Tanzania Proposes VAT Expansion for Digital Economy in 2025–2026 Budget Speech

• Tanzania’s Ministry of Finance proposed amendments to the VAT Act to enhance collection and expand the tax base in the digital economy.
• Key measures include expanding the definition of online intermediation services to include online marketplace and network marketing platforms.
• Aim is to address gaps in the current VAT framework and improve tax collection from digital transactions.
• Non-resident online payment service providers using local infrastructure will be classified as financial intermediaries to ensure VAT applies to cross-border digital payment services.
• A reduced VAT rate of 16 percent will apply to certain online B2C transactions if payment is made digitally and the invoice confirms the transaction amount.
• Objectives include encouraging electronic payments, discouraging cash transactions, and improving digital traceability for tax purposes.
• Changes aim to modernize Tanzania’s tax system, align with global VAT trends, and promote financial transparency.
• Formal legislative amendments and implementation guidelines are expected following the Budget Speech.
• Digital platforms and payment service providers should prepare for upcoming registration, reporting, and invoicing obligations.

Source: fintua.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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