Introduction
The rapid development of information and communication technology has transformed commercial activity, enabling businesses to transact through digital platforms without maintaining a physical presence in the jurisdictions where their customers are located. This development has challenged the traditional principles of international taxation based on residence, source and permanent establishment, raising concerns about taxable nexus, income characterisation and enforcement.1 International organisations, particularly the Organisation for Economic Co-operation and Development (OECD) and the African Tax Administration Forum (ATAF), have emphasised the need for effective legal frameworks to address the taxation challenges arising from the digital economy.2
In Tanzania, the taxation of online businesses is governed principally by the Income Tax Act,3 the Value Added Tax Act4 and the Tax Administration Act.5 These laws regulate residence, source of income, permanent establishment, the taxation of electronic services, taxpayer registration and tax administration. Despite these legislative measures, challenges remain concerning digital taxable nexus, the identification of online taxpayers and cross-border enforcement. This article examines the adequacy and effectiveness of the legal framework regulating the taxation of online businesses in Mainland Tanzania.
Background to the problem
The expansion of the digital economy has exposed the limitations of conventional taxation systems, particularly where businesses derive income from a jurisdiction without establishing a physical presence there. In Tanzania, the Law Reform Commission recognised the challenges associated with electronic commerce in 2006 and recommended legal reforms to accommodate technology-driven commercial transactions.6
Tanzania subsequently introduced legislative reforms through the Finance Acts of 2022, 2023, 2024 and 2025. The Income Tax Act establishes the legal principles governing residence, source of income and permanent establishment.7 It further provides a specific taxation mechanism for qualifying income received by non-residents from electronic services.8 Similarly, the Value Added Tax Act regulates the place of supply of electronic services9 and the VAT obligations of non-resident suppliers.10
The Tax Administration Act provides mechanisms for taxpayer registration,11 the electronic filing of tax returns12 and tax assessment and enforcement. These administrative measures have been supplemented by the Tax Administration (General) (Amendment) Regulations, 2026, which introduce tax-identification display requirements for persons conducting business through social-media platforms.13
Notwithstanding these reforms, challenges persist concerning digital taxable nexus, income characterisation, the identification of informal online businesses, digital assets and cross-border tax enforcement. This article therefore examines whether Tanzania’s existing legal framework provides clear, coherent and enforceable mechanisms for taxing online businesses in Mainland Tanzania.
Legal framework governing the taxation of online businesses
A. Income Tax Act
The Income Tax Act provides the principal framework for the taxation of income generated through online business activities.14 Sections 86 to 90 regulate residence and the source of income, while sections 91 to 93 regulate permanent establishments. These traditional connecting factors remain important, but they may be insufficient where a non-resident business derives substantial income from Tanzanian consumers without maintaining conventional physical premises.
The Finance Act, 2023 strengthened the source rules applicable to electronic services by treating payments received by a non-resident for an electronic service consumed by, or attributable to, an individual in Tanzania as having a source in Tanzania, regardless of the place of payment. Most importantly, section 116 of the Income Tax Act taxes payments received by non-residents from individuals, other than payments made in the course of a business, in respect of electronic services. The tax, introduced in 2022 and extended in 2023, was imposed at two per cent of the gross payment.15 With effect from 1 July 2026, the Finance Act, 2026 raised the rate to three per cent.16
The Income Tax Act has adapted substantially to digitalisation, but its specific electronic-services regime does not establish a comprehensive digital taxable-nexus rule applicable to every form of online business.
B. Value Added Tax Act
The VAT framework is particularly suited to online transactions because it focuses substantially on the place of consumption.17 Successive Finance Acts have broadened the statutory list of electronic services to include online intermediation and online advertisement services, online data services and, since 2025, online accommodation marketplaces and payment services platforms.18 The Finance Act, No. 5 of 2022 also introduced a simplified route by which a non-resident for whom appointing a VAT representative is impracticable may register directly with the Commissioner.19 The Finance Act, 2025 further introduced a VAT rate of sixteen per cent, in place of the standard eighteen per cent, for standard-rated supplies to unregistered persons who pay through a bank or an electronic-payment system approved by the Commissioner General, thereby encouraging transaction traceability.20 From 1 July 2026, the Finance Act, 2026 also deems the operator of an online intermediation service or digital marketplace to be the supplier of electronic services supplied through it to unregistered persons in Mainland Tanzania.21
Tanzania has developed a substantially progressive VAT regime for electronic services, although effective collection still depends on registration, transaction visibility and enforcement against non-resident suppliers.
