Taxes in Tanzania

Taxpayers generally obtain a Taxpayer Identification Number (TIN) before starting a tax-relevant activity or using a tax procedure. The TRA's Integrated Domestic Revenue Administration System (IDRAS) supports electronic registration, filing, payment and withholding certificates on Mainland Tanzania. Businesses may also need an Electronic Fiscal Device (EFD) or another approved fiscal-receipt system connected with the Electronic Fiscal Device Management System (EFDMS). Zanzibar uses separate ZRA procedures and tax rules, although many concepts are similar. The TRA administers Mainland and Union taxes, including income tax, Value Added Tax (VAT), customs, excise duty, Pay As You Earn (PAYE) and Withholding Tax (WHT). The ZRA administers Zanzibar taxes and VAT. The Ministry of Finance develops tax policy through legislation such as the annual Finance Act, while the Commissioner General handles registrations, rulings, assessments and refunds. Local Government Authorities administer local revenue such as Service Levy and, from the Finance Act 2026, Property Rates. Customs operates within the East African Community Customs Union framework. The main taxes include personal income tax, corporate income tax, WHT, VAT, excise duty, customs duty, Digital Service Tax (DST), Skills Development Levy (SDL), Workers Compensation Fund contributions, stamp duty, Property Rates, Service Levy, fuel and railway levies, Industrial Development Levy, gaming tax and tax-related natural-resource or mining charges. A business licence, a local fee or a social-security contribution is not automatically a tax; it belongs in the tax analysis only when it has a direct revenue or tax function. Tax residence affects which income Tanzania taxes. A resident individual is generally taxed on worldwide income, while a non-resident is generally taxed on Tanzania-source income. Residence commonly depends on a permanent home, at least 183 days in Tanzania, or an average of at least 122 days per year over three years. Non-resident employment income is generally subject to a 15% final rate, while other non-resident income commonly follows a 30% or WHT rate depending on the income type. A foreign-tax credit may be available up to the Tanzania tax on the same income. A double-tax agreement can override domestic treatment when it is in force and applies to the case. Employers usually calculate and remit PAYE for employees. On Mainland Tanzania, the monthly resident employment bands are 0% on income up to TZS 270,000; 8% on the excess from TZS 270,001 to TZS 520,000; TZS 20,000 plus 20% on the excess from TZS 520,001 to TZS 760,000; TZS 68,000 plus 25% on the excess from TZS 760,001 to TZS 1,000,000; and TZS 128,000 plus 30% on income above TZS 1,000,000. An employee with only resident-employer employment income generally does not file a separate annual return, but other income can trigger quarterly SETPI payments and an annual return. Small businesses with annual turnover up to TZS 200,000,000 may fall under the presumptive income-tax regime. The Finance Act 2026 increased the threshold from TZS 100,000,000 to TZS 200,000,000. Turnover from TZS 11,000,000 to TZS 200,000,000 is generally subject to a 4% presumptive rate, subject to the applicable table and record status. A newly registered taxpayer that is exclusively presumptive may receive a 12-month income-tax holiday from TIN registration. A taxpayer below the threshold may instead choose audited financial statements and self-assessment. A resident individual operating a Bajaji may face a fixed presumptive amount of TZS 120,000 per year. Resident companies and permanent establishments of non-resident companies generally pay 30% corporate income tax. A company with perpetual unrelieved losses for the current year and the two preceding years may face alternative minimum tax at 1% of turnover, subject to statutory exceptions including specified agriculture, health, education and tea-processing cases. Certain qualifying investments have reduced rates, such as 25% for a newly listed company on the Dar es Salaam Stock Exchange with at least 25% public ownership for three years, 10% for qualifying new vehicle, tractor or fishing-boat assemblers for five years, and 20% for qualifying new pharmaceutical or leather manufacturers for five years under a government performance agreement. Tanzania generally treats gains from investment-asset disposals within income tax rather than a separate capital-gains tax; the broad rates are often 10% for a resident and 30% for a non-resident. Incentives under SEZ or EPZ programmes require express statutory eligibility. WHT applies to specified payments and may be final or creditable depending on the payment and recipient. Common Mainland reference rates include 10% on dividends, 5% on dividends from a DSE-listed company, 5% for a resident company recipient holding at least 25% of shares or voting rights, 10% on interest, 15% on royalties, 10% for specified film or sound royalties, 5% on resident service fees, 15% on non-resident service fees, 10% on land or building rent, 15% on a non-full-time director's fee, 15% on natural-resource payments, 2% on goods supplied to the Government or a substantially Government-financed institution, 5% on digital-content-creator income and 3% on digital-asset transfers. The payer must issue the relevant certificate and account for the withholding. Mainland VAT is generally 18%, with zero-rating for exports of goods and certain services. A statutory 16% rate applies to specified business-to-consumer purchases paid through a bank or approved electronic method from 1 September 2025, but it is not a general