S R AUDITORS

VAT Act 2014 – Whats exempt? Whats not?

The VAT Act, 2014 is effective from 1 July 2015.

Tanzanias new VAT Act

Due to lack of public awareness and education, we receive several queries daily from tax payers about what’s exempt and what’s not.

We have listed what’s exempt below.

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.

For professional tax advice, contact us.

Supplies and imports exempt from value added tax
Part I
Each of the following is an exempt supply for the purposes of this Act.
  1. Agriculture implements
  2. Agriculture inputs
  3. Livestock basic agricultural products and food for human consumption
  4. Fisheries implements
  5. Bee-keeping implements
  6. Dairy equipment
  7. Medicine or pharmaceutical products, not including food supplement s or vitamins
  8. Articles designed for people with special needs
  9. Education materials
  10. Health care
  11. Immovable property
  12. Educational services
  13. Intermediary services
  14. Government entity or institution
  15. The supply of petroleum products
  16. Supply of water except, bottled or canned water or similarly presented water
  17. The transportation of person, by any means of conveyance other than air charters, taxi cabs, rental cars, boats or boat charters
  18. Supplies of arms and ammunition, parts and accessories thereof, to the armed forces
  19. Funeral services, for the purpose of this item funeral services includes:- coffin, shroud, transportation, mortuary and disposal services of human remains
  20. Gaming supply
  21. Supply of tourist guiding, game driving, water safaris, animal or bird watching, park fees, and ground transport services
  22. Supply of solar panels, modules, solar charger controllers, solar inverter, solar lights, vacuum tube solar collectors and solar battery
  23. Supply of air charter services
Part II
Imports exempt from value added tax
  1. An import of baggage or personal effects exempt from customs duties under the Fifth Schedule of the East African Customs Management Act, 2004.
  2. An import of goods given, otherwise than for the purposes of sale, as an unconditional gift to the State
  3. An import of goods (including containers), if the goods have been exported and then returned to Tanzania by any person without being subjected to any process of manufacture or adaptation and without a permanent change of ownership, but not if at the time when the goods were exported, they were the subject of a supply that was zero-rated under this Act or under repealed Value Added Tax Act, Cap. 148.
  4. An import of goods shipped or conveyed to United Republic for transhipment or conveyance to any other country.
  5. An import of goods made available free of charge by a foreign government or an international institution with a view to assisting the economic development United Republic.
  6. An import of food, clothing and shoes donated to an approved non-profit organisation for free distribution to orphanage or special schools for children with special needs in Mainland Tanzania.
  7. Import of goods by non-profit organisation for the provision of emergency and disaster relief and where such goods are capital goods, the goods shall be handled to the National Disaster Committee upon overtion, completion or diminishing of the disaster.
  8. An import of goods by the religious organisation for the provision of health, education, water religions services in circumstances that, if the services are supplied-
    1.  without fee, charge or any other consideration be it in a form of fees; or
    2. on payment of any consideration, the fees or charges does not exceed fifty percent of the market value.
  9. An import of goods that is exempt under an agreement entered into between the Government of the United Republic and another government or an international agency.
  10. An import of goods by a registered and licensed explorer or prospector for the exclusive use in oil or gas exploration or prospection activities, to the extent those goods are eligible for relief from customs duties under the East African Customs Management Act, 2004.
  11. An import of aircraft, aircraft engine or parts by a local operator of air transportation
  12. An import of railway locomotive, wagons, tramways and their parts and accessories by a registered railways company, corporation or authority.
  13. An import of fire fighting vehicles by the Government
  14. An import of laboratory equipment and reagents by education institution registered by the Ministry Responsible for education to be used solely for educational purpose
  15. An import of CNG plants equipments, natural gas pipes, transportation and distribution pipes, CNG storage cascades, CNG special transportation vehicles, natural gas metering equipments, CNG refueling of filling, gas receiving units, flare gas system, condensate tanks and leading facility, system piping and pipe rack, condensate stabilizer by a natural gas distributor
  16. Firefighting equipment

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