Excise Duty on Charges and Fees Paid to Financial Institutions and Telecommunication Service Providers

Banks and other financial institutions

With effect from 1st July 2014 the Excise Duty on charges or fees payable by any person to banks or any non-bank financial institution was introduced by amending section 125 of the Excise (Management and Tariff) Act Cap 147. Any bank or financial institution is required to pay to TRA 10% of the total amount collected from customers or clients in the form of charges or fees including money transfer service fee

Telecommunication service providers

With effect from 1st July 2014 the Excise Duty on money transfer fees payable by any person to any Telecommunication Service Provider was introduced by amending section 125 of the Excise (Management and Tariff) Act Cap 147. Any Telecommunication Service Provider is required to pay to TRA 10% of the total amount collected from customers or clients in the form of money transfer service fee only

Persons Liable to pay the Excise duty

The duty imposed by the Act on money transfer fee shall become due and payable by banks, financial institutions, and telecommunication service providers. It should be noted that, the customers of the banks or Telecommunication Company are not liable to pay the duty.

Due date for payment of duty

The Duty should be paid not later than the last working day of the month following the month in which the Duty falls due. Banks, financial institutions and telecommunication companies are therefore required to remit the duty to TRA timely. The service providers and banks shall submit to the TRA a monthly showing the particulars: -

• The quantity or number of excisable services provided during the month
• Any other matters as may be prescribed

Payment

The Excise Duty is payable not later than the last working day of the month following the month in which the Duty falls due. Payment will be made using the newly introduced On-line Order Form for electronic transfer of tax revenue to Bank of Tanzania under the Revenue Gateway System (RGS). The GFS Code for this tax type is 11429900.

Penalty for failure to Submit returns  

Any person who fails to make a return within the time prescribed shall pay a penalty of one hundred thousand shillings or one per centum of the tax in respect of the period covered by the return, whichever is greater, and a further two hundred thousand shillings or two per centum of the tax payable in respect of the period covered by the return, whichever is greater, shall be payable for each month or part of the month thereafter.

Notification to TRA

The bank, non-bank financial institution and the Telecommunication Service Provider is required to submit to TRA within 21 days a return giving details of the excisable service provided, its price and all other particulars as may be prescribed. In case of any changes the taxpayer shall notify the TRA on such changes within 15 days following the change