Correction: Tanzania's VAT withholding rate is 3% on goods and 6% on services, not 15% and 12%

What changed in detail

This corrects tz-vat-withholding-agent-filing-2026, which reported that Tanzania’s Finance Act 2026 set the VAT withholding rate at 15 per cent for supplies of goods and 12 per cent for supplies of services. Those are not withholding rates.

The Tanzania Revenue Authority states that where a supply subject to the standard rate is made in Mainland Tanzania to a withholding agent, the applicable VAT rate remains 18 per cent. The withholding agent withholds 3 per cent of the consideration on a supply of goods and 6 per cent on a supply of services and remits that amount to the Commissioner General. The taxable person making the supply is accordingly entitled to receive 15 or 12 per cent respectively of the consideration from the withholding agent.

The 15 and 12 per cent figures that section 91 of the Finance Act 2026 inserted into section 5(5) of the Value Added Tax Act are therefore the shares payable to the supplier, not the amounts to be withheld. Section 5 of the Act is headed “Value added tax rate and amount payable”, which is consistent with that reading.

The 3:2 apportionment for a supply combining goods and services, reported in the same earlier entry, is unaffected and remains correct.

What it means

This is the difference between withholding 3% and withholding 15% — an agent that took the earlier figure at face value has been withholding five times too much on every supply of goods since 1 July 2026, and twice too much on services. The money is not lost, but it sits with the Commissioner General instead of with the supplier, and unwinding it means re-running payments rather than adjusting a future return.

The error is an easy one to make from the statute alone. The Finance Act amends section 5(5) by substituting the words “goods shall be fifteen percent and to taxable person supplying service shall be twelve percent respectively” — read in isolation, that looks like a rate table. It is only when you read it against the section heading, “Value added tax rate and amount payable”, and against the authority’s own explanation that the 18 per cent stays put and the agent withholds the difference, that the figures resolve into shares of the consideration paid over to the supplier.

Where a published figure and an authority’s own guidance disagree, check which quantity the statute is actually naming before configuring anything.