The Tanzania Excise (Non-Resident Service Providers) Regulations 2026

The growth of the digital economy is continuing to transform how services are supplied and consumed, enabling businesses to provide services across borders without a physical presence in the market jurisdiction.

In response to these developments and to ensure that digital consumption contributes to domestic revenue mobilization, the Finance Act, 2026 amended the Excise (Management and Tariff) Act, Cap. 147 (the Excise Duty Act) by expanding the excise duty base to cover services supplied by non-residents to Tanzanian consumers through the internet or other electronic means. The amendment, which takes effect from 1 July 2026, is intended to broaden the excise duty base, promote tax neutrality between resident and non-resident service suppliers, and align the excise duty framework with the realities of the digital economy.

To implement this amendment, the Minister for Finance issued the Excise (Non-Resident Service Providers) Regulations, G.N. No. 158E of 2026 (the Regulations), which establish the registration, reporting and payment framework applicable to non-resident providers of covered services. The Regulations set out the categories of services subject to excise duty, the circumstances under which services are deemed to be delivered in Tanzania, and the compliance obligations imposed on affected non-resident service providers.

The introduction of these Regulations marks another significant development in Tanzania's taxation of the digital economy and aligns with the growing international trend of taxing digital services in the jurisdiction where they are consumed.

This article provides a synopsis of the Regulations which are made under sections 124 and 126 of the Excise Duty Act.

Scope of the Regulations

The Regulations apply to non-resident service providers delivering specified services through the internet to Tanzanian consumers who are not registered under the Excise Duty Act.

The following services supplied by a non-resident to Tanzanian consumers through the internet or other electronic means are subject to excise duty:

Mandatory Registration of Non-Resident Providers

Non-resident service providers that fall within the scope of the Regulations are required to register electronically with the Commissioner General of the Tanzania Revenue Authority (the CG). Applications must be supported by prescribed information, including:

• Business name and trading name;
• Certificate of incorporation;
• Contact details for tax matters;
• Registered business address;
• Website or uniform resource locator; and
• Any additional information required by the CG.

Upon successful registration, the CG will issue a Taxpayer Identification Number (TIN) for purposes of filing returns and paying excise duty.

Service providers already operating in Tanzania prior to the commencement of the Regulations are required to register within 90 days from 1 July 2026.

Determining Whether Services Are Supplied in Tanzania

The Regulations adopt a destination-based approach to determine when a service is delivered in Tanzania.

A service provided by a non-resident is deemed to have been delivered in Tanzania where the recipient is an unregistered person and there are indicators demonstrating a Tanzanian connection. These indicators include:

• The recipient has a physical address in Tanzania;
• The recipient uses a Tanzanian bank account for payment, or the billing address held by the bank is in Tanzania;
• The internet protocol (IP) address or other geolocation data indicates that the recipient is in Tanzania;
• The mobile country code associated with the recipient's SIM card is Tanzanian;
• The fixed landline through which the service is delivered is in Tanzania; or
• Other commercially relevant information indicates that the recipient is resident in Tanzania.

The Regulations further establish a hierarchy of reliability among these indicators. Where conflicting evidence exists, for example where certain indicators point to Tanzania while others point to another jurisdiction, the service provider is required to determine the residence of the customer based on the indicators considered to be the most reliable. The Regulations expressly provide that the listed indicators are arranged in descending order of reliability, with a physical address being the most reliable indicator.

The Regulations adopt a rebuttable presumption that a Tanzanian-resident customer is an unregistered person. Accordingly, a non-resident service provider must treat a Tanzanian-resident customer as unregistered unless the customer provides documentary evidence confirming its registration status under the Excise Duty Act.

Filing and Payment Obligations

Registered non-resident service providers are required to:

• File monthly returns electronically; and
• Pay the relevant excise duty on or before the seventh (7^th) day of the following calendar month.

A service provider can apply to the CG to correct errors in a submitted return.

Excise duty must be paid into a bank account designated by the CG and may be settled in Tanzanian shillings or a convertible foreign currency, using the Bank of Tanzania (the BoT) prevailing exchange rate on the date of payment.

Exemption from Electronic Fiscal Device Requirements

The Regulations exempt registered non-resident service providers from the requirement to acquire and use Electronic Fiscal Devices (EFDs), which are ordinarily used to issue tax invoices or fiscal receipts. The exemption reduces compliance costs and acknowledges that the non-resident service providers operate through digital platforms without a physical presence in Tanzania.

Penalties for False or Misleading Statements

The Regulations provide that a person who makes a false or misleading statement or omits material facts in a statement made to a tax officer, is liable to penalties under section 90 of the Tax Administration Act. The penalty is:

• 50% of the tax shortfall where the statement or omission is made without reasonable excuse; or
• 75% of the tax shortfall where the statement or omission is made knowingly or recklessly.

Interest on Late Payment

A registered non-resident service provider that fails to pay excise duty by the due date is liable to interest on the overdue amount at the commercial bank lending rate, determined as the BoT discount rate at the beginning of the year plus five percent (5%) per annum.

What Should Non-Resident Service Providers Do?

Considering the new Regulations, non-resident service providers supplying covered digital services to customers in Tanzania should take the following steps:

• Assess whether their services fall within the scope of the regime.
• Register with the Tanzania Revenue Authority (TRA) if they deliver covered services to Tanzanian consumers. Existing providers are required to register by 29 September 2026.
• Implement systems to identify Tanzanian customers using the residence indicators prescribed by the Regulations.
• Establish processes for determining whether customers are registered or unregistered for excise duty and obtain documentary evidence from customers claiming registered status.
• Maintain accurate transaction records and supporting documentation demonstrating how customer residence and excise duty liabilities have been determined.
• Configure billing systems to calculate and account for the applicable excise duty on services supplied to Tanzanian consumers.
• File monthly electronic returns and pay excise duty by the seventh day of the following month to avoid interest and penalties.
• Review internal compliance controls to minimize the risk of filing inaccurate returns or providing false or misleading information to the TRA, which may attract significant penalties.