C. Tax Administration Act
The Tax Administration Act provides the administrative machinery through which online-business tax obligations are registered, assessed, collected and enforced.22 Sections 22 to 26 regulate Taxpayer Identification Numbers; sections 42 to 46 regulate electronic tax administration, records and filing; sections 51 to 55 provide information and audit powers; sections 57 to 60 regulate assessments; and sections 65 to 80 provide mechanisms for payment and recovery.
A particularly important recent development is the Tax Administration (General) (Amendment) Regulations, 2026 (G.N. No. 158G of 2026). Regulation 2 amended regulation 58 of the Tax Administration (General) Regulations, 2016 by inserting a requirement that a person conducting business on social media must display the Certificate, Tax Identification Number or Tax Clearance Certificate on the social-media profile or account in a manner that is easily seen.23
The amendment came into operation on 1 July 2026 and states expressly that the requirement is intended to ease inspection and enforcement.24 The amendment is highly relevant to this study because it provides a direct regulatory response to one of the major problems associated with the taxation of online businesses: identifying persons conducting commercial activities through social-media platforms. The reform strengthens taxpayer visibility by requiring online traders to disclose a tax-related identifier publicly on the account through which the business is conducted.
However, the amendment does not by itself resolve every identification problem. Its effectiveness still depends on identifying the accounts that are actually conducting business and on enforcing the display requirement against traders who deliberately remain outside the formal tax system.
The Tax Administration Act, read together with the 2026 Amendment Regulations, provides an increasingly digital and adaptable administrative framework. The 2026 amendment represents a significant improvement in the identification and enforcement of social-media businesses.
D. Finance Act, 2024
The Finance Act, 2024 expanded the legal framework by expressly recognising digital content, digital content creators and digital assets, including cryptocurrencies, tokens and non-fungible tokens. With effect from 1 July 2024, it also introduced withholding at five per cent on payments to resident digital content creators and at three per cent on payments to resident persons by owners of digital-asset exchange platforms and facilitators for the exchange or transfer of digital assets.25 The 2024 reforms significantly improved the recognition of emerging digital income, although questions of classification and taxable nexus may still arise.
E. Finance Act, 2025
The Finance Act, 2025 strengthened online-business taxation through reforms concerning online intermediation platforms, accommodation marketplaces, payment-services platforms, electronic payments, small-scale informal traders and computerised tax administration.26
Its electronic-payment reforms improve transaction visibility, while the expansion of electronic services broadens the VAT base. The 2025 reforms strengthen electronic tax administration and transaction visibility but do not create a comprehensive digital significant-economic-presence rule.
F. Electronic Transactions Act
The Electronic Transactions Act gives legal recognition to electronic records, electronic contracts, electronic signatures, electronic payments and electronic evidence.27 Although it does not itself impose tax, it supports online-business taxation by giving legal effect to the records and transactions on which assessment and enforcement may depend. The Act is an important supporting statute that enhances the administrability and evidential enforceability of digital taxation.
