Dodoma. The government of Tanzania has clarified the criteria utilized to levy property taxes through the electricity purchases using the prepaid electricity metering system (LUKU).
Addressing the Parliament on June 5, 2026, the Deputy Minister for Finance, Laurent Luswetula, said the approach is designed to streamline revenue collection and enhance internal revenue management.
He was responding to an inquiry from Special Seats Member of Parliament, Tinnar Andrew Chenge, who sought clarification on the specific benchmarks used to assess property tax through utility meters.
“At present, the government utilizes standardized flat rates to levy property tax through the LUKU electricity metering system,” Mr Luswetula said.
He added that the criteria applied for charging property tax via LUKU specify that an ordinary house is charged Sh18,000 per year, or Sh1,500 per month.
A multi-storey building is charged Sh90,000 per floor annually, which equates to Sh7,500 per floor per month.
The strategy of linking property tax to electricity infrastructure represents the latest phase in Tanzania’s lengthy domestic revenue reform history.
Prior to 2008, property taxes were entirely decentralized and managed by Local Government Authorities.
The system shifted to a centralized model under the Tanzania Revenue Authority between 2008 and 2014, was briefly decentralized again, and then returned to the revenue authority in 2016.
The pivotal shift to the Luku system occurred following amendments to the Local Government Authority Tax Act during the 2021/2022 budget session, aiming to eliminate collection leakages and broaden the tax base.
To protect vulnerable citizens and key social sectors, the legal framework incorporates specific statutory exemptions.
Mud-walled dwellings, thatched-roof houses, public utility structures, and places of worship are entirely exempt from the property tax.
Furthermore, residential properties occupied by senior citizens aged 60 and above are excluded from the levy, provided that these properties are not utilized for commercial activities.
“This arrangement aims to ensure that the tax collection system remains simple, efficient, and considerate of specific groups entitled to statutory exemptions according to the law,” Mr Luswetula added.
During the same parliamentary sitting, Mr Luswetula also addressed agricultural sector reforms in response to a question from Ilemela Member of Parliament, Kafiti William Kafiti.
The MP questioned when the government would finalize regulations to provide robust insurance safeguards for farmers and diverse crop yields.
Mr Luswetula said the ministry of Finance is actively conducting research and structural improvements within the agricultural insurance sector to create an inclusive, legally binding framework.
“The government is continuing its research regarding insurance across the agricultural value chain, encompassing crops, livestock, forestry, and fisheries, in order to, among other objectives, establish regulations that attract investment in agricultural insurance and create an enabling environment for farmers to obtain insurance services easily and promptly,” Mr Luswetula explained.
Mr Luswetula further noted that the government intends to ensure that these regulations are farmer-friendly whilst simultaneously stimulating private sector participation in the provision of agricultural insurance services in the country.
The state plans to maintain active cooperation with all insurance sector stakeholders to guarantee that the unfolding framework remains sustainable and broadly beneficial to the Tanzanian agricultural workforce.
