ENHANCING COMPLIANCE ON FOREIGN CURRENCY BAN IN TANZANIA

The Government of Tanzania vide the Finance Act, 2024 amended the Bank of Tanzania Act, Cap. 197 by strictly prohibiting the use of foreign currency for domestic transactions in Tanzania.  In reinforcing the use of Tanzania Shillings (TZS), on 28^th March 2025, the Minister of Finance through Government Notice No. 198 published the Foreign Currency Regulations, 2025 (the Regulations).

Key Points under the Regulations

1.      All prices of goods and services must be quoted and paid in Tanzania Shillings (TZS). This requirement applies to all sectors and industries.

2.      Invoicing, publishing or demanding payment in foreign currency is prohibited.

3.      Accepting payment in foreign currency or refusing payment made in Tanzania Shillings constitute an offence.

4.      Specified transactions allowed transacting in foreign currency: (i) Government Contributions to Regional Bodies; (ii) transactions involving embassies and International Organisations; (iii) foreign currency loans from local financial institutions and (iv) purchases from duty free shops.

5.      All contracts of goods and services must quote Tanzania Shillings (TZS) as currency of payment.

6.      Existing contracts in goods and services executed in foreign currency must be modified to Tanzania Shillings (TZS) currency, not later than 27^th March 2026. Extension may be applied to Minister of Finance and extension will not exceed the original contract duration.

7.      Non-compliance of modifying the contracts executed in foreign currency will render the contracts void.

The Regulations aims at reinforcing the Tanzania Shillings (TZS) currency in Tanzania by strictly prohibiting domestic transactions in foreign currency. Eternal Attorneys reminds businesses and service providers to adhere to the requirements of the law so as to avoid unnecessary legal repercussions. We call upon the businesses to review and amend their denominated foreign currency contracts, reassess pricing and payment structures that were previously quoted in USD, and seek regulatory guidance from legal, tax and finance experts with the view of regulatory compliance.

Eternal Attorneys assist clients on regulatory compliance and tax matters. Please reach out to our contacts below should you have any queries on these regulations.

To read the Regulations, click Here.