BUDGETARY COMMENTARY FINAL

In 13 th day of June, 2019 the Minister for Finance and Planning Hon. Dr Philip I. Mpango (MP)
presented to the United Republic of Tanzania National Assembly the budget proposed for
discussion/debate and approvals.
The following are some of the key/major reforms proposed by the said Minister;

Agriculture and Industry
 Newly introduced excise tax on locally produced Human Hair and materials used for
making wigs of 10% per Kilogram against 25% on imported.
 Reduced excise on wines produced from locally produced fruits from TZS 200 per litre to
TZS 61 per litter
 Reduced corporate tax of 25% for the first two years starting 1 st July 2019 and ending
30 th June 2019 for newly established local producers of sanitary pads with performance
agreements with the Government
 Zero rated VAT on refrigeration containers to be used in horticulture
 Zero rated VAT on grain drying equipment
 Input VAT can be claimed in Agricultural exports
 Protection against counterfeit – includes imitation and naming
 A 10% excise duty introduced on plastic tubes, hoses, pipes and fittings

Business activities
 Requirement to file audited accounts raised from TZS 20 million to TZS 100 million
turnover up.
 Presumptive taxpayer’s annual turnover raised to TZS 100 million.
 Regulation of quality and safety of food and cosmetics consolidated by removing the
function from the Tanzania Food and Drugs Regulatory Authority into the Tanzania
Bureau of Standards.
 Newly registered TIN for business or investment purposes are relieved of the
requirement to immediately lodge a statement of estimated tax payable and paying
instalment tax for the first six months

Power sector
 Removed VAT for the supply of electricity to a supplier of electricity services in Tanzania
Zanzibar by a supplier from Mainland Tanzania is zero rated.

Transportation sector
 Importation of aircraft lubricants by a local operator designated airline under a bilateral
air services agreement between the Government of Tanzania and a foreign government
are exempted to pay excise duty.
 VAT removed on imports of aircraft, aircraft parts, engine lubricants by Local operators
of air transport
 VAT removed on aircraft lubricants, tickets, brochures, leaflet, calendar etc printed or
engraved with airline logo by a designated airline under a bilateral air services
agreement between the Government of Tanzania and a foreign government.
 Validity of driving licence increased to five years

VAT refunds
 A tax invoice generated by an electronic fiscal device which does not include the name,
address and TIN and VAT registration of a customer though valid cannot be used to
support an input tax credit plan or any refund claims.

Tax dispute resolution
Two new forums to be established
 Office of Tax ombudsman to be established under the Ministry of finance
 Complaints desk in connections to valuations and categorization of imports

Driving Licence
 Driving licence will now be issued in a period term of 5 years as opposed to 3years
 Driving licence fee has now increased from Tanzanian Shillings 40,000 to 70,000

The proposed budget has clearly indicated the intention of the government to support
the industrial economy. It is our hope that, the reforms of the same will be implemented
in our laws as soon as practicable.