Customs Valuation Tanzania: How TRA Sets the Value You Pay Duty On

This guide explains customs valuation Tanzania rules as TRA applies them on the Mainland and in Zanzibar. It covers the six methods, the additions to the price, related-party sales, the CIF and FOB bases, VAT on imports, used vehicles, advance rulings, the review and appeal route, and penalties. A worked example runs a USD 40,000 consignment through every charge.

Who should read this

• Importers of record who sign or authorise the TANCIS declaration and carry the duty if TRA uplifts the value.
• Tanzanian subsidiaries buying from a foreign parent, where the price is set inside the group.
• Manufacturers and distributors paying royalties or licence fees on branded or patented goods.
• Buyers who send moulds, tools or designs to an overseas supplier, because those are assists.
• Used vehicle importers, whose value is set from TRA reference data.
• Finance teams who budget landed cost and need the right base for each charge.

If you are new to the declaration itself, start with our guide to the TANCIS import declaration. This guide assumes the goods are entered for home consumption.

What the law says

Customs valuation in Tanzania is governed by Community law, not a Tanzanian statute. The East African Community Customs Management Act, 2004 (EACCMA), revised 30 June 2019, as published by the Tanzania Revenue Authority (TRA), applies across the Partner States. Section 122 is headed "Determination of value of imported goods liable to ad valorem import duty".

The Kenya Tax Appeals Tribunal quoted the section in Johnwin Investment Limited v Commissioner of Customs (5 May 2023). Where goods are liable to ad valorem duty, "the value of such goods shall be determined in accordance with the Fourth Schedule and import duty shall be paid on that value". The same EACCMA text applies in Tanzania.

The Fourth Schedule follows the WTO Agreement on Customs Valuation. Its paragraph 2(1) provides that "The customs value of imported goods shall be the transaction value". That is the price paid or payable for the goods when sold for export to the Partner State, "adjusted in accordance with the provisions of Paragraph 9". The Tanzania Trade Portal confirms that "Section 122 and the Fourth Schedule of the Act lay down the procedures of determination of the customs value".

Two Tanzanian statutes then build on the customs value. Section 9 of the Value Added Tax Act, Cap. 148 R.E. 2023 sets the VAT base on imports. The Railways Act, Cap. 170, charges the Railway Development Levy on the customs value (F0309).

What is the transaction value, and when must TRA accept it?

The transaction value is the price the buyer paid or must pay the seller for the goods sold for export to Tanzania. It includes payments made to the seller directly and payments made to a third party to satisfy the seller. It is the first method, and TRA must try it before any other.

Paragraph 2(1) attaches conditions. The Kenya Tribunal in Johnwin quoted sub-paragraph (d): "the buyer and seller are not related". The WTO text adds the other usual conditions. There must be no restriction on the buyer's use of the goods beyond legal or area limits. The sale must not depend on a condition whose value cannot be worked out. No part of resale proceeds may go back to the seller unless it is added.

The six methods apply in sequence. The Johnwin Tribunal summarised the interpretative notes: "Method 1 must be attempted first", and "Method 6 can only be applied where all the previous methods are not applicable".

Methods 4 and 5 may be reversed. Article 4 of the WTO Agreement allows this "at the request of the importer". The WCO Brief Guide to the Customs Valuation Agreement explains each method in plain terms.

What gets added to the price paid?

Paragraph 9 of the Fourth Schedule adjusts the price. It mirrors Article 8 of the WTO Agreement, which the WCO guide summarises. Additions apply only where the buyer bears the cost and it is not already in the price.

The WTO Agreement leaves freight and insurance to each member. The EAC includes them, so the Tanzanian customs value is a CIF value. TRA's Taxes and Duties at a Glance 2025/26 charges the levy on "Customs Value" at "2% of CIF". Costs after arrival, such as inland haulage from the port, are not part of the value if shown separately.

Royalties need the most care. The WTO text adds royalties "related to the goods being valued that the buyer must pay" as a condition of sale. A fee for the patented design of the part usually qualifies; a service franchise fee does not.

How does the related-party test work?

A relationship between buyer and seller does not by itself defeat the transaction value. Under Article 1.2(a) of the WTO Agreement, the value "shall be accepted provided that the relationship did not influence the price". The importer can show this in two ways.

