The Tanzanian government has introduced a range of incentives aimed at accelerating the adoption of electric vehicles (EVs) and compressed natural gas (CNG)-powered vehicles across the country.

The measures were unveiled on June 11, 2026, during the presentation of the 2026/27 budget proposals in Parliament.

As part of the initiative, the government has directed public institutions to prioritize the procurement of electric and gas-powered vehicles in their plans and budgets. According to the government, the objective is to reduce operating costs and lessen dependence on imported petroleum products.

Among the new measures is a Value Added Tax (VAT) exemption on imported equipment used in electric vehicle charging stations, classified under HS Code 8504.40.00.

The government has also retained several existing incentives, including excise duty exemptions based on engine capacity for vehicles powered by electricity and gas, as well as VAT exemptions on compressed natural gas (CNG) used in vehicles.

Additional incentives include VAT exemptions on equipment used to convert petrol- and diesel-powered vehicles to gas or electric systems. The exemptions also apply to CNG distribution equipment, including compressors, metering equipment, storage cascades, specialized transportation vehicles, and dispensers, as well as throughout the entire CNG production chain.

Furthermore, the government will continue to exempt VAT on the importation of raw materials used in the manufacture of gas cylinders for various applications, including motor vehicles. Import duty relief will also remain in place for lithium-ion batteries used in the assembly and manufacture of electric vehicles and motorcycles.

Tanzania currently spends more than USD 5 billion annually on fuel imports. The government’s gradual shift toward electric and CNG-powered transportation is expected to reduce exposure to global energy market disruptions and strengthen the country’s energy security amid changing geopolitical dynamics.