Basic facts to know about Taxation in Tanzania.
Many Tanzanias nowadays engage in business activities but are very much unaware of the basic requirements to clear themselves from this “TRA person” who actually seems and surely is a very big threat to the uninformed.
I will take time to throw basic facts about the Tax system in Tanzania and how taxes by law should be levied,
Take a look at this simple introduction.( INCOME TAX ACT/LAW, 2004 )
In Tanzania the Income Tax Act, 2004 came into effect in July 2004. This act restructured the income tax system in line with modern requirements and repealed the previous Income Tax Act, 1973. Tax is levied on income from employment, income from business and income from investment. Taxable persons include entities and individuals. An entity can be a corporation or a trust, and a corporation is loosely defined to mean any incorporated or unincorporated body of persons or association. For partnerships the individuals within the partnership are taxed on their share of the income. Taxation is on worldwide income for residents (or for individuals, of residents of more than two years) while taxation of non-residents is on Tanzanian source income only. The corporate tax rate is 30%. The individual tax threshold is Tsh 1,200,000 per annum, and the rates are from 15% to a top rate of 30%. Various provisional and final withholding taxes are applied to ease the collection of tax