• Circumstances of sale. The price was set the way the seller prices for unrelated buyers, or it covers costs plus a normal group profit.
• Test values. The price closely approximates an accepted value for identical or similar goods sold to unrelated buyers, or a deductive or computed value.

Tanzanian groups face two tests at once: section 33 of the Income Tax Act for income tax, and the Fourth Schedule for customs. A year-end transfer pricing adjustment that raises the price of goods can reopen the customs value of every entry in the year. Our guide to transfer pricing and related-party compliance explains the income tax file.

When can TRA reject the declared value?

TRA may question any declared value. Article 17 of the WTO Agreement preserves the right of Customs "to satisfy themselves as to the truth or accuracy of any statement". The officer issues a query and asks for the contract, payment evidence, freight invoice and supplier price lists.

If the importer cannot support the price, TRA moves to the next method in order. It cannot jump to a convenient figure. Article 7.2 bars values based on, among other things, the selling price in the importing country, minimum values, and "arbitrary or fictitious values".

TRA keeps reference data from earlier entries and uses it to flag low declarations. In Zatra's experience, an uplift letter often cites a value for similar goods without naming the comparison entries. PwC Kenya (August 2021) reports a Kenyan ruling on the same EACCMA text. In Wallpaper Kenya, the Tribunal rejected an uplift based on goods from China and Italy when the importer's goods came from Belgium. Quality and origin matter when goods are said to be similar.

Undervaluation can also surface years later through post-clearance audit. In Sunshare Investment Limited v Commissioner General (Court of Appeal, 4 July 2025), TRA audited imports from 2012 to 2016. It found under-declaration from the foreign suppliers' ledgers and demanded TZS 1,737,624,037.55. The Board largely upheld it, and the Court struck out the further appeal.

Why is duty on CIF but the processing fee on FOB?

Each charge has its own base. Mixing them up is the most frequent error in landed-cost budgets.

TRA's Glance states the processing fee "is charged at 0.6% of FOB Value for processing customs document for goods entered for home consumption". It states the levy is "Charged based on Customs Value on goods entered for home consumption in Mainland Tanzania". PwC Worldwide Tax Summaries, last reviewed on 9 September 2026, gives the same 2% CIF levy. The levy has exemptions, for example Chapter 30 pharmaceuticals and Fifth Schedule goods (F0310).

The CET band depends on the HS code, not on the value. Many machinery parts fall in the 0% band as capital goods. Our page on import duty, VAT and excise covers classification and excise.

How is VAT on imports calculated?

Section 9 of the VAT Act, Cap. 148 R.E. 2023, makes the value of an import the sum of three items:

• "the value of goods for the purposes of customs duty under the East African Customs Management Act", whether or not duty is payable;
• the customs duty payable on the import;
• "the amount of any tax, levy, fee or fiscal charge other than customs duty and value added tax" payable on the import.

So the Railway Development Levy, the processing fee and any excise sit inside the VAT base (NEW-03-27). Section 8 has TRA collect the VAT "at the time of import". Section 8(4) applies the EACCMA to import VAT as if it were customs duty.

Any uplift to the customs value therefore raises duty, the levy and VAT together. A registered trader can usually claim the import VAT as input tax; the duty, levy and fee remain a cost. PwC reports that VAT deferment on imported capital goods ended on 30 June 2026.

Worked example: a USD 40,000 machine part consignment

A Dar es Salaam manufacturer imports machine parts from an unrelated supplier. The FOB price is USD 40,000. Sea freight is USD 3,000 and insurance USD 400. We assume the parts fall in the 10% CET band (F0305). We use an assumed rate of TZS 2,500 to USD 1; TANCIS applies the customs exchange rate on the day.

Second line: a royalty addition. Now suppose the buyer must also pay the supplier's parent a USD 4,000 licence fee for the patented part design, as a condition of the sale. The fee is not in the invoice price. Under paragraph 9, it is added to the customs value.

The royalty adds USD 1,286.40, or TZS 3,216,000, at entry. About USD 806.40 of that is VAT, which a registered importer can usually recover. The extra duty and levy, USD 480, are a permanent cost.

A royalty paid to a non-resident also attracts 15% withholding tax (F0210), a separate income tax charge. We kept the processing fee on the invoice FOB; confirm whether TRA recomputes it.

