Tanzania: Changes to tax exemptions included in budget proposals

Tanzania: Changes to tax exemptions in budget proposals

The 2016 budget, presented 9 June 2016, includes a proposal to repeal the tax exemptions on dividends from shares held by a resident person or shares held by a non-resident whose controlling interest in the dividend paying company is less than 25%. Also, the 5% withholding tax rate on dividends would be increased to 10%.

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Other tax proposals in the 2016 budget would:

  • Reduce the lowest tax rate for individuals to 9% (down from 11%)
  • Repeal a tax exemption on the final gratuity paid to Members of Parliament
  • Impose withholding tax on investment income payments made to approved retirement funds
  • Provide new rules for determining the withholding tax to be imposed on rental income
  • Revise the value added tax (VAT) with respect to certain health-related products or goods
  • Provide an exemption from VAT for aviation insurance charges


Read a June 2016 report [PDF 2.2 MB] prepared by the KPMG member firm in Tanzania: Budget Brief

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