The Long-Awaited Use of Foreign Currency Regulations Now Issued
- Prices for all goods and services to be in TZS
- All advertisements or quotations to be made in TZS
- Contracts for all transactions in Tanzania should provide for payments in TZS
- All contracts concluded before these Regulations to be Amended
- Transactions that can use Foreign Currency Provided
The Bank of Tanzania has the sole mandate to issue bank notes and coins in and for Tanzania which is the only legal tender in Tanzania. Under the Bank of Tanzania Act, save as otherwise prescribed by the Minister for Finance (the Minister) in the regulations, a person who transacts using any other currencies other than the legal tender issued by the Bank, commits an offence. In a bid to give more clarification and parameters regarding the application of the above provision and the created offence, on 28 March 2025, the Minister issued the Use of Foreign Currency Regulations, 2025 (the Regulations).
Under the Regulations, prices for all goods or services within Tanzania should be quoted in Tanzanian Shillings (TZS). Besides, all transactions conducted in Tanzania should be in TZS. For this purposes, a person commits a offence if, they require, participate, assist or facilitate in setting the prices for any goods or services in Tanzania by using foreign currency; quote, advert, publish or specify prices for goods or any services in Tanzania by using foreign currency; require or facilitate any payment for goods or services within Tanzania to be made in foreign currency; reject payment for goods or services in Tanzania to be made in TZS; or receive payment for goods or services in Tanzania by using foreign currency. For purposes of these Regulations, “transaction” means quoting, advertising, specifying, publishing or setting price, making or receiving payment for goods or services in Tanzania.
The Regulations, vide the Schedule, provide for transactions in which the use of foreign currency is allowed. These include the government’s contributions to the regional organisations with offices in Tanzania; all transactions involving embassies and international organisations present in Tanzania; foreign currency loans issued by commercial banks in Tanzania; and all payments for goods in duty-free shops. The Minister, in consultation with the Governor of the Bank of Tanzania, has mandate to amend the Schedule by varying the list of transactions that can be carried out in foreign currency.
No person in Tanzania is allowed to enter into contract for goods or services if such contract provides for payment in foreign currency unless such contract falls under the exceptions as provided for under the Schedule to the Regulations. In this regard, all payments to the employees, services or goods procured in Tanzania for purposes of implementing contracts should be made in TZS unless such contracts fall under the excepted transactions. The Regulations provide for a one year grace period for all the contracts for goods or services in Tanzania that allowed the use of foreign currency prior to the coming in force of these Regulations to be amended. Unless the Minister extends the grace period, all contracts that will not have been amended after the grace period shall be void and, therefore, will cease to have effect.
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