G. Digital payment laws and regulations
Digital payments form an integral part of the legal environment in which online businesses operate. Online traders may receive consideration through electronic fund transfers, mobile money, internet-based payment instruments, QR-code payments and other electronic payment services. The regulation of these payment channels is relevant to taxation because it determines who may provide payment services, what transaction records must be maintained, how customer and merchant information is protected and the circumstances in which regulators may obtain information. The principal statute is the National Payment Systems Act.28
i. Scope and regulatory purpose of the National Payment Systems Act
The National Payment Systems Act applies throughout the United Republic and regulates payment systems, electronic payment instruments, electronic money, payment-system service providers, settlement finality and related matters. Section 3 defines an electronic fund transfer as a transfer of money through an electronic terminal or device from one account to another. It also defines electronic money, electronic payment service, payment instrument, payment system and payment-system provider. These definitions are important because they bring the technological channels through which online-business receipts are collected within a formal statutory framework rather than leaving such transactions outside financial regulation.29
Section 4 assigns the Bank of Tanzania responsibility for licensing, regulating, supervising, investigating and overseeing payment systems. The Bank also provides settlement services, operates a real-time gross settlement system and coordinates payment-system activities with relevant stakeholders. For online-business taxation, the significance of this institutional arrangement is that electronic payment activity is supervised by a regulator capable of requiring information and maintaining standards applicable to both bank and non-bank providers.30
ii. Licensing of payment systems and electronic payment instruments
Sections 5 to 7 prohibit a person from operating a payment system without a licence issued by the Bank. Eligible activities include clearing payment instructions, settling obligations, transferring funds electronically, transferring electronic money, providing switching and routing technology, facilitating interoperability and providing electronic payment services to unbanked and under-banked persons. The licensing model is important to tax administration because it establishes identifiable intermediaries through which a substantial proportion of online-business payments may pass.31
Sections 15 and 16 regulate electronic payment instruments. An electronic payment instrument must be licensed or approved and may include an instrument capable of ordering or transmitting payment instructions, storing information for payment purposes or being accepted at merchant outlets or over the internet. The express statutory reference to acceptance over the internet demonstrates that the payment legislation is technologically capable of supporting digitally conducted commerce.32
iii. Electronic money and mobile-money transactions
Part VI regulates electronic money. Section 24 prohibits the issuance of electronic money without a licence or approval, while section 30 requires an issuer to issue electronic money only against equivalent cash held in a trust account or special account and to submit, in electronic form, the names of all subscribers and users whose funds are held in the trust account to the bank holding that account. Sections 32 to 35 further regulate trust and special bank accounts. These provisions are particularly relevant in Tanzania, where online and social-media businesses may receive payments through electronic-money channels rather than conventional bank transfers.33
From a tax perspective, electronic-money records can provide evidence of the existence, frequency and value of transactions. Nevertheless, the mere receipt of funds into an electronic wallet cannot automatically be equated with taxable business income. A payment may represent a private transfer, loan, refund, gift or other non-business receipt. Tax administration must therefore connect payment data with the legal character of the transaction and the taxpayer’s business activity before imposing liability.
iv. Returns, access to information and retention of records
Part XI contains provisions of direct relevance to tax enforcement. Section 43 requires a payment-system provider to submit returns relating to the operation of the payment system or electronic payment service as prescribed by the Bank. Section 44 gives the Bank access to information relating to any payment system and authorises written requests requiring a provider to furnish information within fourteen days. Section 46 requires payment-system providers to maintain records of all electronic payment transactions and of information obtained or generated in the operation, administration or management of the payment system for the prescribed period, in a manner that preserves the originality of those records.34
These provisions create a legally recognised transaction trail that can support taxpayer identification, audit and verification where the tax authority has lawful access to the relevant information. In the context of online businesses, this is particularly important because a trader may have little visible physical presence while generating a substantial electronic payment history. The ability to preserve electronic transaction records therefore reduces, although it does not eliminate, the informational disadvantage faced by tax authorities.
v. Confidentiality and protection of customer information
The information powers under the National Payment Systems Act are balanced by confidentiality safeguards. Section 45 provides that information obtained by the Bank under section 44 is confidential and may not be disclosed unless disclosure is required by law, although the Bank may share it with another agency responsible for regulating or supervising payment-system providers under an information-sharing agreement for supervisory or oversight purposes. Section 48 separately requires payment-system providers to protect the privacy of participant and customer information and prohibits disclosure except in compliance with the law, an order of a court or with the express consent of the person concerned.35
The tax implication is that payment information is not automatically available to the Tanzania Revenue Authority merely because it exists within a regulated payment system. Any disclosure must be grounded in lawful authority. This safeguard is important for maintaining proportionality, taxpayer confidence and the integrity of financial information. It also means that reforms seeking greater use of payment data for tax enforcement should establish clear statutory reporting obligations rather than relying on informal administrative access.
