Tanzania

Cryptocurrencies in Tanzania are legally recognized as "digital assets" under the Finance Act 2024, which became effective on July 1, 2024. While the Bank of Tanzania has previously issued warnings and does not consider crypto as legal tender, the introduction of a tax framework indicates a practical tolerance for holding and trading these assets. The Tanzania Revenue Authority (TRA) is the governing body for crypto taxation, operating under the provisions of the Finance Act 2024. This Act broadly defines digital assets to include cryptocurrencies and NFTs. For individuals, a new 3% withholding tax is applied to payments received from digital asset transfers or exchanges, especially when these transactions are facilitated by non-resident platforms to Tanzanian residents. Beyond this, any profits generated from selling or exchanging cryptocurrencies are subject to capital gains tax, which falls under the general progressive income tax framework, potentially reaching up to 30%. Crypto received as income, such as rewards or salary, is also treated as ordinary income and taxed progressively up to 30%. Businesses involved in crypto activities face the standard corporate tax rate of 30% on their declared income. Tanzania does not currently offer any reduced tax rates or benefits for long-term cryptocurrency holdings. Mining operations are treated as business income and are subject to either corporate or personal income tax rates depending on the entity. Staking rewards are taxed as ordinary income at the point of receipt. Non-fungible tokens (NFTs) are explicitly included in the definition of digital assets and are therefore subject to the 3% withholding tax upon transfer or exchange. Both converting cryptocurrencies to fiat currency and swapping one cryptocurrency for another are considered taxable events, incurring capital gains tax on any profits and the 3% withholding tax on the transfer. There is no official guidance available concerning decentralized finance (DeFi) activities.