Parliament opens finance bill hearings as Sh1.72tr tax shake-up goes to public test

DAR ES SALAAM: THE Parliamentary Standing Committee on Budget will on Saturday begin statutory public hearings on the Finance Bill 2026, marking the start of formal parliamentary scrutiny of sweeping tax reforms expected to reshape revenue collection across agriculture, digital services and other key sectors.

The two day hearings will be held at Msekwa Hall in Dodoma starting at 10:00 am, under procedures set out in Rule 100(2) of the Standing Rules of Parliament 2025, which requires public participation before key finance legislation proceeds to the next stage in Parliament.

According to the Parliamentary Communication and Public Awareness Department, the process invites stakeholders from government, private sector and civil society to submit views on the Finance Bill 2026, which remains under review ahead of its presentation for further legislative action.

Members of the public who are unable to attend the hearings have been encouraged to submit written contributions through official parliamentary communication channels. The Bill is expected to significantly influence taxation policy, compliance systems, and revenue mobilisation once enacted.

If approved and assented to, the Finance Bill 2026 will take effect on July 1, 2026 and is projected to raise about Sh1.72 trillion in additional revenue while expanding the tax base into agriculture, gambling, digital services and other emerging sectors.

At the centre of the proposals is a one per cent withholding tax on agricultural transactions involving crops, livestock, fish, and unprocessed dairy products. Corporate buyers will deduct the tax at source, with producers allowed to offset it against annual tax liabilities. The government says the measure is aimed at formalising the agricultural sector, though it has raised concern among some stakeholders over potential cost pressures on small-scale producers.

The Bill introduces a five per cent excise duty on gambling activities, including sports betting, casinos, slot machines, and online platforms, as part of efforts to widen taxation in the fast growing gaming industry.

In the transport sector, excise duties on imported used vehicles will increase significantly. Vehicles aged eight to ten years will attract a 20 per cent duty, those between ten and twenty years will face 40 per cent, while vehicles older than twenty years will be taxed at 50 per cent. The government says the move is intended to reduce environmental pollution and discourage the importation of ageing vehicles.

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A broader excise revision will increase rates by eight percent across 23 tariff lines, affecting products such as confectionery, beverages, cement, lubricants and selected beauty products, whose duty will rise from 10 percent to 15 percent.

The Bill further extends tax regulation into the digital economy by requiring non resident online service providers to register locally, file returns and remit taxes on services supplied to Tanzanian consumers, even without physical presence in the country.

In addition, the Minister for Finance will be empowered to prescribe payments that must be made electronically. Proof of electronic payment will become mandatory for transactions involving land, buildings, and motor vehicles as part of efforts to strengthen tax compliance and reduce cash based transactions.

Income tax amendments include a reduction in the deemed retained earnings threshold from 30 per cent to 15 per cent and an increase in the presumptive tax turnover ceiling from Sh100 million to Sh200 million. Tax rates within that bracket will rise from 3.5 per cent to 4.5 per cent, while new entrants will benefit from a one year tax holiday.

The public hearings are expected to inform further parliamentary debate as Finance Bill 2026 moves through its legislative stages ahead of its planned implementation in July next year.