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Output tax is calculated on the taxable value of the supply.

Exemptions and zero rating

Exempt supplies

Supplies that are exempt from VAT and in respect of which the supplier cannot make a deduction of input tax, include (but are not limited to):

  • health supplies;

  • water;

  • educational supplies;

  • books and newspapers;

  • passenger transport, excluding air charter, taxi cabs, rental cars, boats and boat charters;

  • land and certain residential housing;

  • finance and insurance;

  • petroleum products (including aviation spirit, jet fuel, liquid petroleum gas (LPG) and LPG cylinders, compressed natural gas (CNG) and CNG cylinders, petrol, diesel, kerosene, heavy furnace oil, industrial diesel oil, avgas and bitumen);

  • agricultural services and implements;

  • certain unprocessed foods;

  • crops and livestock;

  • pesticides and fertilisers;

  • veterinary supplies;

  • funeral services;

  • tourist services;

  • postal supplies;

  • aircraft and certain supplies thereof, including leasing of aircraft;

  • fishing gear;

  • games of chance;

  • computers;



  • solar energy appliances and wind

powered energy appliances;

  • firefighting equipment;

  • burning jelly; and

  • certain dairy equipment.

Zero-rated supplies

Supplies that are zero rated, in respect of which the supplier may claim input tax deductions, include (but are not limited to):

  • exports of goods and certain taxable services;

  • supply of goods for consumption or duty-free sale on ships and aircraft on journeys to destinations outside Tanzania;

  • transport of goods in transit and ancillary transport services in connection with goods in transit;

  • various specified services for foreign-going ships and aircraft;

  • supply by a local manufacturer of various agricultural implements, fertilisers, pesticides, etc.;

  • supply by a local manufacturer of fishing nets and accessories;

  • supply by a local manufacturer of human and veterinary medicine, drugs and equipment designed for use by the blind or disabled, mosquito coils and sanitary pads; and

  • supply of locally manufactured


Special relief supplies

Supplies to or imports by designated categories of person are entitled to ‘special relief’ from the VAT that would otherwise be charged. The relief is conditional on certain procedures being followed. The designated categories of person include:

  • diplomats or diplomatic missions;

  • mineral exploration or prospecting companies;

  • petroleum and gas exploration and prospecting companies;

  • projects funded under technical aid or by donors;

  • medical practitioners, opticians, dentists, hospitals, clinics or veterinary practitioners;

  • personal effects of travellers or deceased;

  • charities, nonprofit organisations or religious organisations;

  • water or sewerage authority;

  • spectacle lens manufacturers;

  • registered educational establishments;

  • water drilling companies, of goods to be used solely for water drilling;

  • anyone importing/purchasing capital goods, firefighting equipment, railway locomotives;

  • investors licensed under the Export Processing Zones Act, 2002; and

  • the Bank of Tanzania.

Input tax

Input tax allowed

VAT incurred on goods and services supplied to a taxable person for the purposes of a business carried on or to be carried on by him, and which relates to taxable supplies made or to be made by him, may be deducted as input tax.

A business that makes only exempt supplies cannot register for VAT and cannot claim any input tax.

Input VAT, which would otherwise qualify for input tax deduction, is not deductible if no tax invoice is held at

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