Finance Act 2023: Changes in the SDL Rate and Non-Filing of SDL Returns

The Finance Act 2023 introduces key changes to the Vocational Education and Training Act, Cap 82, with the goal of reducing employer costs and streamlining compliance processes. Two major updates include a reduction in the Skills and Development Levy (SDL) rate and adjustments to the filing obligations for certain employers.

Reduction in SDL Rate

The SDL rate has been reduced from 4% to 3.5%. This change aligns with the government’s commitment to gradually lower operational costs for employers. The reduction aims to ease the financial burden on businesses, promoting growth and supporting job creation in various sectors

Elimination of Filing Requirements for Non-Liable Employers

Another significant amendment removes the requirement for employers who are not liable to pay SDL to file monthly SDL returns with the Tanzania Revenue Authority (TRA). This adjustment is expected to cut down on administrative overheads for businesses that do not fall under the SDL obligation, allowing them to focus resources elsewhere.

System Alignment and Implementation

As SDL returns are currently filed online through the taxpayer portal, it will be important for the TRA to update and align its system with these new regulations. Ensuring a smooth transition will be crucial to avoid any potential disruptions or inconveniences for taxpayers as these changes take effect.