thecitizen.co.tz·4 min read·hard
Taxing retained earnings: Align CFC provisions with deeming distribution provisions
✦AI Summary
Tanzania has amended its 'deeming distribution' tax provisions in the Finance Act 2026, reducing the tax base on undistributed profits from 30 percent to 15 percent. The move aims to balance the need to prevent revenue leakage with the desire to encourage business growth through retained earnings.
Many scholars argue that the strength of an entity is measured by what it retains, not just what it earns. This assertion underscores the importance of retained earnings (RE) to the business community.
economybusiness
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