Finance Act 2026 Reshapes VAT — Including Removing Imported Fishing Nets from the Exempt List

Summary

• Tanzania’s Finance Act 2026, assented on 20/30 June 2026 and effective 1 July 2026, amends the VAT Act (Cap. 148), and headlines report it excludes imported fishing nets from the list of VAT-exempt goods — effectively making them taxable on import. [elibrary.osg.go.tz], [eternal.co.tz]
• Broader VAT changes include expanding VAT on electronic services supplied via digital intermediaries, clarifying withholding VAT rates (3% goods / 6% services), and making the VAT deferment on imported capital goods permanent. [taxnews.ey.com], [eternal.co.tz]
• The Act also strengthens tax administration — new Commissioner-General powers to suspend or withhold VAT refunds, a framework-agreement mechanism for mining VAT exemptions, and tougher transfer-pricing penalties. [pwc.co.tz], [clydeco.com]

Article

Tanzania’s annual Finance Act 2026 — assented by President Samia Suluhu Hassan and effective from 1 July 2026 — introduces significant amendments across the tax code, including Part XXV amending the Value Added Tax Act (Cap. 148). Among the changes flagged in tax-news headlines is the exclusion of imported fishing nets from the list of VAT-exempt goods, removing a prior exemption and bringing such imports back into the VAT net. [elibrary.osg.go.tz], [eternal.co.tz]

The VAT amendments are wider than any single item. According to EY’s analysis, the Act expands the VAT treatment of electronic services supplied through digital intermediaries, clarifies withholding VAT rates at 3% for goods and 6% for services, and makes permanent the VAT deferment for imported capital goods — a measure repeatedly extended in prior years. It also imposes excise-registration, filing and payment obligations on non-resident providers of excisable electronic services and raises the digital-services income-tax rate for non-residents from 2% to 3%. [taxnews.ey.com]

On administration, PwC Tanzania notes new powers for the Commissioner General to suspend or withhold VAT refund payments, and a new legal mechanism (section 8A of the Tax Administration Act) allowing the Minister to recognise Framework Agreements for tax purposes by Gazette notice — under which mining investors must formally apply for VAT exemption; without a Gazette notice there is no legal basis for the relief. Clyde & Co and Eternal’s summaries highlight complementary measures: reducing deemed-distributed profits from 30% to 15%, strengthened transfer-pricing penalties (the greater of 30% of the adjustment or 100% of the shortfall), mandatory 30-day electronic disclosure of construction/extractive contracts, and a higher presumptive-tax threshold (TZS 100m → 200m). [pwc.co.tz], [clydeco.com], [eternal.co.tz]

Sources:

• EY – Tanzanian Finance Act, 2026 analysis [taxnews.ey.com]
• Clyde & Co – Tanzania Tax Update: Finance Act 2026 Highlights [clydeco.com]
• The Finance Act, 2026 – Government of Tanzania (official text) [elibrary.osg.go.tz]