In a decisive move to strengthen the Tanzanian Shilling (TZS) and regulate currency usage within its borders, the Tanzanian government has introduced the Foreign Exchange Use Regulations, GN. No. 198 of 2025. Effective from 28 March 2025, these regulations mandate that all transactions within the country be conducted exclusively in Tanzanian Shillings, impacting both individuals and businesses nationwide.
The newly enacted regulations encompass all individuals and companies operating in Tanzania, explicitly covering transactions conducted domestically. The term ‘transaction’ is comprehensively defined to include quoting, advertising, specifying, publishing, pricing, paying, or receiving payment for goods or services within the country. This broad definition ensures that all forms of economic activities adhere to the stipulated currency usage.
A cornerstone of the regulations is the requirement that all prices for goods and services be displayed in Tanzanian Shilling (TZS). Businesses are prohibited from quoting, advertising, specifying, or publishing prices in foreign currencies. Furthermore, facilitating or mandating payments in foreign currencies for domestic transactions is strictly forbidden. This measure aims to reinforce the prominence of the Tanzanian Shilling in everyday commerce and reduce reliance on foreign currencies.
Despite the blanket restriction on foreign currency use, the regulations allow specific exemptions for certain transactions. According to the Schedule attached to the regulations, government payments for membership fees to regional institutions within Tanzania will still be permitted in foreign currencies.
Additionally, transactions involving embassies and international organizations operating in the country are exempt from the rule. Commercial banks and financial institutions can continue issuing foreign currency loans, while duty-free shops are also allowed to accept payments in foreign currencies.
These specified exceptions acknowledge the practical necessities of certain international dealings while maintaining the overall objective of promoting the national currency.
Contracts that were established in foreign currencies prior to the enactment of these regulations are required to be amended to comply with the new rules. Parties have a grace period of one year from 28 March 2025 to make the necessary adjustments. This transitional provision allows businesses and individuals adequate time to align their contractual agreements with the legal requirements.
The hospitality industry, particularly hotels catering to international guests, faces notable implications under the new regulations. For local residents booking from within Tanzania, billing must be conducted in Tanzanian Shillings. However, for foreign guests booking from abroad, it is permissible to process payments in foreign currencies at the time of booking. This nuanced approach seeks to balance the facilitation of international tourism with the promotion of the national currency.
Non-adherence to the Foreign Exchange Use Regulations may result in legal repercussions. While the specific penalties are not detailed in the available information, businesses and individuals are advised to comply promptly to avoid potential sanctions. Ensuring adherence not only aligns with legal obligations but also supports the broader economic objective of stabilizing and strengthening the Tanzanian Shilling.
The introduction of these regulations is rooted in amendments made by the Finance Act of 2024 to the Bank of Tanzania Act. The amendment, specifically section 26(2), criminalizes the use of any currency other than the Tanzanian Shilling for domestic transactions. This legislative change underscores the government’s commitment to reinforcing the national currency’s role and mitigating the economic risks associated with the widespread use of foreign currencies in local transactions.
As of now, specific statements from Tanzanian government officials regarding the implementation and enforcement of these regulations have not been prominently featured in public communications. Businesses and individuals are encouraged to consult official publications and legal advisories to fully understand the implications and ensure compliance.
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