How are used vehicles valued?

Used vehicles rarely have a usable transaction value, because auction and dealer prices vary widely. TRA values them from reference data. Its Used Motor Vehicle Valuation System user guide has the user select the vehicle's details. The system then shows the "CIF Value, Duties, Taxes and Fees to be paid".

Treat that figure as an estimate. The officer checks the vehicle, its year and its documents at entry. Age drives excise as well as value. From 1 July 2026, additional excise on aged imported vehicles is 18% for eight to ten years, 35% for more than ten to twenty, and 40% above twenty (F0320). TRA's 2025/26 Glance still shows the older 15% and 30% rates. Our guide to importing used goods and vehicles covers roadworthiness inspection and conformity.

What documents support the value in TANCIS?

Lodge the entry with documents that tell one consistent story about price, freight and insurance. Our import documents pack lists the full set.

File early where you can. Our guide to the pre-arrival declaration explains how lodging before the ship arrives gives time to answer a valuation query.

Can you get an advance ruling on value?

Yes. The Tanzania Trade Portal advance ruling procedure describes a written decision from TRA's Customs and Border Control department, issued before importation. It covers tariff classification, origin, and the valuation method or criteria for a given set of facts.

• Applicant: an importer, exporter, producer, manufacturer or their representative.
• Application: in writing to the Commissioner of Customs, with TIN, product details, intended port and any suggested method.
• Time: Customs aims to rule within 30 days of receiving all information.
• Validity: twelve months from issue.

The portal states no fee or legal basis. A ruling suits a recurring related-party flow or royalty, where one answer covers a year of entries.

How do you challenge a TRA valuation?

The route runs under EACCMA, not the Tax Administration Act. Section 229 is headed "Application for review to Commissioner"; section 230 "Appeals to tax appeals tribunal". In Tanzania the first appeal body is the Tax Revenue Appeals Board (TRAB).

Review within 30 days. In Lakairo Investment Limited v Commissioner General (Court of Appeal, 29 December 2023), the Court applied "the mandatory 30 days" in section 229(1). A late application gave the Commissioner nothing to review. The remedy was an application for extension of time.

Commissioner's decision. The judgment refers to the Commissioner's duty to respond within 30 days of receipt under section 229(4). Counsel argued that section 229(5) deems an application allowed if no decision is made in time. The Court held that section 229(4) applies only to applications filed in time. PwC Kenya reports that the Kenyan Tribunal allowed an application under section 229(5) in Wallpaper Kenya.

Extension of time. In Puma Energy Tanzania Limited v Commissioner General (Court of Appeal, 17 December 2025), TRA did not decide an extension application under section 229(3). The Court quashed the Board and Tribunal decisions and sent the matter back to the Commissioner.

Appeal to the Board. TRAB's appeal procedure page requires a notice of intention to appeal within thirty days, on Form TRB.1. The appeal itself follows within 45 days on Form TRB.2, under section 16 of the Tax Revenue Appeals Act. The Board fees are TZS 10,000 for the notice and TZS 100,000 for the statement of appeal (NEW-02-20). Further appeals go to the Tribunal and then, on points of law only, to the Court of Appeal.

The burden sits with the importer. Sunshare records that under section 18(2) of the Tax Revenue Appeals Act, "the burden to prove that the assessment of tax was wrong is on the appellant". Representation before the Board, the Tribunal and the Court goes to an advocate. Our guide to appealing a TRA assessment covers the Board stage.

What are the penalties for undervaluation?

The extra duty, levy and VAT become payable on any uplift. Beyond that, EACCMA sets its own offences. Section 203 is headed "Offence to make or use false documents". It reaches false declarations and invoices used in an entry. We did not read the operative text of section 203 this session, so we do not state its fine or term here.

The Act also contains seizure and forfeiture powers over goods. Because customs penalties sit in EACCMA, the Tax Administration Act penalty for false statements is not the usual tool for an import entry. Where TRA alleges a false declaration, treat it as a potential offence and involve an advocate before replying.

What is the position in Zanzibar?

Customs is a Union matter. EACCMA, the Fourth Schedule and the CET apply to goods entered in Zanzibar as on the Mainland, and TRA administers customs there. The valuation methods, additions and review route are the same.

