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Tanzania: standard rate: 18%
VAT Calculator calculates the VAT amount as well as the price with and without VAT. The VAT % is pre-filled, but you can change it or clear the value. The results are rounded to your desired precision. You can also make a currency conversion.
You can also choose the VAT% by clicking the percentages in the tables below.
Tanzania | |
| standard rate | 18% Most taxable goods and services supplied in or imported into Mainland Tanzania unless they qualify for zero-rating or an exemption. From 1 July 2026, air charter services are also subject to the standard rate following the expiry of their VAT exemption. |
| zero rate | 0% Exports of goods and qualifying services that are supplied for effective use or enjoyment outside Tanzania. International transport and specified supplies directly connected with international transport also qualify. Other zero-rated supplies include qualifying goods sold by licensed duty-free vendors to departing tourists, gold supplied to the Bank of Tanzania or a licensed refinery in Mainland Tanzania, and locally manufactured fertiliser through 30 June 2028. Input VAT attributable to zero-rated supplies is generally recoverable. |
| exempt without deduction | VAT exemptions include many agricultural inputs and basic agricultural products, specified foodstuffs, medicines and healthcare, approved education and educational materials, water other than bottled or similarly packaged water, specified passenger transport, vacant land and qualifying residential premises, certain insurance services, specified petroleum products, solar equipment, funeral services and various sector-specific imports and supplies. From 1 July 2026 to 30 June 2027, locally manufactured garments made from locally grown cotton are exempt rather than zero-rated. Input VAT attributable to exempt supplies is generally not recoverable. |
| out of scope | Services supplied by an employee to an employer are outside the scope of an economic activity for VAT purposes. Services performed as a company director are also outside the scope unless the office is accepted in the course of the director's own economic activity. Where a taxable person transfers a qualifying business or independently operable part of a business as a going concern to another taxable person, the transaction is treated as a single transaction and as if it were not a supply for VAT purposes. |
| reverse charge | A VAT-registered business receiving taxable imported services generally accounts for VAT under the reverse-charge mechanism. The practical VAT cost is particularly relevant where the recipient also makes exempt supplies and therefore cannot fully recover input VAT. Non-resident suppliers of B2C electronic services are instead subject to separate registration and collection rules; they generally account for Tanzanian VAT themselves rather than using the customer's reverse charge. |
| withholding VAT | Since 1 July 2025, specified withholding agents must withhold part of the VAT when paying for standard-rated supplies. For goods, 3 percentage points of the 18% VAT are withheld and the supplier receives the remaining 15 percentage points. For services, 6 percentage points are withheld and the supplier receives the remaining 12 percentage points. Where a transaction contains both goods and services, the taxable value is apportioned in the ratio 3:2. From 1 July 2026, the withholding agent must pay and file the withheld VAT by the tenth day after the end of the tax period and issue the supplier with a VAT Withholding Certificate. These are withholding amounts, not separate VAT rates. |
The standard VAT rate in Mainland Tanzania is 18%. A 16% rate has been legislated for certain purchases by customers who are not VAT-registered, where payment is made through a bank or an approved electronic payment system. However, its application remains subject to a separate implementation notice, according to information checked in September 2026. Zanzibar, which is part of Tanzania, has its own VAT rates.
| Upcoming changes: | |
| 1 Jul 2027 | Under current legislation, the temporary VAT exemption for locally manufactured garments made from locally grown cotton expires after 30 June 2027. Clyde & Co – Finance Act 2026 |
| 1 Jul 2028 | Under current legislation, the temporary zero rating of locally manufactured fertiliser expires after 30 June 2028. EY – Tanzanian Finance Act 2025 |
| Past changes: | |
| 1 Jul 2026 | Online marketplaces and other qualifying digital intermediaries become deemed suppliers for VAT purposes when facilitating electronic services to unregistered customers in Mainland Tanzania. New VAT exemptions include qualifying electric-vehicle charging stations and LPG smart meters, while the exemption for air charter services expires and those services become subject to the standard 18% rate. Office of the Attorney General – Finance Act 2026 |
| 1 Jul 2026 | Locally manufactured garments made from locally grown cotton cease to be zero-rated and instead become VAT-exempt through 30 June 2027. The change removes the normal input VAT recovery associated with zero-rated sales. Clyde & Co – Finance Act 2026 |
| 1 Jul 2025 | The zero rate on locally manufactured fertiliser is extended through 30 June 2028. The zero rate on locally manufactured garments made from locally grown cotton is extended through 30 June 2026. EY – Tanzanian Finance Act 2025 |
| 1 Jul 2025 | A VAT withholding system is introduced for specified withholding agents: 3 percentage points of VAT are withheld on goods and 6 percentage points on services. The Finance Act also provides for a reduced 16% rate on specified B2C supplies paid through banks or approved electronic payment systems, but implementation requires a notice from the Commissioner General and the rate remains on hold as of September 2026. Ministry of Finance – Finance Act 2025 |
| 1 Jul 2024 | Supplies of gold to the Bank of Tanzania and to licensed refineries in Mainland Tanzania become zero-rated. Several new sector-specific VAT exemptions are also introduced. EY – Tanzanian Finance Act 2024 |
| 1 Jul 2023 | The general annual VAT registration threshold increases from TZS 100 million to TZS 200 million. Ministry of Finance – Budget Insights 2023/24 |
Note! The VAT information on this page is general information, not tax advice. The information is not exhaustive. VAT rules include many exceptions and special cases. Check the treatment of your situation in the tax administration's guidelines. The information was checked on 22 Sep 2026.
Tanzania, Zanzibar | ||
| higher rate | 18% | |
| standard rate | 15% | |
VAT rounding: the EU, the UK and other European countries
The EU VAT Directive and the Court of Justice of the European Union leave VAT rounding rules to be decided at national level. National rules vary. In the UK, HMRC allows VAT on B2B invoices to be rounded down to the nearest whole penny.
Roundings in VAT calculation: Mathematically impossible prices?
There are a whole range of VAT-inclusive prices that cannot be mathematically arrived at if the tax is calculated from the VAT-free price. One example is 3.99. These prices are also possible, but then the VAT-free price must be interpreted as rounded.
VAT Gap - How much VAT is left uncollected in EU countries?
9.5% of VAT was left uncollected in EU countries. See the list of EU countries and candidate countries.
In Europe there is VAT - in the US sales tax
In Europe, companies belonging to the production chain account for the VAT paid by the consumer to the state in proportion to their value added. The US sales tax, on the other hand, is billed entirely by the company that made the consumer sale. Sales tax is paid to local operators, not to the state.
Many of today's taxes were already in use in Antiquity. Deciding on taxation has moved from autocrats to parliaments and the level of taxation has risen. In earlier times taxes were used to wage wars, today taxes are used to maintain welfare states.
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