TAXES AND DUTIES AT GLANCE 200809 by ashrafp


									                 TAXES AND DUTIES AT A GLANCE

Prepared by:
Taxpayer Services and Education Department

August 2008                                     Eighth Edition
(A) DIRECT TAXES                                                                           RATES
     TAX SOURCE                                                                        RESIDENT                  NON-
1.   Corporate Tax:                                                                    30%                       30%

     Companies with perpetual tax loss for 3 consecutive years as a result of          0.3% of annual turnover   0.3% of annual
     tax of tax incentives on investment.                                                                        turnover
     For newly listed company to the Dar es Salaam stock exchange, with at             25%                       25%
     least 35% of its shares issued to the public for three consecutive years
     from date of listing.
     Total income of a domestic                                                        N/A                       30%
     permanent establishment

     Repatriated income of branch                                                      -                         10%
2.   Withholding tax on:

     (i) Dividends to company controlling                                              0%                        10%
         25% of shares or more.
     (ii) Dividends from DSE listed company                                            5%                        5%

     (iii) Dividends from other Companies                                              10%                       10%

     (iv) Other withholding payments                                                   15%                       15%

     (v) Interest                                                                      10%                       10%
     (vi) Royalties                                                                    15%                       15%
     (vii) Technical Services fees (Mining)                                            5%                        15%

     (viii) Transport (Non resident operator/chatterer without permanent               N/A                       5%

     (ix) Rental Income (residential house if exceeds sh. 500,000/- p.a)               10%                       15%

        Other (any amount)                                                             10%                       15%
     (x ) Insurance Premium                                                            0%                        5%
     (xi) Natural Resource Payment                                                     15%                       15%
     (xii) Service fees                                                                N/A                       15%
     (xiii) Services to Gvt by persons other than holders of TIN registration          2% of gross               2% of gross
                                                                                       payment                   payment
3.   Disposal of Investment Assets:

     Individuals asset                                                                 10%                       20%

     Company                                                                           % 30%                     % 30%

     Exemption on disposal of investments:

     a. Private residence gains of sh. 15 million or less.

     b. Agricultural land – Market value of less than 10 million

     c. Shares:

     1. DSE shares held by non resident if shareholding of 25% or less

     2. Shares held by a resident company running another company with share holding
     of 25% or more.

4.   Single instalment tax on:-

     1. Sale of land and property (lump sum)
                                                                                      10%                     20%
     2. Transport across borders                                                                              5%
     Due date remittance of withholding tax: (i) Payment – within 7days
                                                  after month of Deduction.

                                                (ii) Return – 30 days after each
                                                     6-month period.

5.   Individual Income Tax

                                     Monthly Income                                   Tax Rate

     Where total income does not exceed sh. 100,000/-                                 NIL

     Where total income exceeds sh. 100,000/= but does not exceed sh. 360,000/-       15% of the amount in excess of
                                                                                      sh. 100,000/-
     Where total income exceeds sh. 360,000/- but does not exceed sh. 540,000./-      39,000/- plus 20% of the amount in
                                                                                      excess of sh. 360,000/-
     Where total income exceeds sh. 540,000/- but does not exceed sh. 720,000/-       Sh 75,000/- plus 25% of the amount in
                                                                                      excess of sh. 540,000/-
     Where total income exceeds sh. 720,000/-                                         Sh120,000/- plus 30% of the amount in
                                                                                      excess of sh. 720,000/-
     Threshold per annum: Income Shs. 1,200,000/-

     1.For non-resident employees of a resident employer the income is subject to withholding tax at the rate of 15%. However
     the total income of a non-resident individual is charged at the rate of 20%.

     2. An employee who makes donation as per section 12 of Education Fund Act, such donation is exempted from
     tax. But such exemption is upon approval by the Commissioner.
6.   Benefit in kind:

     a. Housing: Lower of the:-    Market value rental of the premises and the higher of the following:-
                                          i. 15% of the employees total annual income and
                                             ii. The expenditure claimed as deduction by the employer in respect of the premises
     b. Car: Motor vehicles taxable benefits are based on engine size and vehicle age on the following annual values:-

     Engine size                                                                      Engine size Up to 5     Greater than 5
                                                                                      years old Tsh.          years old
     Not exceeding 1000cc                                                             250,000/-               125,000/-
     1000 – 2000 cc                                                                   500,000/-               250,000/-

     2000 – 3000 cc                                                                   1,000,000/-             500,000/-

     Above 3000 cc                                                                    1,500,000/-             750,000/-
     Note: Not chargeable where the employer does not claim deduction in respect
     of the ownership, maintenance, or operation of the vehicle.

