A three-day public hearing on the Finance Bill for 2024 began yesterday at Pius Msekwa Hall in the National Assembly. The bill, which was submitted to Parliament for its first hearing last Thursday, aims to introduce and adjust various taxes, duties, levies, and fees, and amend certain laws related to the collection and management of public revenues as outlined in the government's budget for the 2024/2025 financial year.
The government has proposed an 11.2 percent increase in overall spending, raising the budget to TZS 49.35 trillion from the current TZS 44.39 trillion. This increase will finance strategic energy, transport, and water infrastructure projects, as well as preparations for upcoming local government elections later this year and the general elections next year. Additionally, the funds will support Tanzania's preparations for hosting the Africa Cup of Nations (AFCON) tournament in 2027.
Domestic revenue is projected to be TZS 34.6 trillion, accounting for 70.1 percent of the budget. Of this, TZS 29.4 trillion will come from tax revenue and TZS 5.2 trillion from non-tax revenue.
To boost revenues, the government has proposed several measures, including additional import taxes. These include an increase in the Railway Development Levy to 2 percent and the introduction of a new 10 percent "Industrial Development Levy" on certain imports (excluding those from the East African Community), such as beer and energy drinks.
Other proposed changes include a 10 percent excise duty on betting stakes to help fund the National Health Insurance Fund, which will also receive 2 percent of excise collections from soft drinks, cosmetics, and alcohol. The government is also proposing a 10 percent duty on advertisement fees and extending excise duty to products like chili sauce, mango pickle, and tomato sauce.
Efforts to tax the digital economy are also on the table, with proposed taxes on digital content creation and digital asset transactions.
In addition to these tax measures, the government plans to introduce a zero-rate Value Added Tax (VAT) on gold supplied to the Bank of Tanzania (BoT) to incentivize gold supply, thereby increasing the country's foreign currency reserves and reducing the shortage of US dollars.
Legal amendments are also proposed to empower the National Food Reserve Agency (NFRA) to buy, stock, and reserve sugar as a national food reserve, ensuring its availability in the domestic market during shortages.
The government has proposed extending the fuel levy to Compressed Natural Gas (CNG) used in motor vehicles (TZS 382 per 1kg) and subjecting electric motor vehicles to registration and payment of registration fees. Amendments to the Export Levy Act are also proposed, introducing a 10 percent export levy on crude sunflower oil, sunflower cake, and sunflower seeds.
Starting next financial year, the Tourist Business License fee will be charged in local currency instead of US dollars, with the fee being payable for a period of 12 months from the last payment date. Furthermore, the government plans to reduce the Tanzanian Tourist Business License fee for mountain climbing agents from USD 2,000 (approximately TZS 5.2 million) to TZS 3 million per annum.The measures also aim to simplify the payment of tourism fees, reduce operational costs, attract investment in the tourism industry, and comply with the requirement of Section 26 of the law establishing the Central Bank of Tanzania, which mandates payments within the country to be made in local currency.
Additionally, the government is proposing a VAT exemption on the importation of Video Assistant Referee equipment and accessories.
These proposed measures are designed to enhance revenue collection, support strategic investments, and ensure economic stability and growth for Tanzania. The public hearing provides a platform for stakeholders to present their views and suggestions on the proposed bill.