Tax on retained earnings spurs heated fiscal debate in Tanzania
The minister for Finance, Dr Mwigulu Nchemba (left), and the minister of State in the President’s Office [Planning and Investment], Prof Kitila Mkumbo take notes on lawmakers’ contributions during the budget debate in Parliament on Wednesday on June 18. PHOTO | EDWIN MJWAHUZI
Josephine Christopher is a senior business journalist for The Citizen and Mwananchi newspapers
Mwananchi Communications Limitted
Dar es Salaam. The government’s decision to impose a 10 percent withholding tax on retained earnings has ignited spirited debate inside and outside Parliament, attracting both cautious optimism and stern warnings.
Announced as part of strategic amendments to the Income Tax Act (CAP 332) in the 2025/26 budget, the measure is being championed as a critical step towards broadening the tax base, while raising questions about its potential impact on investment, private sector growth, and the long-term financing landscape.
