Tanzania VAT Explained (18%)
Value Added Tax (VAT) in Tanzania is 18% on most goods and services. This guide explains how to add VAT to a price, how to work out the VAT included in a price, and when VAT applies.
The short answer: Tanzania's standard VAT rate is 18%. To add VAT, multiply the net price by 1.18; to remove it from a gross price, divide by 1.18 rather than subtracting 18%. Reverse VAT is a separate mechanism, not the same as removing VAT.
Filed under Business & VAT
Maintained by David M at Delta Tech Solutions · Figures last checked 19 October 2026 · Next check due 19 April 2027
Content updated 21 October 2026
Tanzania VAT Calculator
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The 18% standard rate
Tanzania's standard VAT rate is 18%, applied to most taxable goods and services. There are also zero-rated and exempt supplies, but the general rate for everyday transactions is 18%. A trader who is registered for VAT charges it on top of the price of a taxable supply and accounts for it to the Tanzania Revenue Authority.
| Net price (TZS) | VAT at 18% (TZS) | Gross price (TZS) |
|---|---|---|
| 100,000 | 18,000 | 118,000 |
| 500,000 | 90,000 | 590,000 |
| 1,000,000 | 180,000 | 1,180,000 |
Adding VAT to a price
To add VAT to a price that excludes VAT, multiply by 1.18, which is the same as adding 18%. A price of 100,000 TZS before VAT becomes 118,000 TZS including it, and the VAT element is the 18,000 TZS difference. Multiplying by 1.18 is the version to remember, because it works at any price without a separate addition step.
Working out VAT already included
A price that already includes VAT has to be taken apart in the other direction: divide the total by 1.18 to reach the pre-VAT amount, then subtract. A 118,000 TZS gross price is a 100,000 TZS base plus 18,000 TZS of VAT. This is the calculation most people actually need, because shop prices and quotes are usually quoted gross.
Why removing VAT is not subtracting 18%
The commonest error with VAT is subtracting 18% from a gross price. On a 118,000 TZS total that gives 96,760 TZS, which is wrong: the VAT was charged on the 100,000 TZS base, not on the gross figure. The correct reverse operation is the division, because the gross total is 118% of the base rather than the base being 82% of the total.
Zero-rated and exempt supplies
Not every price carries 18%. Some supplies are zero-rated, which means they are taxable in principle at 0% and exports of goods and services fall here; others are exempt, which means VAT is not charged at all. The distinction matters to a registered business because it affects what input VAT can be reclaimed, so a transaction that looks like a plain sale may not be one.
18% added, and 18% taken back out
An item priced 100,000 TZS excl. VAT plus 18% is 118,000 TZS, with 18,000 TZS VAT. A 118,000 TZS gross price is 100,000 TZS excl. VAT, with 18,000 TZS VAT. Use the calculator below to check any price.
Joseph runs a hardware shop in Mbeya and quotes most customers a price that already includes VAT. Reading a supplier quote back to its pre-VAT figure is the reverse problem, and the one that catches people out.
When you must register for VAT
Registration is required once taxable turnover passes the threshold set in the VAT Act. The current threshold, the registration forms and the process are on TRA's VAT pages; confirm them before you charge VAT. Once registered, you charge VAT on taxable supplies, issue a VAT invoice and account for the tax to TRA. Registering late does not remove the liability for tax you should have charged.
Input VAT and what a registered business can reclaim
A registered business can generally reclaim VAT paid on purchases used to make taxable supplies, but not on purchases used to make exempt supplies. That is why the zero-rated/exempt distinction matters: zero-rated supplies still allow input VAT recovery, while exempt supplies usually do not. Keep the VAT invoices and the records that link each purchase to the supply it supports; a claim without the invoice is the first thing an audit asks for.
What reverse VAT means, and what it does not
Reverse VAT — a reverse charge — is not the same operation as removing VAT from a gross price. Removing VAT is arithmetic on a price that already includes it. A reverse charge shifts the obligation to account for VAT onto the buyer for certain transactions, often imported services. This guide and the calculator do not apply a reverse charge; if a supplier or an import is subject to one, confirm the treatment with TRA or your tax adviser rather than using the remove-VAT result.
Results are estimates provided for information only and do not constitute financial, legal or tax advice. Consult a qualified professional before making financial decisions.
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Tanzania VAT Explained (18%) FAQs
What is the difference between zero-rated and exempt?
A zero-rated supply is taxable at 0%, which is how exports are treated. An exempt supply is outside VAT altogether. The difference decides how much input VAT a registered business can reclaim, so it is worth getting right.
How do I add 18% VAT to a price?
Multiply the pre-VAT amount by 1.18. For example, 100,000 TZS becomes 118,000 TZS including VAT.
Is subtracting 18% the same as removing VAT?
No. Subtracting 18% from a gross price removes more than the VAT, because the VAT was charged on the smaller pre-VAT base. Divide by 1.18 instead.
Do all goods and services carry 18%?
No. Some supplies are zero-rated at 0% and some are exempt, so the 18% standard rate applies to most everyday taxable transactions rather than to everything.