vi. Cooperation between regulators
Section 55 requires the Bank of Tanzania to cooperate with other regulators and Government agencies relevant to payment systems in areas including monitoring, the supervision of payment systems, the efficiency of Government payments, tax payments and other financial payments. This provision is particularly important for the present study because it expressly recognises a relationship between payment-system regulation and tax administration.36
The provision supports institutional coordination between the Bank of Tanzania and the Tanzania Revenue Authority. However, cooperation under section 55 does not itself create a general, automatic tax-reporting obligation for every payment-system provider. This study therefore distinguishes between inter-regulatory cooperation and a legally defined third-party reporting regime. A more explicit reporting framework could improve the identification of online businesses while preserving statutory confidentiality protections.
vii. Payment Systems (Licensing and Approval) Regulations, 2015
The Payment Systems (Licensing and Approval) Regulations, 2015 supplement the Act by prescribing licensing, governance, risk-management, data and record-keeping requirements. Regulation 6 requires a non-bank or non-financial institution applying for a payment-system licence to provide incorporation documents, ownership information, source-of-funds material, a certified copy of its Taxpayer Identification Number and, for a going concern, a copy of its tax clearance certificate. This demonstrates that tax identity is integrated into the payment-system licensing process.37
Regulation 40 requires a provider to maintain a sound management-information system capable of efficiently collecting and processing information and statistical data and of providing an audit trail for the provider, internal and external auditors and the Bank. Regulation 41 requires records of all transactions conducted in the course of business to be kept for not less than ten years from the date of the transaction. Regulation 42 requires the provider’s primary data centre relating to payment-system services to be located in Tanzania. Collectively, these rules strengthen the availability, durability and domestic accessibility of transaction data.38
Regulation 45 requires compliance with anti-money-laundering and counter-terrorist-financing obligations, including customer-identification procedures and internal controls for identifying and reporting suspicious transactions. Regulation 46 prohibits the operation of cross-border payment-system services without the written approval of the Bank. These rules demonstrate that payment-system providers are subject to a significant compliance framework, but their principal regulatory purpose is the integrity of the financial system rather than tax collection.39
viii. Tanzania Quick Response Code Standard 2022
The Tanzania Quick Response Code Standard 2022, issued by the Bank of Tanzania, standardises merchant-presented QR-code payments. The Standard aims to increase electronic payments, promote interoperability, contain payment risks and enhance security. It applies to banks, electronic-money issuers and other payment-service providers participating in merchant QR-code payments.40
The Standard is particularly relevant to taxation because it requires structured merchant and transaction information. Merchant account information identifies the payment network and the merchant; additional merchant information includes the merchant category code, country code, merchant name, merchant city and postal code; and transaction-value fields include the currency and the transaction amount. The additional-data template may also carry bill numbers, reference labels, consumer labels and, as optional fields, payment-system-specific information such as a tax ID, cashier ID and channel ID.41
The architecture illustrated in Annex 1 of the TANQR Standard shows a merchant displaying a QR code, a customer scanning and confirming payment, an acquirer and an issuer processing the transaction and a network facilitator routing it. This structure demonstrates that QR payments ordinarily generate multiple identifiable data points across regulated participants. In principle, such information can strengthen the verification of merchant turnover when it is accessed under lawful tax-administration powers.42
ix. Evaluation of the digital-payment framework for tax purposes
This study finds that Tanzania possesses a developed payment-law framework capable of supporting the taxation of online businesses. The framework formalises payment intermediaries, requires transaction records, creates audit trails, regulates electronic money and enables regulatory cooperation. These characteristics can improve the visibility of online commercial transactions compared with cash-based trading.43
Nevertheless, several gaps remain. First, the payment legislation does not establish a comprehensive automatic reporting regime under which payment-system providers routinely transmit tax-relevant merchant data to the Tanzania Revenue Authority. Secondly, traders may use multiple personal and business accounts, which complicates the separation of commercial receipts from private transfers. Thirdly, foreign payment platforms may process transactions beyond the practical reach of domestic regulators. Fourthly, extensive use of payment data for taxation raises legitimate concerns regarding confidentiality, proportionality and purpose limitation.
