Tanzania targets Sh586.4 billion from new domestic taxes to bridge HIV and health funding gap
What you need to know:
- The move marks a strategic pivot in Tanzania’s health financing model, as global development partners reduce or withdraw support
Dar es Salaam. The government expects to raise Sh586.4 billion from new domestic sources to bolster the fight against HIV/AIDS and support the Universal Health Fund (UHF), following significant cuts in international aid.
The move marks a strategic pivot in Tanzania’s health financing model, as global development partners reduce or withdraw support for disease control programmes, particularly those targeting HIV/AIDS.
The resulting funding gap has prompted a proactive domestic response.
Finance Minister Dr Mwigulu Nchemba unveiled the plan in Parliament, outlining proposed amendments across a dozen sectors aimed at creating a sustainable revenue stream for the country’s most critical health needs.
“Under these new fiscal measures, 70 percent of the additional revenue generated will be allocated to the AIDS Trust Fund, while 30 percent will support the Universal Health Fund,” Dr Nchemba said.
Revenue sources expanded
To meet the ambitious target, the government will increase excise duty on alcoholic beverages—adding Sh20 per litre on beer, Sh30 per litre on wine, and Sh50 per litre on spirits.
Excise duty on electronic communication services will also rise slightly from 17 percent to 17.5 percent.
Additional revenue will be raised through new and increased levies in multiple areas: Sh10 per litre fuel levy on petrol, diesel, and kerosene, 0.1 percent levy on the gross market value of minerals, increased winning tax on sports betting (from 10 percent to 15 percent), increased winning tax on land-based casinos (from 12 percent to 15 percent)
Vehicle and ticket levies introduced
Furthermore, new levies will be introduced on imported vehicles and heavy machinery, varying based on engine capacity, alongside a Sh500 levy on train tickets and a Sh1,000 levy on air transportation tickets.
“To introduce levy on imported vehicles and heavy machinery as follows: Sh50, 000 for vehicle with engine capacity of 0cc to 1000cc; Sh100,000 for vehicle with engine capacity of 1001cc to 1500cc; Sh150,000 for vehicle with engine capacity of 1501cc to 2500cc; Sh200,000 for vehicle with engine capacity of 2501cc and Above; Sh250,000 for machinery (excavators, bulldozers, fork lifts),” he said.
Passengers will also see a modest rise in transport costs, with a Sh500 levy on train tickets and a Sh1,000 levy on air travel tickets.
These new and adjusted tax measures, Dr Nchemba noted, are designed to build resilience in the country’s health financing, ensuring that critical programmes remain operational despite external funding challenges.