rate for all electronic payments. VAT registration generally applies when taxable turnover exceeds TZS 200,000,000 per year. Professional service providers and Government entities carrying on economic activity can require registration independently of turnover. Non-resident suppliers of electronic services to Tanzanian consumers may use a simplified or representative-based regime without relying on the ordinary threshold. VAT returns and payment are generally due by the 20th day after the tax period. Zanzibar VAT is administered by ZRA under separate legislation. The standard rate is generally 15%, while banking, postal, telecommunications, insurance and digital services are generally subject to 18%. The ordinary registration threshold is generally TZS 100,000,000 per year. The non-resident electronic-services regime became operational from 1 July 2026, with transition arrangements until 1 January 2027. ZRA calendar dates commonly fall around the 20th to 22nd day because weekends and public holidays affect the effective deadline. Designated VAT-withholding agents include the Ministry of Finance, Government entities and persons appointed by the Commissioner General. From the supplier side, the applicable withholding amount is generally 15% for goods and 12% for services, with a 3:2 ratio for mixed supplies. The supplier needs a valid VAT Withholding Certificate to claim the credit or reflect it in the return. Digital intermediaries may be treated as deemed suppliers. Non-resident providers of electronic or digital services consumed in Tanzania generally face DST at 3% of turnover excluding VAT under the Finance Act 2026, with simplified online registration, monthly returns and payment generally due by the 20th of the following month. Employers may owe SDL at 3.5% of gross monthly emoluments when they have at least 10 employees, subject to statutory exclusions for specified institutions, farms and educational activities. Workers Compensation Fund contributions are approximately 0.5% of cash sums in the relevant circumstances. NSSF and PSSSF contributions are social contributions, not income tax. PAYE, WHT and SDL remittances are generally due by the 7th day of the following month. Import taxes depend on the correct customs and tariff classification. Under the EAC Common External Tariff, typical bands are 0% for raw materials, capital goods, agricultural inputs and medicines, 10% for semi-finished goods, 25% for finished consumer goods and 35% for specified goods. A 2% Railway Development Levy on CIF value and a 1% customs processing fee under the Finance Act 2026 may also apply. Excise duty can be specific or ad valorem and covers goods and services such as tobacco, alcohol, beverages, petroleum, vehicles, cosmetics, telecommunications, money transfers and digital satellite television. The applicable rate cannot be determined safely without the product and tariff classification. Businesses must keep books, invoices and fiscal receipts, calculate and remit applicable taxes, and file VAT returns even when the period produces no net VAT. SETPI is generally filed within three months after the start of the accounting period, with income-tax instalments at three, six, nine and twelve months. A final income-tax return is generally due within six months after the period ends, or within nine months for a public-sector taxpayer. A single-instalment transaction generally requires notification within 14 days and payment within 30 days. An accounting period other than the calendar year requires the applicable approval. Payments commonly use a TRA control number or electronic payment method. Late filing or late payment can trigger a penalty generally calculated as the higher of 15 currency points, currently TZS 300,000, or 2.5% of unpaid tax per month. Statutory interest can also accrue at the applicable rate linked to the Bank of Tanzania discount rate and may compound. A taxpayer may apply for a refund under the Tax Administration Act. The Commissioner General generally decides within 90 days; accepted excess may first be offset against other liabilities, with the balance commonly paid within 14 days. VAT refunds require additional eligibility and supporting records and may require an auditor's certificate. A taxpayer who disputes an assessment files a written objection with grounds and evidence. For an assessment, the taxpayer generally pays the tax not in dispute or one-third of the assessed tax, subject to the applicable rule, while the remaining liability is suspended until a final decision. The Commissioner General generally has up to six months after admitting the objection. Further appeal can proceed to the Tax Revenue Appeals Board or another forum under the Tax Revenue Appeals Act. The Tax Ombudsman handles service, procedural and administrative complaints, not the tax decision itself or the objection decision. International cases require separate review of permanent-establishment rules, source rules, WHT, foreign-tax credits, double-tax agreements and mutual-agreement procedures. Related-party transactions must follow the arm's-length principle. The Finance Act 2026 increases the potential transfer-pricing non-compliance penalty to the higher of 30% of the transfer-pricing adjustment or 100% of the tax shortfall. Extractive and construction entities may have electronic disclosure duties for specified contracted-service data. A treaty signature by Oman or Singapore does not by itself prove treaty effectiveness; the agreement's status and entry into force must be checked. EAC, SADC or AfCFTA origin may create preferential customs treatment when the applicable origin rules are satisfied.