Accordingly, the legal framework would be strengthened by a carefully defined statutory mechanism for the third-party reporting of tax-relevant merchant information, subject to thresholds, confidentiality safeguards, taxpayer rights and clear restrictions on use. Such a mechanism would better connect the existing payment-system infrastructure with the enforcement powers contained in the Tax Administration Act.
Institutional framework
A. Tanzania Revenue Authority
The Tanzania Revenue Authority (TRA) is the principal institution responsible for administering and enforcing the tax laws applicable to online businesses. Its functions include the registration of taxpayers, the assessment and collection of tax, audit, recovery, enforcement and the administration of electronic tax systems.44 In the digital economy, the TRA’s effectiveness depends increasingly on its ability to connect tax registration with electronic filing, payment information, platform activity and cross-border cooperation.
B. Bank of Tanzania
The Bank of Tanzania is the principal regulator of payment systems under the National Payment Systems Act. It licenses and supervises payment-system providers, electronic payment instruments and electronic-money issuers and has statutory access to payment-system information.45 Its role is complementary to that of the TRA: the Bank regulates the payment infrastructure, while the TRA determines and enforces tax liability. Effective taxation of online businesses therefore requires lawful cooperation between the two institutions, particularly where payment records are relevant to taxpayer identification and verification.
C. Ministry responsible for finance
The Ministry responsible for finance performs the central fiscal-policy and legislative role. Annual Finance Acts have been the principal mechanism through which Tanzania has introduced and refined measures dealing with non-resident electronic services, digital marketplaces, digital content, digital assets and electronic tax administration. The Ministry therefore plays a key role in translating policy responses to the digital economy into statutory amendments.
D. Law Reform Commission of Tanzania
The Law Reform Commission of Tanzania contributes to the systematic review of legislation. Its 2006 report on electronic commerce and cybercrimes recognised that electronic transactions created legal issues involving evidence, jurisdiction and taxation.46 The continuing pace of technological development makes periodic law-reform review particularly important because business models, digital assets and payment technologies may evolve faster than ordinary legislative cycles.
E. Institutional coordination and information sharing
The institutional framework is dispersed across bodies with different statutory mandates. The TRA administers tax, the Bank of Tanzania regulates payment systems, the Ministry develops fiscal policy and the Law Reform Commission undertakes law-reform analysis. Fragmentation is not necessarily a weakness if the institutions operate under clear coordination and information-sharing rules. The principal concern is that gaps may arise where tax enforcement depends on information held by another regulator or by private intermediaries.
This study therefore finds that institutional coordination should be strengthened through express statutory protocols governing tax-relevant information, confidentiality, secure transmission, purpose limitation and accountability. Such coordination would improve enforcement without converting financial regulation into unrestricted surveillance of private transactions.
Assessment of the adequacy of the existing framework
Tanzania’s framework is substantially developed and increasingly responsive. The 2022 to 2025 Finance Act reforms expanded the substantive tax base, while the 2026 Tax Administration amendment goes further by specifically targeting taxpayer identification and enforcement in social-media commerce. This is an important development because the earlier reforms focused principally on liability, registration and electronic services, whereas the 2026 amendment directly addresses the visibility of online traders.
The analysis of the legal and institutional framework above supports this assessment at four points. A non-resident supplying electronic services to individuals in Tanzania is now charged to income tax on the gross payment under section 116 of the Income Tax Act and to VAT under the place-of-supply rule in section 51 of the Value Added Tax Act, with a simplified registration route where a VAT representative cannot practicably be appointed. Tax returns must be filed electronically under section 46 of the Tax Administration Act. Social-media traders must display a tax identifier on their accounts. And payment-system providers must keep records of every electronic transaction, for not less than ten years under the 2015 Regulations, while the Bank of Tanzania is bound to cooperate with other agencies on tax payments. This assessment rests on the text of the law rather than on measured compliance or collection data.
Nevertheless, the framework remains incomplete in relation to a general digital taxable nexus, enforcement against foreign digital suppliers, access to foreign-held transaction information, legislative fragmentation, and the source and characterisation of complex digital income. The framework is therefore best described as progressive and substantially adequate, but not yet fully comprehensive or equally enforceable.
