Individuals are categorized in two groups:
- Individual traders who are under presumptive tax regime
- Individual trader who are not under presumptive regime.
1) Individual traders who are under presumptive tax regime
Taxation of individual under presumptive regime is based on annual turnover. In this category individual are not required to file final return with audited books of accounts unless he/she elects to. This category consists of individuals who fulfills the following requirements:
- the individual should be a resident for the year of income,
- the individual's income for a year of income consists exclusively of income from a business having a source in the United Republic;
- the turnover of the business does not exceed Tshs. 100 million: and
- the individual does not elect to dis-apply the presumptive rules
Where a resident individual meets the above requirement for a year of income the individual's income tax payable for the year of income shall be equal to the amount of presumptive income tax provided in the below schedule;
| Annual turnover | Tax payable when records are incomplete | Tax payable when records are complete |
| Where turnovers does not exceed Tshs 4,000,000 | NIL | NIL |
| Where turnover exceeds Tshs 4,000,000/= but does not exceed Tshs 7,000,000 | Tshs 100,000/= | 3% of the turnover in excess of Tshs 4,000,000/= |
| Where turnover exceeds Tshs 7,000,000/= but does not exceeds Tshs 11,000,000/= | Tshs 250,000/= | Tshs 90,000/= plus 3% of the turnover in excess of Tshs 7,000,000/= |
| Where turnover exceeds Tshs 7,000,000/= but does not exceeds Tshs 11,000,000/= | Tshs 250,000/= | Tshs 90,000/= plus 3% of the turnover in excess of Tshs 7,000,000/= |
| Where turnovers exceed Tshs. 11,000,000/= but does not exceed Tshs. 100,000,000/= | 3.5% of turnover | |
2) Individual traders who are no under presumptive tax regime
This category consists of individuals who do not fulfil the requirements of presumptive tax regime. Under this category individual pay tax basing on their taxable income for the year. The traders under this are required to keep proper records including filing of provisional returns on or before 31st March. At the end of the year the individual under this category are required to file final return attaching the audited financial statements and submit it to TRA on or before 30 June of the following year to which the return relates.
The rates applicable under this category are as shown in the table below:
- For Tanzania Mainland
Monthly Taxable Income | Tax Rate |
Where total Income does not exceed Tshs. 270,000/= | NIL |
Where the total Income exceeds Tshs. 270,000/= but does not exceed Tshs. 520,000/= | 8% of the amount in excess of the amount in excess of Tshs. 270,000/= |
Where total Income exceeds Tshs. 520,000/= but does not exceed Tshs. 760,000/= | Tshs. 20,000/= plus 20% of the amount in excess of Tshs. 520,000/= |
Where total Income exceeds Tshs. 760,000/= but does not exceed Tshs. 1,000,000/= | Tshs. 68,000/= plus 25% of the amount in excess of Tshs. 760,000/= |
Where total Income exceeds Tshs. 1,000,000/= | Tshs. 128,000/= plus 30% of the amount in excess of Tshs. 1,000,000/= |
Note: Threshold per annum: Annual Income of Tshs 3,240,000/= is not taxable |
|
- For Zanzibar
Monthly Taxable Income | Tax Rate |
Where total Income does not exceed Tshs. 270,000/= | NIL |
Where the total Income exceeds Tshs. 270,000/= but does not exceed Tshs. 520,000/= | 8% of the amount in excess of the amount in excess of Tshs. 270,000/= |
Where total Income exceeds Tshs. 520,000/= but does not exceed Tshs. 760,000/= | Tshs. 20,000/= plus 20% of the amount in excess of Tshs. 520,000/= |
Where total Income exceeds Tshs. 760,000/= but does not exceed Tshs. 1,000,000/= | Tshs. 68,000/= plus 25% of the amount in excess of Tshs. 760,000/= |
Where total Income exceeds Tshs. 1,000,000/= | Tshs. 128,000/= plus 30% of the amount in excess of Tshs. 1,000,000/= |
Note: Threshold per annum Annual Income of Tshs. 3,240,000 is not taxable |
|
2. Filing of tax returns and payment of tax
- The statement of estimated tax payable
The statement of estimated tax payable is a provisional return which a taxpayer is required to complete and file to the Commissioner within three months from the beginning of the year of income (which for individuals shall be calendar year).
The taxpayer is supposed to pay the estimated tax in a maximum of four installments each falling due after three months. The Due dates are as follows:
On or before 31st March
On or before 30th June
On or before 30th September
On or before 31st December
Form: ITX200.01.E – Statement of Estimated assessment - Individual
- Final returns.
A taxpayer must file a final tax return to TRA within six months after the end of each tax year. The taxpayer must file return in the period between 1st January and 30th June
Forms: ITX201.01.E Return of Income – Individual
When is an individual required to file the return of income?
An individual is required to file a return of income with the Commissioner no later than six months after the end of each year of income
The Commissioner may extend the due date for filing a return of income upon an application by the person in writing and on such terms and conditions as the Commissioner considers appropriate.
Under the presumptive system an individual is not obliged to file any return of income but instead can pay by installments if the assessed amount exceeds TSHS 50,000 per year
What are the important aspects to consider when completing your return of income
The return requires you to specify your chargeable income. This would include:
- your total income
- any repatriated income of your domestic permanent establishment
If you were non-resident during the year of income and tax paid by withholding and installment for which tax credit is available for the year of income you must check the business or investment financial information pages sent with the return to ensure all the pages required for your various types of business or investment income and gains have been received.
If any pages are missing or you require supplementary pages, these should be requisitioned from your nearest TRA Office or through the Call Centre
You are responsible for filing a correct return. The filed return may be checked to ensure it is correct and there are penalties chargeable for supplying false information or omitting income. If you need assistance in completing your return, contact your nearest TRA Office or the Call Centre
If you require an extension to the due date for filing the return, you should make an application for the Commissioner’s approval before the statutory due date
When you have completed your return, make sure that you have filled in all the information requested. Once you have done this, sign and date the declaration and send the completed form to TRA. Send the form with any supporting calculations, supplementary pages and audited accounts (financial statements). It is a good idea to keep a copy of the completed return for your own records.
What records should be maintained by a taxpayer?
The Income Tax Act requires every individual who is liable for tax in the United Republic of Tanzania, to maintain all documents necessary to enable an accurate determination of the tax payable.
These documents shall be retained for a period of at least five years from the end of the year of income or years of income to which they are relevant, unless the Commissioner specifies otherwise by notice in writing.
Where any document is not written in an official language of the United Republic of Tanzania, the Commissioner may, by notice in writing, require the individual to provide, at the individuals expense, a translation into an official language by a translator approved by the Commissioner in the notice.
What are the contents of return form?
The return form consists of seven pages and there are other supplementary pages for calculation of the following types of income and gains:
- Gains from realisation of shares and securities in a corporation
- Gains from realisation of assets excluding shares, securities or trading stock
- Repatriated income of an individuals domestic permanent establishment
- Income from general insurance business
- Income from life insurance business
- Income from mining operations
Submitting the return
- Completing the figures in the return
Do not include cents – round down revenue figures, and round up tax credits and tax deductions to the nearest shilling.
- Submitting the return
Do not delay submitting the return to TRA, even if you do not have all the information you need. Where some of the information is missing estimate the amount and indicates which information is estimated at the time of filing that needs confirmation.
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