7.   The Individual Presumptive Tax Assessment

     Turnover                                                                         Tax Payable where       Tax payable
                                                                                      Incomplete records      where records
                                                                                      are kept                are kept.
     (i) Where turnover does not exceed sh. 3,000,000/-                               Sh. 35,000/-            1.1% of the
                                                                                                              annual turnover.
     (ii) Where turnover is between 3,000,000/- and 7,000,000/-                       Sh. 95,000/-            Sh. 33,000/-
                                                                                                              plus 1.3% of the
                                                                                                              turnover in
                                                                                                              excess of
                                                                                                              sh. 3,000,000/-

      (iii) Where turnover is between 7,000,000/- and Sh. 14,000,000/-                   Sh. 291,000/-          Shs. 85,000/-
                                                                                                                pus 2.5% of the
                                                                                                                turnover in
                                                                                                                excess of sh.
      (iv) Where turnover is between shs. 14,000,000/- and shs 20,000,000/-              Sh. 520,000/-          Sh. 260,000/-
                                                                                                                plus 3.3% of the
                                                                                                                turnover in
                                                                                                                excess of sh.

      Note: Where turnover exceeds Tshs 20,000,000/- the taxpayer is obliged to prepare audited financial statements in respect
      of his/her business.

8.    Submission of returns and payment of tax for accounts based on calendar year*

      i. On or before 31st March
      ii. On or before 30th June
      iii. On or before 30th September
      iv. On or before 31st December

      * Payments for the other accounting dates are made at the end of every
        quarter, depending on one’s accounting period.

      b. Final returns and payment of tax
        Within six months from the end of the accounting period.

      c. Due dates for payment of tax under P.A. Y. E. Scheme.
         Within 7 days of the month following the month to which payment relates.
9     Skills and Development Levy:

       (i) Tanzania Mainland:
       Rate is 6% of the monthly gross emoluments.
       (ii) Tanzania Zanzibar
        Rate is 5% of the monthly gross emoluments.

      Note: The gross emoluments include wages, salary, leave pay, sick pay, payment in lieu of leave, fees, commission,
      gratuity, bonuses any subsistence, travelling entertainment or any other allowance in respect of employment or services
      rendered, except allowances which are solely for performance of the employer’s job.

10.   Depreciable assets, allowances and the applicable rates

      Class           Depreciable assets                                                                        Rates

      1*       Computers and data handling equipment together with peripheral devices, automobiles,             37.5%
               buses and minibuses with a sitting capacity of less than 30 passengers, good vehicles with a
               seating capacity of less than 7 tones, Construction and earth moving equipment.
      2*       Buses with a seating capacity of 30 or more passengers, heavy general purpose or                 25%
               specialized trucks, trailers and trailer mounted containers, railroad cars, locomotives, and
               equipment, vessels, barges, tags, and similar water transportation equipment, aircraft other
               self propelling vehicles, plant and machinery (including wind mills, electric generators, and
               distribution equipment) used in manufacturing or mining operations, specialized public utility
               plant and equipment, and machinery or other irrigation installations and equipment.

      3*       Office furniture, fixtures and equipment, any asset not included in another class.               12.5%

      4**      Natural resource exploration and production rights and assets in respect of natural resource     20%
               prospecting, exploration and development expenditure.

      5**      Buildings, structures, dams, water reservoirs, fences, and similar works of a permanent          20%
               nature used in agriculture, livestock farming or fishing farming.

      6**      Buildings, structures, and similar works of permanent nature other than those mentioned in       5%
               class 5.

      7**      Intangible assets other than those in class 4.                                                 Over
                                                                                                              useful life
                                                                                                              of the
      8**      Plant and machinery (including windmills, electric generators and distribution equipment)      100%
               used in agriculture

      Note 1 * Pools of depreciable assets calculated basing on diminishing value method.

      Note 2 **Pools of assets calculated basing on straight line method.

11.          Value Added Tax (VAT)

             VAT registration threshold:
             Taxable turnover exceeding sh. 40 million per annum, or Taxable turnover exceeding 10 million attained during
             three consecutive months.

                                                                                                              VAT rates
                                      Description of goods/supplies and services

             Supply of taxable goods and services in Mainland Tanzania                                        20%

             Importation of taxable goods and services into Mainland Tanzania                                 20%

             Export of goods and certain services from the United Rep. of Tanzania                            0%

             Supply of taxable goods and services to relieved persons – Not subjected to VAT

             The Government and its Institutions are not relieved from VAT

             Goods and services under a technical aid or donor funded projects, voluntary and charitable organization under
             existing laws, and special agreements are relieved from VAT
             VAT on capital goods to any person is relieved

             VAT Returns and payments

             Local Supplies : Last working day of the month following month of business

             Imports: At the time customs duty is due and payable in accordance with the customs laws.

             i. VAT refund on genuine claim: Within 30 days after submission of an authorized auditors Certificate of genuine
             at the end of the last six months period.
             ii. Regular Repayment: Business in a constant refund position may apply for Authorization to lodge claims on a
             monthly basis.

12.          Stamp duty

             Description                                                               Rates

                                                                                       1% of consideration
             1. Conveyance

                Conveyance for agricultural land                                       Tshs 500/=

             ii. Receipts on sales of goods or services for business                   Exempted

             iii. Legal and commercial instruments                                     The duty is chargeable at Specific rates
                                                                                       e.g. Mortgage deed under article 39 rate
                                                                                       is 1% of the amount of instrument with a
                                                                                       maximum of 10,000/= of stamp duty

      Due dates is within 30 days.