Recommendations
A. Introduce a clear digital taxable nexus
The Income Tax Act should be reviewed to establish a clear rule addressing substantial digital economic participation by non-resident businesses without a conventional physical presence. Relevant indicators may include revenue derived from Tanzanian customers, the volume of transactions, sustained digital interaction and the deliberate targeting of the Tanzanian market.
B. Clarify source and characterisation rules
The law should provide clearer rules concerning the source and characterisation of income arising from cloud services, platform commissions, online advertising, subscriptions, bundled services, digital content and digital assets.
C. Consolidate digital-tax amendments
Digital-tax amendments introduced through successive Finance Acts and subsidiary legislation should be consolidated into updated principal legislation. This should include the harmonisation of terms such as electronic service, digital marketplace, online intermediation, digital content and digital asset.
D. Strengthen the 2026 social-media identification regime
The 2026 amendment should be supported by clear enforcement and compliance procedures. The TRA should issue guidance explaining who qualifies as a person conducting business on social media, which Certificate may be displayed, how a TIN or Tax Clearance Certificate should appear on the profile, the consequences of non-compliance and the treatment of persons using multiple social-media accounts. The requirement should apply to genuine commercial activity and should not automatically treat occasional private social-media transactions as businesses.
E. Introduce digital platform reporting
Qualifying digital marketplaces and intermediary platforms should be required, where appropriate, to report relevant information concerning sellers, transaction values and Taxpayer Identification Numbers. This would complement the 2026 requirement by enabling the TRA to verify whether social-media and platform businesses are properly identified.
F. Strengthen the use of third-party information
The TRA should make lawful and proportionate use of information held by banks, mobile-money operators, payment-service providers and digital platforms. Information powers should remain subject to confidentiality, relevance and procedural safeguards.47
G. Simplify registration for small online businesses
Registration and compliance procedures should be simplified for small social-media traders and other micro online businesses. This would encourage voluntary formalisation and reduce disproportionate compliance burdens.
H. Strengthen non-resident registration and enforcement
Simplified electronic registration for non-resident suppliers should continue, while Tanzania should strengthen mechanisms for the exchange of information and international assistance in tax collection.
I. Review double taxation agreements
Tanzania should periodically review its double taxation agreements to ensure that older permanent-establishment provisions do not unnecessarily restrict the taxation of modern cross-border digital economic activities.48
J. Strengthen electronic tax administration
The TRA should continue improving digital registration, return filing, electronic payments, transaction verification and risk-based compliance systems.49
K. Increase taxpayer education
The TRA should issue updated and accessible guidance for social-media traders, digital content creators, digital-asset participants, non-resident electronic-service suppliers and online platforms. Particular attention should now be given to educating social-media businesses about the 2026 display requirement.
L. Strengthen institutional capacity and coordination
The TRA should strengthen its specialist expertise in digital business models, digital assets, electronic evidence and cross-border taxation. Cooperation should also be improved between the TRA and the institutions responsible for business registration, communications and payment systems.
M. Periodic law-reform review
The Law Reform Commission of Tanzania should periodically review the impact of technological development on taxation and electronic commerce. The 2026 social-media amendment demonstrates why continuous legal review is necessary as commercial activity increasingly moves to digital platforms.
N. Final observation
The digital economy should increasingly be regarded as part of the ordinary economy rather than as a completely separate sector. The long-term objective should therefore be a tax system capable of applying the principles of fairness, source, economic capacity, neutrality and effective administration irrespective of whether business is conducted physically or electronically.
Tanzania’s recent reforms, culminating in the 2026 social-media tax-identification requirement, demonstrate substantial movement towards this objective. The remaining task is to transform these incremental developments into a coherent, technology-adaptable and effectively enforceable digital-tax framework.
