Zanzibar passed a TZS 8.52 trillion (±USD 3.28 billion) budget for 2026/27, up 22.11%, targeting 7.5% economic growth, the launch of a Zanzibar stock exchange, and a Skills Development Levy cut to 3%.
Zanzibar’s Minister for Finance and Planning, Dr. Juma Malik Akil, tabled the budget at the House of Representatives in Chukwani, Unguja, on 11 June 2026.
The House of Representatives passed the estimates unanimously on 19 June 2026, with implementation beginning on 1 July 2026.
Budget Size and Revenue Strategy
The TZS 8.52 trillion budget represents a 22.11% increase over the 2025/26 budget of approximately TZS 6.98 trillion (±USD 2.68 billion).
The government expects its dependence on external financing to fall from 4.9% in 2025/26 to 2.8% in 2026/27, driven by reduced donor support and stronger domestic revenue mobilisation.
Revenue is collected through the Zanzibar Revenue Authority (ZRA) and the Tanzania Revenue Authority (TRA), supported by concessional domestic borrowing earmarked for strategic projects.
The government’s revenue strategy centres on policy reforms, strengthened collection systems, expanded digital revenue platforms, and ensuring no revenue is collected outside official channels.
The budget allocates TZS 449.8 billion (±USD 173 million) to gender-responsive development projects.
New salary increases for public servants, set under the scheme of service, will take effect in October 2026 rather than January 2027, brought forward on the directive of President Dr. Hussein Ali Mwinyi to begin after the first quarter of the financial year.
Economic Growth, Tourism and Priority Sectors
Zanzibar’s economy is projected to grow 7.5% in 2026, up from 7.0% in 2025, supported by tourism, domestic revenue, and infrastructure investment.
Tourist arrivals reached 800,968 between July 2025 and March 2026, a 21.9% increase over the same period a year earlier.
The government is prioritising productive sectors, including tourism, agriculture, fisheries, small and medium enterprises, and the blue economy, with an emphasis on diversifying income sources and reducing reliance on tourism alone.
Zanzibar is positioning to benefit from regional events, including the Africa Cup of Nations 2027, expected to lift tourism and investment.
Investor Priorities: Stock Exchange and Financial Services
The government listed the launch of a Zanzibar stock exchange among its priorities for 2026/27, alongside strengthening access to capital and financial services.
It also intends to accelerate the use of electronic systems in revenue collection and broaden financial inclusion through improved banking, insurance, and digital payment services.
The budget emphasises investment in electricity infrastructure, renewable energy, digital technology, and statistical systems to support long-term economic development.
Tax relief on imported raw materials will be extended to small and medium-sized manufacturers that are not registered with the Zanzibar Investment Promotion Authority (ZIPA), a measure the government says is intended to encourage manufacturing investment.
Tax Increases and Reliefs
The Skills Development Levy (SDL) will be reduced from 4% to 3% to support vocational training and youth employment.
Stamp duty on commercial vehicles will be cut by 25%, with payment integrated into the vehicle inspection process.
Tax relief is also proposed for imported wheelchairs, prosthetic limbs, visual and reading aids, white canes, braille equipment, and disability-accessible toilets.
On the revenue side, excise duty on imported beer will rise from TZS 803 to TZS 1,500 per litre, on imported spirits and wine from TZS 6,000 to TZS 7,000 per litre, and on cigarettes from TZS 55,896 to TZS 65,000 per thousand sticks.
Excise duty on wigs, artificial hair, false eyelashes, and artificial nails will rise from 25% to 30%, and on cosmetics from 10% to 15%.
Excise duty on cable television services will align with mainland Tanzania at 7%, up from 5%.
A 10% excise duty will be introduced on tickets for sports stadiums, entertainment venues, and recreational facilities, with electronic ticketing to be implemented.
Excise duty will be introduced on imported vehicles with engines below 1,000cc, and the motorcycle import fee will rise from TZS 30,000 to TZS 50,000.
The air passenger levy will double from TZS 2,000 to TZS 4,000 to fund air transport infrastructure.
Passenger port charges will rise from USD 2 to USD 3 for travel between Zanzibar and mainland Tanzania, and from USD 1 to USD 2 between Unguja and Pemba.
New excise duties will also apply to imported artificial flowers (20%), UV and LED nail-drying machines (20%), and imported sausages (TZS 500 per kilogram).
The government received 475 tax exemption applications, of which 365 met the required criteria, and will establish a joint TRA and ZRA taskforce to monitor exemption use, a clampdown expected to raise TZS 5.72 billion.
Public Debt
As of 31 March 2026, Zanzibar’s public debt stood at TZS 3 trillion (approximately USD 1.15 billion), comprising TZS 2.987 trillion in domestic debt and TZS 14.6 billion in external debt.
The government stated that the debt remains sustainable and that it can continue borrowing to finance productive development projects.
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