Tanzania’s new regulations on foreign currency usage

The Minister of Finance has issued the long-anticipated regulations on usage of foreign currency in Tanzania, GN 198 of 2025 effective as of 28 March 2025. These regulations follow amendments introduced in the Finance Act of 2024 which introduced an amendment to the Bank of Tanzania Act which sought to reinforce the use of Tanzanian Shillings (TZS) for domestic transactions by prohibiting use of foreign currency in local transactions.

Summary of key provisions

• All goods and services must be priced and transacted in TZS.
• Publishing prices, invoicing, or demanding payment in foreign currency is prohibited.
• Refusing to accept TZS for payment is an offense.
• Contracts for goods and services in Tanzania must be in TZS, unless they fall under specified exceptions.
• Existing contracts denominated in foreign currency must be amended within 12 months to comply. Otherwise, they become void unless an extension is granted by the Minister of Finance, and such extension may not exceed the existing tenure of the contracts.

Exceptions

The regulations allow some transactions to be conducted in foreign currency, including:

• Payments by the Government of Tanzania to regional organisations that are in Tanzania.
• Transactions involving diplomatic missions and "international organisations". The Kiswahili text of the legislation seemingly creates an ambiguity on what constitutes “international organisations” – one could say "international corporation" or "multinational company", although I the exemption should probably be construed as international organisations linked to diplomatic missions.
• Foreign currency loans issued by local banks and financial institutions.
• Purchases at duty-free shops.

Implications for Businesses

Businesses with foreign investors, international suppliers, or foreign-denominated contracts, must now reassess their pricing, invoicing, and contractual arrangements to comply with the regulations.

What actions can businesses take?

• Review and amend contracts. Any existing contracts denominated in foreign currency must be renegotiated into TZS within the next 12 months.
• Reassess pricing and payment structures. Businesses that previously quoted prices in USD must adjust to TZS pricing.
• Formulate strategy to communicate these changes early to your customers, suppliers and investors in order to manage disruptions.
• Seek regulatory guidance from your legal, finance and tax advisors and formulate solutions around the guidance.

At Clyde & Co Tanzania, we regularly advise clients on regulatory compliance and tax matters. If you have concerns about how these regulations impact you, feel free to reach out to Peter Kasanda or Imani Mselle for guidance.