Conclusion
This article concludes that Mainland Tanzania has established a substantially developed legal and institutional framework for the taxation of online businesses through the relevant tax legislation, successive Finance Acts and regulatory institutions. The reforms introduced between 2022 and 2026 have strengthened the taxation of electronic services, digital marketplaces, digital content and social-media businesses. Notably, the Tax Administration (General) (Amendment) Regulations, 2026 have improved taxpayer identification and enforcement. Nevertheless, significant challenges remain concerning digital taxable nexus, income characterisation, legislative fragmentation, cross-border enforcement and institutional coordination. Although the Tanzania Revenue Authority and the Bank of Tanzania provide essential regulatory and administrative support, effective taxation also requires closer coordination and lawful information sharing. The article therefore concludes that further legislative harmonisation, clearer taxation rules, improved digital reporting mechanisms and enhanced institutional capacity are necessary to establish a coherent, fair and effectively enforceable digital taxation framework capable of promoting sustainable revenue mobilisation in Mainland Tanzania.
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Footnotes
1. Arthur J. Cockfield et al., Taxing Global Digital Commerce 112 (2d ed. 2019); Brian J. Arnold, International Tax Primer 67 (4th ed. 2019); see also Reuven S. Avi-Yonah, International Taxation, Globalization, and the Economic Digital Divide, 26 J. Int’l Econ. L. 101 (2023), https://doi.org/10.1093/jiel/jgac068; Khodani Sengwane (nee Tshidzumba), South Africa’s Response to the Digital Economy’s Direct Tax Challenges, Part 1, 44 Obiter (2023), https://doi.org/10.17159/obiter.v44i2.14461.
2. African Tax Administration Forum, Suggested Approach to Drafting Digital Services Tax Legislation (2020).
3. Income Tax Act, Cap. 332 R.E. 2023, §§ 86–93, 116 (Tanz.) [hereinafter ITA].
4. Value Added Tax Act, Cap. 148 R.E. 2023, §§ 51, 68 (Tanz.) [hereinafter VAT Act].
5. Tax Administration Act, Cap. 438 R.E. 2023, §§ 22–23, 46 (Tanz.) [hereinafter TAA].
6. Law Reform Commission of Tanzania, Report on the Introduction of a Legal Framework on Electronic Commerce and Cyber Crimes 1–7 (2006) [hereinafter LRCT Report].
7. ITA, supra note 3, §§ 86–93.
8. Id. § 116(1)–(2).
9. VAT Act, supra note 4, § 51(1)(c), (2). Section 51(2) was renumbered as section 51(4) by the Finance Act, 2026, No. 2 of 2026, § 94 (Tanz.), with effect from July 1, 2026.
10. VAT Act, supra note 4, § 68(1)–(5) (formerly section 64; subsection (5) was inserted by the Finance Act, 2022, No. 5 of 2022, § 125 (Tanz.)).
11. TAA, supra note 5, §§ 22–23.
12. Id. § 46(1)–(3).
13. Tax Administration (General) (Amendment) Regulations, 2026, G.N. No. 158G of 2026, reg. 2 (Tanz.) (inserting regulation 58(2) into the Tax Administration (General) Regulations, 2016, G.N. No. 101 of 2016), https://www.tra.go.tz/images/uploads/acts/GN_158G-AMENDMENT_OF_THE_TAX_ADMINISTRATION_%28GENERAL%29_REGULATIONS%2C_2026-TGPA.pdf [hereinafter 2026 Amendment Regulations].
14. ITA, supra note 3, §§ 86–93.
15. Finance Act, 2023, No. 7 of 2023, §§ 25, 30 (Tanz.) (amending the source rule for electronic services and extending the charge from services rendered through a digital marketplace to any electronic service, now ITA, supra note 3, §§ 89(m), 116); Finance Act, 2022, No. 5 of 2022, § 70 (Tanz.) (introducing the charge, at two per cent, as section 90A).
16. Finance Act, 2026, No. 2 of 2026, §§ 2, 24 (Tanz.), https://www.tra.go.tz/images/uploads/acts/THE_FINANCE_ACT%2C_2026.pdf.
17. VAT Act, supra note 4, § 51(1)(c).
18. Finance Act, 2023, No. 7 of 2023, § 66 (Tanz.) (adding online intermediation and online advertisement services); Finance Act, 2024, No. 6 of 2024, §§ 102, 106 (Tanz.) (defining and adding online data services); Finance Act, 2025, No. 11 of 2025, § 128 (Tanz.) (extending online intermediation to online accommodation marketplaces and payment services platforms).
