TRA to cut VAT for digital purchases to 16pc
MOROGORO: THE Tanzania Revenue Authority (TRA) has announced plans to reduce the Value Added Tax (VAT) rate from 18 to 16 per cent for businesses that make purchases through digital platforms, starting September 1st this year, if implementation proceeds as planned.
TRA Commissioner General Yusuph Mwenda made the announcement recently while launching a Special Entrepreneurship Empowerment Desk at Chief Kingalu Central Market in Morogoro Municipality.
The desk will offer services to citizens across all TRA tax zones in Tanzania.
Mr Mwenda said the VAT reduction is in line with directives from President Samia Suluhu Hassan, and is expected to stimulate business activity by lowering product prices and increasing consumer purchasing power.
“This is a major step forward,” said Mwenda. “A VAT drop from 18 to 16 per cent will make goods more affordable, which means people can buy more and businesses will sell more.”
He added that ordinary citizens will benefit directly, as the reduction will apply to all VAT-inclusive goods purchased digitally.
“Let’s applaud President Samia for championing such transformative reforms,” he said.
The Commissioner General said that TRA is committed to creating a business-friendly environment and will prioritise education, consultation and partnership over enforcement.
“Our role is not just to collect taxes, but also to support businesses. We believe in educating and engaging traders, this new desk reflects that vision,” he said.
He clarified that the Special Desk is not a tax enforcement platform but a support mechanism designed to identify and understand businesses, listen to their challenges and help them grow, including by improving their access to financing.
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The desks were operational yesterday in all tax regions across mainland Tanzania and Zanzibar.
“We’re setting up 200 desks nationwide. Each tax region, district and TRA office will have one. We’ll also proactively engage traders where they are to listen and solve issues,” he added.
Chairperson of the Morogoro Regional Chamber of Commerce, Industry and Agriculture (TCCIA), Muadhini Mnyanza welcomed the initiative, noting that while the number of active taxpayers remains low, the launch of the desk brings services closer to businesses and should be accompanied by widespread public education.
Chairperson of the Tanzania Business Community (JWT) in Morogoro Region, Mr Ally Mamba echoed the sentiment, assuring that local traders stand with TRA in promoting tax compliance.
“We’re working closely with TRA Minor challenges do arise, but we resolve them cooperatively and without conflict,” he said.