VAT is not a Union tax. VAT on imports into Zanzibar falls under Zanzibar law, administered by the Zanzibar Revenue Authority (ZRA). ZRA lists 15% on "Importation of taxable goods and services to Zanzibar" (F0246). TRA's Glance item 10.6 gives the same rate.

Goods cleared in Zanzibar and later moved to the Mainland raise their own VAT questions. Our comparison of Zanzibar and Mainland VAT sets out the differences.

What to do now

1. Map every payment to the supplier. List the invoice price, royalties, tooling, commissions and any later credit notes for each supply chain.
2. Test the paragraph 9 additions. Decide which costs belong in the customs value, and record why the others do not.
3. Check related-party pricing. Align the customs file with the transfer pricing file before year-end adjustments.
4. Use the right base for each charge. Budget duty and the levy on CIF, the processing fee on FOB, and VAT on the section 9 base.
5. Build the document file. Keep contract, invoice, payment proof, freight and insurance papers together for each entry.
6. Consider an advance ruling. Apply before importing where a royalty or group price recurs.
7. Diarise the review deadline. Count 30 days from any uplift decision and file the section 229 review in time.
8. Escalate early. Route a false declaration allegation, seizure or appeal to an advocate at once.

Key dates

How Zatra helps

Zatra reviews an importer's supply contracts, royalty and tooling arrangements, and group pricing against the Fourth Schedule. We prepare the valuation file for TANCIS and the advance ruling application. Where TRA uplifts a value, we draft the section 229 review with the evidence that supports the price.

Our import and export compliance team runs the customs side. Our TRA audit and dispute team handles post-clearance audits and review applications. For duty relief on plant and machinery, see our guide to capital goods duty exemption.

Costs come in two separate buckets. Government charges, including duty, levies, VAT and TRAB fees, are paid at the official rate against the authority's control number. Zatra's professional fee is quoted on its own line and never mixed with them. Zatra prepares and files, but does not decide or guarantee any authority's outcome. Prosecution, seizure, disputes before the Board or the courts, and legal opinions go to an advocate.

Sources and status

Accurate as at 20 October 2026.

• EAC Customs Management Act, 2004, revised 30 June 2019: TRA copy; arrangement of sections read. Accessed 20 Oct 2026.
• Value Added Tax Act, Cap. 148 R.E. 2023: TRAB copy; ss.8 and 9 read. Accessed 20 Oct 2026.
• TRA Taxes and Duties at a Glance 2025/26: TRA, July 2025; items 10, 11, 12 and 17. Accessed 20 Oct 2026.
• Tanzania Trade Portal, advance ruling: TanTrade, 2026. Accessed 20 Oct 2026.
• TRAB, how to appeal: Tax Revenue Appeals Board, 2026. Accessed 20 Oct 2026.
• Lakairo Investment Limited v Commissioner General, Civil Appeal No. 452 of 2021: Court of Appeal, 29 Dec 2023. Accessed 20 Oct 2026.
• WCO Brief Guide to the Customs Valuation Agreement: World Customs Organization, third edition, 1996. Accessed 20 Oct 2026.
• PwC Kenya tax alert on Wallpaper Kenya: PwC, Aug 2021. Accessed 20 Oct 2026.
• Zatra fee register lines F0304, F0305, F0306, F0307, F0309, F0310, F0311, F0312, F0246, NEW-03-27, F0320, F0210, NEW-02-20: fees at 26 Sep 2026. Accessed 20 Oct 2026.

Figures to confirm before you act

• Section 203 penalty: the fine and term for false documents were not read in the operative text this session
• Section 229(5) deemed allowance: how the Tanzanian Board applies it to a late Commissioner decision
• Processing fee base: whether TRA recomputes the 0.6% fee where paragraph 9 additions change the value
• Railway levy in Zanzibar: TRA's Glance describes Mainland home consumption only
• Collector of import VAT in Zanzibar: confirm the paying channel with ZRA and TRA at the port
• Advance ruling fee and legal basis: not published on the Trade Portal
• EACCMA amendments after June 2019: check the EAC Gazette for later changes to the Fourth Schedule
• Exchange rate: the example uses TZS 2,500 to USD 1 for illustration only

This article is general information based on official sources available at the date of publication. It is not legal, tax or financial advice. Laws and notices change. Verify with the issuing authority or consult Zatra before acting.