ZANZIBAR’S newly approved 2025/2026 budget has sparked mixed reactions within the business community, with importers and trade bodies urging the government to revisit proposed tax increases.

They warn that steep tax hikes could disrupt trade and inflate consumer prices. During a budget review session organised by international consultancy firm Ernst & Young (EY), private sector stakeholders voiced concern over sharp hikes in excise duties on essential imports, including poultry, fish, beverages and plastic products.

Many warned that the new measures risk undermining business stability and could trigger a ripple effect on the cost of living.

During a budget analysis session, some importers raised concerns over the newly announced tax rates, saying that while they respect the Ministry of Finance’s decisions, they would welcome revisions aimed at easing commercial pressure.

One importer, Mr Christopher ‘ZanChick’, warned that the continued rise in import duties on poultry could significantly push up prices in the tourism sector.

He noted that hotels still rely on imported chicken because local producers “cannot meet demand or international quality standards.”

Mr Ahmed Suleiman Nassor from the Zanzibar National Chamber of Commerce (ZNCC) welcomed the government’s commitment to protecting local industries, but emphasised the need for more support to help domestic producers scale up and meet quality expectations.

EY Tanzania experts Ms Donald Nsanyiwa and Ms Beatrice Melkiory summarised the budget measures, noting that some new tax adjustments were not included in the Finance Bill, thus indicating room for possible government reconsideration based on stakeholder feedback.

Presenting the budget last week, Minister of State in the President’s Office (Finance and Planning), Dr Saada Mkuya Salum, proposed several measures aimed at raising revenues and strengthening the economy.

These included increasing excise duties to protect local manufacturing.

The House of Representatives approved amendments to the Excise Duty Act No 8 of 2017, including raising the tax on imported chicken and fish.

The duty has been increased from 300/- to 1,000/- per kilogramme, aiming to boost local production, ensure fair market competition and create jobs.

This measure is expected to generate 7.25bn/- in government revenue. The House also approved amendments to the Finance Act No 9 of 2015, introducing new infrastructure levies on imported goods.

These include: 50/- per litre on bottled water; 1,000/- per tray of imported eggs and five percent levy on soft drinks, carbonated juice and non-alcoholic beverages.

One per cent levy on the transportation of goods and five percent levy on the importation of non-woven bags, are other amendments made.

These levies are projected to raise 2.27bn/- to support the Water Fund and improve water services.

To strengthen customs control and boost revenue, the government increased excise duties on alcoholic beverages.

The duty on imported spirits and wine was raised from 4,386/06 to 6,000/- per litre. This is expected to generate 1.25bn/- for the Health Fund.

A new specific excise duty of 28,232/- per kilogramme was also introduced on shisha flavours, aimed at curbing youth consumption.

The government anticipates an additional 1.27bn/- from this measure, which will also support the Health Fund.

The budget also proposed a 1,000/- per kilogramme excise duty on imported sweets, biscuits and chocolates, to reduce their consumption, particularly among children and raise 0.5bn/- for the Health Fund.

To address environmental concerns, a five per cent excise duty on disposable plastic products such as plates, cups and bowls will be introduced.

This aims to reduce plastic waste and is expected to generate 0.547bn/- for the Environmental Fund.

The government will also impose a 15 per cent excise duty on imported vehicles aged five to ten years.

This measure, meant to support climate and environmental goals, is expected to raise 1.27bn/- for the Environmental Fund.

To raise additional revenue, the government also reviewed outdated driver’s license fees: 30,000/- for a one-year license; 45,000/- for two years; 60,000/- for three years and 75,000/- for five years.

These adjustments are expected to raise 2.57bn/-. The government also amended the Petroleum Levy Act No 8 of 2001, raising the road license fee from 38/- to 100/- per litre and the road development levy from 100/- to 200/- per litre of diesel or petrol.

These measures are expected to generate 35.75bn/- to improve road infrastructure. In a further bid to boost revenues, the government revised its customs valuation rates.

Previously set between 20 per cent and 50 per cent, the rates are now increased by 25 per cent.

Targeted products include construction materials (iron bars, cement, nails), tires, alcoholic drinks, wine and vehicles. The move is projected to bring in an additional 37.27bn/-.

The government says these measures will not only increase revenue but also promote domestic production, protect the environment and enhance essential services like water, health and infrastructure development.