Major Tax Reforms in the Tanzania Budget 2026/27-Tax Administration Act, TRA Act and Local Government Finance Act

Allow sale of perishable seized/distained goods by public auction or private treaty after notice. Objective: protect value and revenue. Tax implication: pro—administratively sensible and reduces value loss; con—requires very clear due-process safeguards and valuation procedures.

Increase Customs Processing Fees from 0.6 percent to 1 percent. Objective: raise revenue for electronic revenue systems. Tax implication: pro—funds modernization; con—an ad valorem processing fee risks functioning like a hidden trade tax if it exceeds the cost of the service. Cost-recovery logic would suggest a stronger case if the fee were transparently linked to actual processing costs.

Increase LGA revenue allocation to 15 percent with 5 percent for markets and entrepreneurship areas. Objective: employment, formalisation and business infrastructure. Tax implication: pro—better alignment of local spending with formalisation goals; con—earmarking and implementation capacity remain the weak points.

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