The Government has clarified the criteria used in collecting Property Tax through the electricity prepayment system (LUKU), saying the approach is designed to simplify tax collection, improve efficiency, and strengthen domestic revenue mobilisation.
The clarification was made in Parliament in Dodoma by the Deputy Minister for Finance, Laurent Luswetula, when responding to a question from Special Seats Member of Parliament Tinnar Andrew Chenge, who sought to understand the basis used in charging Property Tax through the LUKU system.
Deputy Minister Luswetula explained that the Government currently applies fixed annual and monthly rates depending on the type of building, making the system easier for both taxpayers and authorities to manage.
He said ordinary residential houses are charged TZS 18,000 per year, equivalent to TZS 1,500 per month, while multi-storey buildings are charged TZS 90,000 per floor per year, or TZS 7,500 per floor per month.
He noted that the use of standardised rates is intended to reduce complexity in tax assessment and improve compliance, especially as payments are collected through the widely used LUKU platform.
Luswetula further explained that certain categories of buildings are exempted from Property Tax. These include grass-thatched houses, mud houses, places of worship, and public service buildings.
He also said residential houses occupied by elderly citizens aged 60 years and above are exempted, unless they are used for commercial activities.
He said the exemption framework is part of the Government’s effort to ensure fairness in the tax system and protect vulnerable groups while maintaining a sustainable revenue base for development projects.
According to the Government, integrating Property Tax into the LUKU system is part of broader reforms aimed at improving efficiency in revenue collection, reducing administrative costs, and minimizing revenue leakages at local government level.
The system also allows citizens to pay their property tax conveniently alongside electricity purchases, reducing the need for separate payment processes and improving overall compliance.
The Government reaffirmed its commitment to continue strengthening tax administration systems to ensure they remain simple, transparent, and supportive of national development goals while easing the burden on citizens.
