S R AUDITORS

Tanzania Budget 2017/18

Yesterday, Tanzania’s Minister for Finance & Planning, Hon. Dr. Philip Mpango, tabled at the Parliament of Tanzania, the estimates of government revenue and expenditure (national budget for Tanzania) for the fiscal year 2017/18.

Bajeti Ya Serikali, Tanzania 2017/18

Tanzania’s Budget for 2017/18 in the budget briefcase of the Minister of Finance and Planning

The Hon. Minister informed the Parliament that the Budget had taken on board the recommendations from various stakeholders, including business community and Development Partners. This was evident from some changes such as the abolition of the Annual Motor Vehicle Licence Fee in favor of an increase in excise duty on Petrol, Diesel & Kerosene.

He also spoke on issues that have dominated public debate such as liquidity squeeze, business shutdown and diminishing private sector confidence.

For example he says:

I would like to reassure the business community that the Fifth Phase Government strongly believes that the private sector is an engine of the economy and highly values the contribution of the business community in economic development and the nation welfare in general. It is vivid that the great portion of goods and services for domestic use and exports which earn the country the foreign exchange are produced by the private sector. Similarly, private sector is the main employer and source of government revenue. Therefore, private sector is a great partner of the government in an effort of bringing national development.

Below are some of the changes and elements of the proposed budget of Tanzania for 2017/18:

  • Launch and use of Electronic Revenue Collection System (e-RCS) which will ensure proper assessment of taxes and provide assurance to the taxpayers on the amount of taxes they are supposed to pay.
  • Issuing identity cards to informal small businesses to capture them in the tax net
  • Opening of an Escrow account to ease the refund to sugar importers (for industrial use) of additional import duty of (15% of FOB value) paid.
  • New tax of minerals: Clearing fee of 1%. All mineral exports to be processed at clearing houses (to be established by the government at various places) to verify the minerals and issue export permits.
  • Zero-rate VAT on ancillary transport services on goods in transit when they are in Tanzania. This appears to be in response to the points raised by Transporters of the increase in costs due to VAT resulting in importers preferring ports of neighboring countries over ours.
  • Increase of the qualifying amount of non-commercial motor vehicles from TZS 15 million to TZS 30 million.
  • Corporate Tax reduced from 30% to 10% for new assemblers of vehicles, tractors and fishing boats. This will apply for the first 5 years of operation.
  • Introduction of final Withholding Tax of 5% of the total market value of minerals to all small miners.
  • Abolishing of  Annual Motor Vehicle Licence Fee and increase Excise Duty on Petrol (Motor Spirit and Premium), Diesel (Gas Oil) and Kerosene (IK) by shillings 40 per litre from shillings 339 to shillings 379 per litre of petrol, from shillings 215 to shillings 255 per litre of Diesel and from shillings 425 to shillings 465 per litre of Kerosene. This is to address the complaint of imposing fee even if the vehicle is out of use.
  • Increase of Motor Vehicle Licence Fee on first registration by TZS 50,000 on all cc brackets.

Click here to download the budget speech given by Tanzania’s Minister of Finance and Planning, Dr. Philip Mpango on 8 June 2017 at Tanzania’s Parliament.

For professional tax advice and to understand what the new budget means for your business, connect with us.

DISCLAIMER

As always, anything on this site should not be relied upon in place of appropriate professional advice. Laws may change from time to time.

 

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