Withholding Tax on Treasury Bonds and Bills: Reading the Notice
Where the tax rate is stated, what recent notices say, and how to work out your after-tax return.
Published 12 Oct 2026 · 2 min read
The interest you earn from Government securities may have withholding tax deducted before it reaches you. The rate is not the same for every security, and the place to find it is the Bank of Tanzania tender notice for the auction.
What recent notices say
From the notices stored on UCHUMIKA:
Treasury bills: 10%. For example, the notice for bills auction No. 1208 (notice).
Treasury bonds of 5, 10, 15 and 25 years: 0% (exempt). For example, the notice for bond No. 722 (notice).
These are what the notices state; tax rules can change, and a particular bond's notice is what applies to it. If you are unsure how tax applies to you, ask a tax adviser.
How it changes your return
Bills: the tax applies to the interest, which is the difference between the face value you receive and the price you paid. Example (illustration): you pay TZS 940,000 for TZS 1,000,000 of bills. The interest is TZS 60,000; at 10% the tax is TZS 6,000, so you keep TZS 54,000.
Bonds: the tax, if any, applies to each coupon. With 0% stated, you receive the full coupon.
Your yield after tax
A simple way to compare: after-tax yield ≈ yield × (1 − tax rate). A bill yielding 8% with 10% tax gives about 7.2% after tax. Bills and bonds are taxed differently, so compare after-tax figures when choosing between them.
Where UCHUMIKA shows the rate
The Start investing guide uses the rate from the latest notice of the type you choose.
The bond calculator shows the tax rate used under every result.
This article is for education only and is not investment advice. Examples marked as illustrations are not current rates. Confirm terms in the official Bank of Tanzania notice and speak to a licensed adviser before you invest.