With effect from July 1st, 2020 the following tax and duty rates will be applicable in Tanzania Mainland:
A: INCOME TAX
CORPORATE TAX | ||
| DESCRIPTION | RATES FOR RESIDENTS | RATES FOR NON-RESIDENTS |
| Tax on total corporate income | 30% | 30% |
| Companies making losses for 3 consecutive years (except those dealing in health, education and agricultural sectors) | 0.5% of annual sales | NIL |
| Company newly registered with Dar es Salaam Stock Exchange (DSE) and with public ownership of 30% or above, for the first 3 consecutive years | 25% | 25% |
| Company Newly registered for the purpose of importing plants for assembling vehicles, tractors and outer boat engines. The company must sign operational agreement with the United Republic of Tanzania (URT) for the first 5 years of production. | 10% | NIL |
| New companies operating factories dealing with manufacture of pharmaceuticals or hides, and which have entered into agreement with the URT will enjoy an income tax reduction for the first 5 years of production. | 20% | NIL |
| Companies producing sanitary pads, and which have entered into agreement with the URT will enjoy an income tax reduction for 2 year of production from 1/7/2019 to 30/6/2021 | 25% | NIL |
| Income tax on a branch of a foreign company which has a permanent residency | NIL | 30% |
| Tax on income repatriated by a branch of a company owned by a non-resident | NIL | 10% |
WITHOLDING TAX | ||
| DESCRIPTION | RATES FOR RESIDENTS | RATES FOR NON-RESIDENTS |
| Dividends from companies registered at DSE | 5% | 5% |
| Dividends from a resident company to another resident company in which it holds 25% or more shares | 5% | NIL |
| Dividends from other companies | 10% | 10% |
| Commissions to agents of mobile phones financial services | 10% | NIL |
| Fees, other payments and commissions to bank agents and digital payments | 10% | NIL |
| Interest | 10% | 10% |
| Royalty | 15% | 15% |
| Technical and administrative services (mining and oil & gas) | 5% | 15% |
| Air transport (charter planes for non-residents) | NIL | 5% |
| Income from leasing of land and buildings | 10% | 20% |
| Income from leasing of planes | 10% | 15% |
| Income from other leases | NIL | 15% |
| Cross border transportation | NIL | 5% |
| Insurance fees | NIL | 5% |
| Fees from natural resources | NIL | 15% |
| Service fees | 5% | 15% |
| Director’s fees (nonpermanent directors) | 15% | 15% |
| Income from goods sold to a resident company | 2% of raw sales | Nil |
| Other types of withholding taxes | 15% | 15% |
INCOME FROM SALE OF PROPERTY | ||
| DESCRIPTION | RATES FOR RESIDENTS | RATES FOR NON-RESIDENTS |
| Income from sale of shares, land and buildings (by company or individuals) | 10% | 20% |
| The following transactions are not be taxed (tax exempted) | Income from sale private residential houses that does not exceed 15 million shillings | |
| Income from sale of land for agricultural purposes, with a market value below 10 million shillings | ||
| Sale of shares registered at the DSE and owned by resident or nonresident at less than 25% | ||
LUMPSUM INCOME | ||
| DESCRIPTION | RATES FOR RESIDENTS | RATES FOR NON-RESIDENTS |
| Cross border transportation (for nonresidents and non-permanent airplane charterers) | NIL | 5% |
| Lumpsum income from export of fish, flowers, and vegetables by using foreign airplane (Is exempted from taxation) | NIL | NIL |
INCOME TAX ON INDIVIDUALS WITH EFFECT FROM JULY 1ST 2020 (TZ MAINLAND) | ||
| Income not exceeding Tanzanian Shillings (TZS) 270,000 | NIL | |
| Income above TZS 270,000 but not exceeding TZS 520,000 | 9% of income exceeding TZS 270,000 | |
| Income above TZS 520,000 but not exceeding TZS 760,000 | TZS 22,500 plus 20% of income exceeding TZS 520,000 | |
| Income above TZS 760,000 but not exceeding TZS 1,000,000 | TZS 70,500 plus 25% of income exceeding TZS 7600,000 | |
| Income above TZS 1,000,000 | TZS 130,000 plus 30% of income exceeding TZS 1,000,000 | |
| Income not exceeding Tzs 3,240,000 is not liable to income tax. | ||
| Income of non-residents employed by residents is subjected to a 15% withholding tax. | ||
| Total income to a non-resident individual (earned within country) is taxed at 30%. | ||
| Monthly income includes salary, overtime payments, bonus, commissions and other employment allowances. | ||
| Extra income from extra employment is liable to residents and non-residents is liable to a 30% withholding tax. | ||
DEPRECIATION | ||
| DESCRIPTION | RATES FOR RESIDENTS | RATES FOR NON-RESIDENTS |
| On computers and computer-related gadgets, data machines, self-propelling machines, buses, trucks of capacity exceeding 7 tons, construction and heavy equipment | 37.5% | 37.5% |
DEPRECIATION ALLOWANCE ON RESOURCES (EQUIPMENT) IN MINING AND OIL & GAS | ||
| First year | 20% of the cost | |
| Second year | 20% of the cost | |
| Third year | 20% of the cost | |
| Fourth year | 20% of the cost | |
| Fifth year | 20% of the cost | |
| Depreciation is computed on the basis of the diminishing value of the equipment/item. Depreciation is computed on a straight-line method. |
B: CONSUMER TAXES
| VALUE ADDED TAX (VAT) | |
| Businesses with sales exceeding TZS 100,000,000 must register as VAT payers and obtain VRN (VAT Registration Number) | |
COMPULSORY REGISTRATION | |
| Professional Services liable to VAT are compulsorily registered irrespective of the level of their annual sales. | |
VAT RATES | |
| DESCRIPTION | VAT RATE |
| Goods liable to taxation (Tanzania Mainland) | 18% |
| Importation of goods from outside Tanzania | 18% |
| Export of goods | 0% |
| Transit goods | 0% |
| Goods temporarily stored at the port/airport/bonded warehouses (storage limited to 30 days) | 0% |
| Medical drugs, medical equipment, equipment and related packaging materials used by medical manufacturers. | NIL |
| Government projects sponsored through commercial loans | NIL |
| Agricultural insurance | NIL |
VAT RETURNS | |
| VAT returns for domestic goods or services shall be submitted on the 20th day of month next to the month in which the transaction took place. | |
| VAT on imported goods is charged at the point of importation along with the customs duty. | |
| Every business registered with VAT is compulsorily required to maintain an EFD. | |
STAMP DUTY | |
| DESCRIPTION | RATE |
| Transfer of title/ownership | 1% of sale price |
| Agricultural land | TZS 500.00 |
| Contracts/Agreements and other Legal documents | Special rates apply on Stamp duty charged on commercial and legal transactions. |
Disclaimer:
Please note that this document has been prepared by Legal Worthy Attorneys (LWA) to provide taxpayers with a quick reference to applicable tax rates in