Tanzania VAT Guide 2026

Overview — VAT Regime

VAT in Tanzania is governed by the Value Added Tax Act, Cap. 148. VAT is administered by the Tanzania Revenue Authority (TRA). Any person making taxable supplies (goods or services) with an annual turnover exceeding TZS 200 million must register for VAT. Registration is voluntary for businesses below this threshold. VAT-registered businesses charge 18% VAT on their supplies (output VAT) and can recover VAT paid on business purchases (input VAT). The net difference is remitted to TRA monthly.

VAT Rates

• Standard rate (18%) — applies to most goods and services supplied in Tanzania
• Zero rate (0%) — applies to exports of goods and services, international transport, supplies to EPZ/SEZ operators, and certain basic food staples
• Exempt supplies — financial services (insurance, banking), education, health services, residential rent, and certain agricultural inputs

Exempt supplies differ from zero-rated supplies in that input VAT on exempt supplies cannot be recovered. Businesses making only exempt supplies cannot register for VAT and cannot recover input VAT.

Registration Threshold and Process

The mandatory VAT registration threshold is TZS 200 million in annual taxable turnover. Businesses crossing this threshold must register within 30 days. The registration process is completed through the TRA online portal and requires:

• Certificate of incorporation or business registration
• Taxpayer Identification Number (TIN) certificate
• Business premises verification by TRA
• EFD procurement and registration

EFD — Electronic Fiscal Devices

All VAT-registered businesses in Tanzania are required to use Electronic Fiscal Devices (EFDs) for issuing invoices to customers. EFDs are tamper-proof electronic machines that record all sales transactions and transmit data directly to TRA in real time. Key requirements include:

• EFDs must be procured from TRA-approved suppliers
• All invoices must be issued through the EFD and contain a unique control number
• EFD data is automatically uploaded to TRA servers
• Failure to use an EFD or issuing manual invoices without authorisation attracts penalties
• EFD maintenance and annual inspection are mandatory

VAT Returns and Payment

VAT returns must be filed monthly by the 30th day of the following month (e.g., the January return is due by 28 February). Returns are filed electronically through the TRA online portal. VAT due must be paid by the same deadline. Late filing attracts a penalty of TZS 100,000 plus 1% interest per month on the unpaid VAT. Refunds of excess input VAT are processed within 90 days of a valid claim, subject to TRA audit verification.

FAQs

Can I voluntarily register for VAT if my turnover is below TZS 200M?

Yes, voluntary registration is permitted and can be beneficial if your customers are VAT-registered and need VAT invoices to recover input tax.

What is the penalty for not issuing an EFD receipt?

Penalties range from TZS 500,000 to TZS 3,000,000 per offence, plus suspension or cancellation of VAT registration.

Are digital services subject to VAT?

Yes, non-resident digital service providers supplying services to Tanzanian customers must register for VAT and charge 18%. TRA has implemented a simplified registration process for non-resident digital suppliers.

Can input VAT on motor vehicles be claimed?

Input VAT on motor vehicles is generally not recoverable unless the vehicle is used exclusively for business purposes (e.g., rental cars, driving school vehicles). Strict documentation requirements apply.

Disclaimer

This guide provides general information about Tanzanian VAT for the 2026 tax year. Tax laws, rates, and regulations may change. Always consult with a qualified Tanzanian tax advisor or the Tanzania Revenue Authority for advice specific to your situation. InvestmentKit does not provide tax advice.