Tanzania has outlined a proposal to amend the Income Tax Act to enable the collection of taxes from the crypto trades in the country.
This is according to a speech by the Minister for Finance, Hon. Dr. Mwigulu Lameck Nchemba Madelu (MP), to the National Assembly on June 13 2024, presenting the estimates of the government revenue and expenditure for 2024/25.
The speech includes several proposed enhancements to enhance the country’s revenue targets. This includes an amendment to the Income Tax Act to introduce a 3% withholding tax on incomes derived from ‘digital asset’ transactions, as highlighted below:
- Introduce the Withholding Tax at the rate of 3 percent on income derived from transfer of digital assets. The changes go in tandem with the interpretation of the following word, ‘digital assets.’
- Furthermore, owner of the digital platform, or any person who facilitates digital asset transfers or exchange, will become a withholding agent and shall remit the withheld tax to the Commissioner General of the Tanzania Revenue Authority.
- A foreign citizen who operates a digital platform which facilitate transfers or exchange of digital assets, shall be registered by Tanzania Revenue Authority under the Simplified Tax Regime. This measure is expected to enhance government revenue collection by 465 million shillings (~$174,000).
The Tanzanian government is also planning to enhance its coffers through the taxation of digital content creation, as outlined in the budget statement.
“Introduce Withholding Tax at the rate of 5 percent on income derived from the business of digital content creation which is done by the resident business entities. The purpose of this measure is to enhance the tax base and adherence to equitable tax principles. This measure is expected to enhance government revenue collection by 968 million shillings,” the statement reads.
In 2022, the Finance and Planning Minister revealed that the Bank of Tanzania is ‘finalising preparations of a business case for establishment of a CBDC in Tanzania and evaluation of crypto assets after recording significant progress’ in formalising digital financial services.
Tanzania is ‘Finalizing a Business Case for Evaluation of Crypto Assets,’ Says Finance Minister https://t.co/UmySxMUBTw @BankOfTanzania #Tanzania
— BitKE (@BitcoinKE) April 14, 2022
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