Budget 2020 proposes tax relief to employees
Dar es Salaam. Tanzania’s finance minister has proposed amendment in the Income Tax Act, Chapter 332 withthe aim of providing income tax relief to employees.
The Minister for Finance and Economic Planning Dr Philip Mpango proposed this today June 11, when tabling the 2020/21 budget in parliament.
According to him, the government is proposing amendment aimed at increasing employee's income level that will increase the taxable income threshold from Sh170,000 per month to Sh270,000 per month equivalent to from Sh2,040,000 per annum.
“This measure alone is expected to reduce revenue by Sh517.2 million,” he said.
In another development, he said the government was also recommending amendments to the value Added tax Act, Chapter 148.
Explaining he said the decision aimed to exempt Value Added Tax on crop farming insurance.
“The decision for this is to reduce costs and provide relief in agricultural insurance to enable farmers cover their agricultural activities and therefore attract the public to start using insurance services to protect themselves in disasters affecting their activities like drought and floods among others,” he said.
He further noted that the decision aimed to make necessary adjustments for exporters of raw products abroad to continue recovering Value Added Tax paid on service costs or products to enable the products to compete in foreign markets.
He said the proposal also aims to conform to the basis of VAT charge with respect to product location when applicable (destination principle).
All Value Added Tax measures is generally expected to reduce government revenues by Sh46 million.
