UNITED REPUBLIC OF TANZANIA - BUDGET HIGHLIGHT 2013/2014
The consolidated Government Budget speech for the fiscal year 2013/2014 read on 13 June
2013 by Minister of Planning and Finance Dr William Mgimwa (MP), propose some changes
and amendments to some provisions of various tax laws. The amendments will be implemented
with effect from 1st July, 2013 except where mentioned otherwise in the summary below.
No.
TAX LAW/TAX SOURCE
CHANGES PROPOSED BY 2013/2014 BUDGET
SPEECH
VAT ACT 2004
1
Abolish exemption granted Tax exempted by second schedule of the VAT Act 2004
on tourist services
including the following: Tourist Guiding, Game driving,
Water Safaris, Animal or bed watching, Park fees, Tourist
Charter Services and Ground Transport.
2
VAT
exemption
on For manufacturers who use local produced cotton can
garments
manufacturers claim input VAT on purchases such as electricity, spare
under Third Schedule
parts etc. used in production
INCOME TAX ACT 2004
3
Pay As You Earn (PAYE)
Lower paye rate reduced from 14% to 13%
4
Withholding tax on mobile Introduced 10% Withholding tax on commission
phone’s
commission
on received on transfer of money by mobile phones
money transfer
5
Withholding
tax
Consultancy services
other services
on Withholding tax of 5% on consultancy and other
and services introduced disregard whether they have TIN
or not.
6
Withholding
tax
government purchases
on Withholding tax of 2% on goods purchased by
Government from all suppliers disregard whether they
have TIN or not.
7
Abolish
withholding
tax Withholding tax to be paid on aircraft charter hired by
exception on aircraft charter non-residents
for non-resident
No.
TAX LAW/TAX SOURCE
EXCISE ACT
8
Non-Utility Motor Vehicles
CHANGES PROPOSED BY 2013/2014 BUDGET
SPEECH
Excise duty on Non-Utility Motor Vehicles aged more
than 10 years increased from 20% to 25%
9
New duty on Utility Motor Introduced new Excise duty of 5% on Utility Motor
Vehicles
Vehicles aged more than 10 years (HS Code 87.01,
87.02 and 87.04)
10
Import duty on petroleum
products increased
Excise duty of 10% to 25%
on
various
locally
manufactured or imported
goods
Imported furniture
Excise duty on mobile
phone services
11
12
13
14
15
Diesel TZs 215 per liter to TZs 217; Petrol TZs 339 per
liter to TZs 400 per liter
Carpets, body lotions & creams, leather hand bags,
leisure boats, gun, aircraft and helicopter
Excise duty of 15% on imported furniture
Duty of 14.5% to be charged on airtime
Excise
duty
on
non- Soda, locally produced juices, imported juices, beers,
petroleum
products wines, brands etc
increased up to 10%
Excise duty on cigarette Excise duty increased
products
FUEL LEVY
16
Fuel levy increased
Increased from TZs 200 per liter to TZs 263 per liter
THE VOCATIONAL EDUCATION AND TRAINING ACT
17
SDL Rate reduced
Proposed to reduce SDL rate from 6% to 5%
Government Agencies to Government Agencies which do not rely much on
pay SDL
government budget subvention to pay SDL
MOTOR VEHICLES ANNUAL FEES
18
Annual
motor
vehicles 501cc to 1550 cc – TZs 150,000
increased by TZs 50,000 for 1550 cc to 2500 cc – TZs 200,000
each group
Above 2500 cc – TZs 2500,000
Below 501 Cc – Tzs
PETROLEUM ACT
19
Petroleum levy
INVESTMENT ACT
20
Import duty on
capital goods
New petroleum levy of TZs 50 per liter introduced for
financing rural electrification
deemed Reduced exemption on duty on deemed capital goods
increase from 90% to 75%. Also some goods have been
removed from list of capital goods, these include office
furniture and equipments, office consumables, petroleum
products, non-utility vehicles, fans. Refrigerators,
electrical goods kitchen utensils etc.
No.
TAX LAW/TAX SOURCE
CHANGES PROPOSED BY 2013/2014 BUDGET
SPEECH
EAST AFRICA COMMON TARRIFS
21
EAC-Common
External
Tariff “CET”
and EACCustoms Management Act,
2004
-
-
Reduction in import duty on imported wheat for
food production (HS Code 1001.99.20 and HS
Code 1001.99.90) from 35% to 10%.
Reduction of import duty from 100% to 25% for sugar
and from 75% to 25% for rice
Exempt import duty on railway machinery and spare
parts
Abolish the practice of not checking insider containers
(Compliant Trader Scheme)
Strengthening of valuation of imported goods
Duty remission on soap raw materials (HS Code
3402.11.00; HS Code 3402.12.00 and HS Code
3402.19.00)
Duty remission on plastic bag biogas digesters
Impose duty of 25% on crash stones
Duty exemption on Water treatment effluent plant
(from 10% to 0%)
Continue granting duty exemption to military canteens
OTHER PROPOSED CHANGES AIMING TO BOOST TAX COLLECTIONS
22
Propose amendment of To enable unsolicited PPP Proposals participate in
Public Procurement Act, economic projects without subjected to competitive
2011 and Public Private tendering
Partnership Act 2010
23
Propose amendment to Government Agencies and Institution to remit to
Public Finance Act Cap Government 10% of their gross revenue instead of tax on
248, Treasury Registrar Act surplus (profit)
Cap
418,
Government
Agency Act Cap 245,
Note that final changes will be communicated to the Public through Public Finance Act
2013 after proposed changes have been endorsed by the members of Parliament and
changes to various legislations passed in respect of these amendments.
For more assistance on implementation of various tax laws, contact us
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Email: vabusiness@habari.co.tz