Tanzania Budget Speech for 2019/2020

The 2019/2020 Budget speech was delivered on 13 June 2019 by the Minister for Finance and Planning, Hon Dr Philip Mpango.

The budget focuses on the National Five Years Development Plan 2016/17-2020/21 to build an industrial economy and improve the citizens’ welfare.

Highlights:

  • Tanzania’s GDP in quarter 3 2018 grew by 6.8%, compared to 5% during the same period in 2017.
  • The economic activities that showed the fastest growth were health (13.2%), transportation and cargo storage (12.4%), water (10.7%), construction (7.4%), information and communication (7.3%), manufacturing (7.3%), and business and maintenance (7.3%).
  • The inflation rate is stable. Inflation fell from an average of 4% in January 2018 to reach 3.4% in June 2018 and continued to decline further to 3%.
  • Budget deficit is estimated at 2.3% of GDP in 2019/20 from the likely outturn of 2% of 2018/19.
  • Tax revenue is estimated at 13.1% of GDP in 2019/20 from the likely outturn 12.1% in 2018/19.
  • The Tanzanian government intends to increase and strengthen domestic resource mobilisation aiming at financing government operations, including infrastructure projects and social services.
  • To attain the estimated domestic revenue targets, the government has prepared specific administrative strategies that will be implemented in the medium term.

Proposed income tax measures

  • Amend the Income Tax Act to increase the minimum amount of turnover required for taxpayers to start filling the accounts to Tanzania Revenue Authority from twenty million shillings (20,000,000) to one hundred million shillings (100,000,000).
  • Amend the First Schedule of the Income Tax Act to introduce a presumptive tax regime to taxpayers with an annual turnover from four million shillings (4,000,000) and one hundred million shillings (100,000,000), who will not be obliged to submit financial accounts to the Tanzania Revenue Authority for determining income tax. The objective of this measure is to reduce the tax compliance burden on small businesses and align the tax rates with the minimum amount of turnover required for businesses to use the electronic fiscal device (EFD) machine, where the current amount is fourteen million shillings (14,000,000).
  • Amend Section 70(2) of the Tax Administration Act, CAP 438 to extend the period given for 100% tax amnesty on interest and penalties, for six months up to December 2019. The extension is granted to taxpayers who had already applied for amnesty. This measure follows the positive response from taxpayers after the tax amnesty was announced in July 2018.
  • No changes to personal income tax rates were proposed.

 

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