory risk for major mining investors. DSE-listed companies, banks, and insurers are explicitly excluded from the deemed distribution rule.
Aviation inputs (engines, tyres) now VAT-exempt. Electric vehicle charging stations exempted from VAT. Cotton garments made from domestic cotton exempt from VAT for one year. LPG gas smart meters exempt. These sectors see meaningful relief.
The Finance Act 2026 applies an 8% blanket increase to excise duties across most consumer goods categories — from water and soft drinks to beer, cement, fuel oils, cigarettes, and matches. This inflation-linked adjustment (projected inflation + 2%) will mechanically push consumer prices upward across product categories. Combined with new excise duties on motorcycles, small vehicles, gambling, and cosmetics — and the removal of some VAT exemptions — the net effect on daily household consumption costs is measurably positive for government revenue but represents a real cost increase for ordinary Tanzanians, particularly in urban areas and among users of the informal transport sector.