19. VAT Act, supra note 4, § 68(5); Finance Act, 2022, No. 5 of 2022, § 125 (Tanz.).
20. Finance Act, 2025, No. 11 of 2025, § 124 (Tanz.) (inserting section 5(6) of the VAT Act, in operation from September 1, 2025).
21. Finance Act, 2026, No. 2 of 2026, § 94 (Tanz.).
22. TAA, supra note 5, §§ 22–26, 42–46, 51–55, 57–60, 65–80.
23. 2026 Amendment Regulations, supra note 13, reg. 2.
24. Id. regs. 1, 2(a).
25. Finance Act, 2024, No. 6 of 2024, §§ 2, 33, 41, 46 (Tanz.) (defining digital content, digital content creator and digital asset, and providing for withholding at five per cent on payments to resident digital content creators and at three per cent on payments for the exchange or transfer of digital assets).
26. Finance Act, 2025, No. 11 of 2025, §§ 107–108, 124, 128 (Tanz.).
27. Electronic Transactions Act, Cap. 442 R.E. 2023 (Tanz.).
28. National Payment Systems Act, Cap. 437 R.E. 2023 (Tanz.) [hereinafter NPSA].
29. Id. § 3.
30. Id. § 4.
31. NPSA, supra note 28, §§ 5–7.
32. Id. §§ 15–16.
33. Id. §§ 24–35.
34. NPSA, supra note 28, §§ 43–46.
35. Id. §§ 45, 48.
36. NPSA, supra note 28, § 55.
37. Payment Systems (Licensing and Approval) Regulations, 2015, reg. 6 (Tanz.) [hereinafter PSLA Regulations].
38. Id. regs. 40–42.
39. Id. regs. 45–46.
40. Bank of Tanzania, Tanzania Quick Response Code Standard (TANQR Code Standard 2022): Merchant-Presented Mode 1–2 (version 1.0, Aug. 12, 2022), https://www.bot.go.tz/Publications/Acts,%20Regulations,%20Circulars,%20Guidelines/Guidelines/en/2022081908570183.pdf [hereinafter TANQR Standard].
41. Id. at 5–18.
42. Id. annex 1, at 20–22; see also PSLA Regulations, supra note 37, regs. 40–42.
43. See S.S.A. Kessy, Electronic Payment and Revenue Collection in Local Government Authorities in Tanzania: Evidence from Kinondoni Municipality, 9 Tanzanian Econ. Rev. 89 (2019), https://doi.org/10.56279/ter.v9i2.47 (finding that electronic payment improved tax compliance and the monitoring of revenue sources).
44. See generally Helen B. Kiunsi, Watching the Watcher: Evaluating the Tanzania Revenue Authority in Its Administration of Tax, 28 Huria J. Open Univ. Tanz. (2021), https://doi.org/10.61538/huria.v28i1.973.
45. NPSA, supra note 28, §§ 4, 15, 24, 44.
46. LRCT Report, supra note 6, at 20, 26, 35, 78.
47. See Eva Komba, Protection of Taxpayers’ Rights in Tanzania Vis-à-Vis Powers of the Commissioner General to Make Tax Assessment, 2 J. Afr. L. & Contemp. Legal Issues 68 (2024), https://doi.org/10.58548/2024jalcli21.6877 (finding that, absent safeguards, the Commissioner General’s assessment powers can infringe taxpayers’ rights, including the right to privacy).
48. See Chris Noonan & Victoria Plekhanova, Taxation of Digital Services Under Trade Agreements, 23 J. Int’l Econ. L. 1015 (2020), https://doi.org/10.1093/jiel/jgaa031; cf. Karishma Banga, Alexander Beyleveld & Martin Luther Munu, Trading Away Tax Sovereignty? How Trade Rules Shape Taxation of the Digital Economy in Africa, 28 J. Int’l Econ. L. 43 (2025), https://doi.org/10.1093/jiel/jgaf004.
49. See Kaanael Simon Mbise & Lukundo Baseka, The Impact of the Digital Tax Administration System on Compliance Among SMEs, 2 J. Informatics (2022), https://doi.org/10.59645/tji.v2i1.94 (study of small and medium enterprises at the TRA’s Tanga regional office).