Verified Facts
Tax rates in Tanzania range from 14% to 30% for personal income tax, with a corporate tax rate of 30% and a value-added tax (VAT) rate of 18%.
Tax laws change frequently. Always consult a qualified tax professional for advice specific to your situation. This is a general guide only.
Quick Facts
Tax System Overview
Tanzania has a territorial taxation system, where tax is levied on income earned within the country, regardless of the taxpayer's residence. However, residents are also subject to tax on their worldwide income, with a credit given for foreign taxes paid. To be considered a tax resident in Tanzania, an individual must be physically present in the country for at least 183 days in a calendar year, or have a permanent home in Tanzania and be physically present in the country at any time during the year.
The tax system in Tanzania is administered by the Tanzania Revenue Authority (TRA), which is responsible for collecting taxes, as well as providing guidance and support to taxpayers. The TRA also has the authority to conduct audits and investigations to ensure compliance with tax laws and regulations. Taxpayers in Tanzania can file their tax returns electronically, and the TRA provides a range of online services and resources to help taxpayers understand and comply with their tax obligations.
Personal Income Tax
| Income Bracket (TZS) | Tax Rate |
|---|---|
| 0 - 240,000 | 14% |
| 240,001 - 480,000 | 19% |
| 480,001 - 960,000 | 23% |
| 960,001 - 1,920,000 | 26% |
| 1,920,001 and above | 30% |
| Taxpayers in Tanzania are entitled to various deductions and allowances, including a personal allowance of TZS 270,000 per year, as well as deductions for mortgage interest, medical expenses, and charitable donations. Tax returns must be filed by June 30th of each year, and taxpayers who fail to file on time may be subject to penalties and interest. |
Corporate & Business Tax
- The corporate tax rate in Tanzania is 30%, which applies to all companies, including branches of foreign companies.
- Small businesses with an annual turnover of less than TZS 100 million may be eligible for a reduced tax rate of 20%.
- Tanzania has several free zones, including the Zanzibar Free Economic Zone and the Kigoma Free Port Zone, which offer tax incentives and other benefits to businesses that operate within these zones.
- Companies must register with the TRA and obtain a tax identification number (TIN) in order to conduct business in Tanzania.
- Companies are also required to file annual tax returns, as well as monthly or quarterly withholding tax returns, depending on the nature of their business.
VAT / Sales Tax
- The standard VAT rate in Tanzania is 18%, which applies to most goods and services.
- A reduced VAT rate of 0% applies to certain basic goods and services, such as food, healthcare, and education.
- Some goods and services, such as financial services and real estate, are exempt from VAT.
- Tanzania has a tourist refund scheme, which allows foreign visitors to claim a refund of VAT paid on goods purchased in the country.
For Expats & Foreign Workers
- Expats who are tax residents in Tanzania are subject to tax on their worldwide income, including income earned outside of Tanzania.
- Tanzania has double taxation treaties with 12 countries, including the UK, Canada, and Australia, which can help to reduce the risk of double taxation.
- Expats who are not tax residents in Tanzania are only subject to tax on their Tanzanian-sourced income.
- Expats may be required to make social security contributions, depending on their employment status and nationality.
- Expats who earn income in Tanzania may be subject to withholding tax on their income, which can be credited against their final tax liability.
- Expats who leave Tanzania permanently may be subject to departure tax, which applies to the value of any assets they own in the country.
Crypto & Investment Income
- Investment income, such as dividends, interest, and rental income, is subject to tax in Tanzania, either as part of an individual's income tax liability or as a separate tax liability.
- Cryptocurrency transactions are subject to tax in Tanzania, with gains from the sale of cryptocurrency being subject to capital gains tax.
- Tanzania has not introduced any specific tax laws or regulations for cryptocurrency, but the TRA has issued guidance on the tax treatment of cryptocurrency transactions.
- Dividends paid to non-resident shareholders are subject to a withholding tax rate of 10%, which can be reduced under a double taxation treaty.