Unguja. Zanzibar has reduced penalties for businesses that fail to issue electronic receipts, saying the move will make the fines more affordable and improve compliance.
Previously, businesses were fined Sh2 million for each transaction conducted without issuing an electronic receipt. Under amendments to tax administration laws for 2026/27, the fine will now range from Sh200,000 to Sh2 million, depending on the offence.
The changes were announced on August 21, 2026 by Zanzibar Revenue Authority (ZRA) Manager for Information, Public Relations and Customer Services Makame Khamis Moh'd while briefing journalists on amendments to tax laws.
“We reduced the penalty from Sh2 million for each transaction where an electronic receipt was not issued,” he said.
“We have been imposing fines, but they were not paying them. We have therefore given them relief by reducing the fines,” he added.
Makame said ZRA would issue guidelines on how the fines would be applied and place greater emphasis on educating taxpayers to issue electronic receipts voluntarily.
However, the Sh30,000 fine imposed on consumers who fail to demand electronic receipts will remain unchanged.
The tax amendments also cover six other areas, including stamp duty, infrastructure tax, port charges, excise duty and value-added tax (VAT), with the aim of broadening the revenue base and strengthening tax administration.
ZRA has been assigned to collect Sh1.726 trillion in revenue during the 2026/27 financial year.
Makame said the amendments focus on increasing government revenue, expanding the taxpayer base, providing relief in specified areas and strengthening the use of digital systems in tax administration and payment.
Under the VAT Act No. 4 of 1998, ZRA has removed the previous arrangement allowing registered Zanzibar Investment Promotion Authority (ZIPA) investors operating in the tourism and hotel sectors to deduct input VAT arising from imported construction materials.
He said residential housing projects with annual income below Sh200 million would be exempt from VAT, while boarding passes and airline tickets would also be exempt.
Small and medium-sized industrial investors who are not registered with ZIPA will also be exempt from VAT when importing raw materials.
Under the Finance Act 2015 on infrastructure tax, the levy on air passengers has been increased from Sh2,000 to Sh4,000.
The law, however, provides exemptions for people with disabilities. Imports and supplies of assistive devices, including wheelchairs, artificial limbs, visual and reading aids, white canes, Braille machines and specialised toilets, will not be subject to the tax.
Under the Stamp Duty Act No. 7 of 2017, Makame said registration certificates for businesses liable to pay stamp duty would expire 12 months after the date of issuance.
Some traders welcomed the reduction in penalties for failing to issue electronic receipts, saying the previous fines were too high.
“The fine should reflect the offence. Some of the previous penalties felt excessive. We are all human and mistakes happen, but there should be fines that people can afford to pay,” said trader Abubak Haji.
Another trader, Thuleiya Khamis Yasser, said the tax changes and reductions in some taxes would give more businesses an opportunity to comply with their tax obligations.
