Zanzibar proposes new taxes to boost local industries and protect jobs

Unguja. The Revolutionary Government of Zanzibar, has announced proposed increases in taxes on several imported products, including beverages, biscuits, and more.

Presenting her budget speech Dr Saada Salum Mkuya said the move aims to strengthen local industries and create more employment opportunities.

Dr Saada explained that the government continues to take strategic steps to stabilize the tax system as a way to improve the business climate, encourage investment, and promote voluntary tax compliance. The government plans to spend Sh6.892 trillion in the coming fiscal year.

Supporting local production

Last year, the House of Representatives approved a tax of Sh300 per kilogram on imported chicken and fish to encourage local production, ensure fair market competition, and boost jobs.

“However, imports of these products remain high, leading to reduced competition, lower local production, and fewer jobs,” Dr. Saada noted.

To address this, the government now proposes increasing the tax on imported chicken and fish from Sh300 to Sh1,000 per kilogram. This is expected to generate an additional Sh7.25 billion in revenue and support local farmers and fishermen.

Infrastructure

The government also plans to impose an infrastructure tax of Sh50 per liter on clean and safe water imported into Zanzibar. The projected revenue of Sh2.27 billion will be invested in improving water services through a dedicated water fund.

Wine and spirits

In line with amendments to the Excise Duty Act of 2017, excise taxes on imported wine and spirits will be raised from Sh4,386 to Sh6,000 per liter. This is expected to raise Sh1.25 billion, which will go towards strengthening the Health Fund.

Shisha

To combat the rising use of shisha among young people, Dr. Saada revealed that the government had imposed a 120 percent excise tax last year. However, consumption continues to grow.

She therefore proposes a special excise tax of Sh28,232 per kilogram of shisha flavor, aiming to reduce its use and raise Sh1.27 billion for the Health Fund.

Biscuits and sweets

For the first time, the government will impose a tax of Sh1,000 per kilogram on imported sweets, biscuits, and chocolates. This step aims to curb unhealthy consumption habits among children and is expected to add Sh500 million to the Health Fund.

Environment

The government is also targeting plastic products such as plates, glasses, and bowls, which contribute significantly to environmental pollution due to their slow decomposition. A 5% tax on the import of plastic items per kilogram is proposed, expected to bring in Sh547 million. These funds will support environmental conservation efforts.

Older imported vehicles

To promote better environmental standards, excise taxes on imported cars aged between five and ten years will remain at 15%. This policy is anticipated to generate Sh1.27 billion for the environment fund.

Finally, the government intends to increase road license fees from Sh38 to Sh100 per liter and the road development levy from Sh100 to Sh200 per liter on diesel and petrol imports. These increases aim to collect Sh35.75 billion, which will be invested in upgrading the country’s road infrastructure.

Dr Saada emphasised that these measures are part of the government’s broader strategy to protect local industries, safeguard jobs, improve public health, and protect the environment while ensuring sustainable economic growth.