On 26 June 2025, Tanzania’s Ministry of Finance amended the 2025/26 draft budget after the private sector raised concerns, extending the withholding tax period on retained earnings, expanding VAT exemptions, reducing levies, and postponing some tax measures to January 2026. The revised bills will now proceed to final parliamentary approval before coming into effect on 1 July 2025.
The changes follow feedback from the Tanzania Private Sector Federation (TPSF) and the Confederation of Tanzania Industries (CTI), and other stakeholders who expressed concerns about the impact of the 10% WHT on retained earnings and the timeline for distribution, as well as the effect of new levies and increased costs on business expansion, reinvestment, and competitiveness
This adjustment aims to support businesses in reinvesting profits and to provide a more accommodating environment for growth. Other changes in the revised bill include reducing the local government hotel levy from 10% to 2% and capping the service levy at 0.25%. The industrial development levy (IDL) on clinker imports has been removed, and the proposed carbon levy of TZS 22,000 per ton on coal and natural gas has been withdrawn.
Read more at: https://www.tanzaniainvest.com/economy/draft-budget-2025-2026-wht-amendments