13.   Import duty

      Items                                                                       Duty rates

      (i). Raw materials, pharmaceuticals and capital goods                       Exempt
           Hand hoes, agricultural implements

      (iii). Finished goods and finished inputs.                                  10%

      (v). Final consumer goods or finished commercial goods.                     25%

      (vi) Some items are charged at a higher rate than 25% with the intention of protecting local industries,
                e.g. Milk and Cream containing sweetening matter.
                Cane or beet sugar and chemically pure sucrose in solid form
                Sacks and bags of a kind used for the packing of goods.
                Worn clothing and other worn articles (mitumba).
14.   Excise Duty

      A. (i) Specific Rates on: Wine, spirits, beer, soft drinks, cigarettes, tobacco and petroleum products.

         (ii) Ad-valorem rates are: 7%, 10%, 20% , 30%and 120% ( 120% imposed on shopping plastic bags.)
      B. Imports of non-utility vehicles:
          Imported non-utility vehicles of ten years of age or more , counted from the date of manufacture, are
          chargeable excise duty at the rate of 20%

      C. Excise duty on Motor vehicles
                                Description of vehicle                            Applicable rate

      i) Of cylinder capacity exceeding 1000 cc but not exceeding                 5%
      2000 cc
      ii) Of cylinder capacity exceeding 2000 cc                                  10%

15.   Fuel levy                                                                   Sh. 200 per litre of petrol or diesel

16.   Airport Service Charges

      International Travel                                                        USD 30

      Local travel (resident)                                                     Sh. 5,000/-

17.   Port Charges

      Resident Traveler                                                           Sh. 500/-

      Non resident traveler                                                       USD 5

18.   Motor Vehicle Registration

      Motor vehicle registration fees                                             Sh. 120,000.00

      Motor cycle registration fees                                               Sh. 35,000.00

      Costs for number plates (M/vehicle)                                         Sh. 36,000.00

      Costs for a number plate (M/cycle)                                          Sh. 19,000.00

19.   Annual fee are as follows:

      Engine capacity                                                             Annual fee

      Up to 500 cc                                                                30,000/= per annum

      501-1500 cc                                                                 50,000/= per annum

      1,500- 2,500 cc                                                             100,000/= per annum

      2,500 – 5,000 cc                                                            150,000/= per annum

      Above 5,000 cc                                                              150,000/= per annum

      Tractors used for agricultural purposes                                     Exempt

20.   Motor Vehicle transfer tax

      Motor vehicle transfer fees                                                 Sh. 50,000.00

      Motor cycle transfer fee                                                    Sh. 15,000.00

      Fee for a new registration card                                             Sh. 10,000.00

21.   Motor Vehicle Driving License

      License fees                                                                Tsh. 10,000/- renewable every 3 years

      Driving test fee                                                            Tsh. 3,000/-

      Provisional license fees                                                    Tsh. 5,000/- renewable every 3 months

22.   Export Tax:

        20% of the value of hides and skins

        A levy of 10% chargeable on raw cashew nuts, computed on FOB value

23.   Duty Drawback: Import duty is refunded on imported inputs used for producing goods for export and goods sold
      to foreign institutions operating in Tanzania.

24.   Prohibited goods Narcotic drugs, tear gas substances, seditious, obsceneness materials or literature.

25.   Restricted goods* Live animals, plants, firearms, ammunitions, etc    * These require permit from relevant authorities

26.   Destination Inspection
                                 All imported goods regardless of their value are required to be inspected in the country. A
                                 fee of 1.2% on FOB value is chargeable. Exempted goods are enshrined in the law

27.   ASYCUDA++:                 Under the system Documents’ processing fee is USD 10

28.   Temporary importation:
      Temporary importations are restricted for 3 months; in case of extension a person have a chance to apply for two
      periods of 3 months. Thereafter import duty must be paid and been registered in the case of motor vehicle.

29    Imports from East African Community member states:

      Goods within member states are chargeable at the rate of 0% except some of the goods from the Republic of Kenya
      imported into Tanzania whose rates will reduce progressively to 0% over a period of 5 years.

30.   Property rates: Dar es Salaam region.
      A. Segmentation of properties and applicable rates are as follows:
      Specifications                                          Applicable rate

    (i) Residential properties                            0.15% of rateable value as per valuation roll

    (ii) Commercial properties                            0.2% of rateable value as per valuation roll

    Provided that the amount chargeable shall not be less than 10,000/=

    B. For properties not included in Valuation roll, rates are provided in the first schedule to the By laws of the
    respective Local Authority (Temeke, Ilala and Kinondoni Municipalities)
    C. The property rates for other regions will continue to be collected by the respective local Authorities.


                 Note: This booklet is not a substitute for the respective tax laws.
                       The tax laws prevail in case of any inadvertent conflict.

                            ‘Together we build our Nation’
                                For more information please contact:
                                            The Director,
                                  Taxpayer Education Department,
                                    Tanzania Revenue Authority
                                           P.O.Box 11491,
                                          Dar- es –Salaam.
                         Telephone 022-2119343, 2119591-4, Fax: 022-2128593
                                        Tollfree 0713 800 333


                                           WATCH OUT!
                                 TRA does not condone corruption
                              Both involved parties will be procecuted.


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