| Chargeable Income TZS |
Tax Rate % |
| Upto 170,000 |
0% |
| 170,000 to 360,000 |
11% |
| 360,000 to 540,000 |
20% |
| 540,000 to 720,000 |
25% |
| Over 720,000 |
30% |
Tanzania Income Tax Rate for Individual Tax Payers
| Chargeable Income TZS |
Tax Rate % |
| Upto 170,000 |
0% |
| 170,000 to 360,000 |
12% |
| 360,000 to 540,000 |
20% |
| 540,000 to 720,000 |
25% |
| Over 720,000 |
30% |
The corporate tax rate is 30 percent. Profits after tax are subject to 10 percent withholding tax when distributed as dividend, resulting in an effective tax rate of 37 percent for a profit-making and dividend-distributing business organization.
(i) Directors Fees
Directors? fees will now be subject to a 15% withholding tax.
The motivation for this change is unclear as it had been
understood that such payments were already subject to a 30%
withholding as tax on secondary employment income.
(ii) Aircraft lease rental
Withholding tax exemption on payments made by air transporters
to non-resident persons in respect of aircraft lease rental has
been abolished. As per Last year's Finance Act the withholding
tax rate on rental of assets from a non-resident person to 10%.
Capital gains realised on the disposal of business and investment assets in Tanzania are subject to tax at the rate of 30% for corporations, and the graduated rates for individuals.
In the case of gains arising due to the disposal of an interest in land and/or buildings situated within Tanzania, a single installment of tax is due at the point of disposal, which is computed as 10% of the gain in the case of a resident person and 20% of the gain in the case of a non-resident person. A tax credit may be claimed, through the annual tax return, for this upfront installment amount paid.
Value Added Tax (?VAT?) is levied at a standard rate of 18% on the supply of goods and services in the mainland, Tanzania, and on the importation of vatable goods or services from any place outside the mainland, Tanzania. VAT is 0% on zero-rated goods and 10% on special relief.
Stamp duty is levied on a wide range of instruments and
documents. The rates of duty vary according to the nature of the
instrument or document. Agreements for the sale of shares, for
example, attract stamp duty computed as 1% of the value of the
shares and stamp duty on rental agreements is 1% of annual rent.
Imported goods are liable to customs duty at the point of entry into Tanzania, at the rates published in the East African Community (EAC) Common External Tariff. A wide range of goods - mainly raw materials and capital goods - qualify for a nil rate, while intermediary and finished goods will incur customs duty of 0% - 25%, depending on their nature. Goods originating in Southern African Developing Countries (SADC) or the EAC have preferential customs duty rates. Imported goods are also subject to a 0.6% destination inspection fee.
Skills and development levy - 5% of gross cash remuneration,
except for farm workers. This is an employer tax;
A ?service levy? of up to 0.3% is charged by local
authorities on the total turnover of enterprises based
within their territorial boundaries (payable either monthly
or quarterly depending on the requirements of each local
authority); and
Excise duty is payable on a range of goods and services such
as tobacco, alcohol, petroleum products, motor vehicles,
carbonated drinks. Excise Duties are applied on mobile
phones, airtime electronic communication service, money
transfer through a bank, a financial institution or
telecommunication company, telecommunication SIM cards and
satellite television services.
Tax Year 1 January to 31 December
Tax Return due date Tax returns must be filed between 1 January and 30 June