Introduction

Stamp duty is a tax imposed on certain legal instruments (documents) specified in the Schedule to the Stamp Duty Act, Chapter 189. The Act provides that instruments listed in the Schedule are chargeable with stamp duty.

 

What Instrument is chargeable with Stamp Duty?

The instrument outlined in the schedule, whether executed within Tanzania mainland or outside but pertaining to any property or matter conducted in Tanzania mainland, is subject to a duty charge as specified or calculated in the manner detailed in the schedule for that instrument, unless an exemption applies.The instrument which is liable for stamp duty is like Transfer of land or property,Leases,Mortgages,Debentures,Certain agreements and contracts,Powers of attorney,Other instruments listed in the Schedule to the Act.

According to the Section 41 of the Stamp Duty Act, the responsibility for paying stamp duty typically falls on the individual who draws, creates, or executes the instrument. In cases where an individual is uncertain about the necessity of stamping an instrument or the applicable amount of Stamp Duty, they may seek clarification from the Stamp Duty Officer for a formal determination.

 

Administration of Stamp Duty

Time when instrument must be stamped

All chargeable instruments executed by any person in Tanzania Mainland shall be stamped within thirty days of execution:The chargeable instrument executed out of Mainland
Tanzania shall be stamped within thirty days of its first arrival
in Mainland Tanzania: 

where the instrument is brought to a proper officer for adjudication under section 43 within thirty days, the period from the presentation of the instrument to the proper officer until the notification to the person who presented it shall be excluded in computing the said period of thirty days; 

Offences relating to Stamp Duty

Any person who:

(a) draws, makes, issues, endorses or transfers, or signs otherwise than as a witness, or presents for acceptance or payment, or accepts, pays or receives payment of, or in any manner negotiates, any bill of exchange, cheque or promissory note which has not been duly stamped;

(b) votes or attempts to vote under any proxy not duly stamped;

(c) issues any share warrant not duly stamped;

(d) being a person required by section 19 to cancel the stamp in the manner prescribed by or under this Act, fails to cancel the stamp;

(e) executes any instrument in which the facts and circumstances required by section 37 to be set forth in the instrument are not fully and truly set forth, or being employed or concerned in or about the preparation of any instrument, neglects or omits fully or truly to set forth facts and circumstances;

(f) in any case in which a receipt is required to be given by this Act, fails to give the receipt, or gives a receipt which is not properly stamped;

(g) upon receipt of a sum of money of fifty shillings or more of a property, the value of which is forty shillings or more, gives one receipt, or two or more receipts, of less than, or any of them of less than forty shillings

(h) upon being required by the Commissioner General, a Stamp Duty Officer, or a public officer authorised by the Commissioner General, to produce for inspection any register, book or document, fails to do so;

(i) being a person appointed to sell stamps, disobeys any lawful direction given by the Commissioner General or contravenes any of the provisions of the regulations made under this Act;

(j) not being a person appointed to sell stamps, sells or offers for sale to any person otherwise than by way of surrender to a Stamp Duty Officer, any stamp other than adhesive stamps each of the value of fifty cents or less

(k) fails to pay any compounded duty within thirty days of the expiry of the period during which it is required to be paid;

(l) fails to submit to a proper officer any statement of account, record or return required to be submitted by, under or in relation to any composition agreement, within fourteen days of the expiry of the period during which the same is required to be submitted; or

(m) save with the consent of the Commissioner General, requires any person making any payment to him or giving him any bill of exchange, cheque or promissory note, otherwise than in repayment of any sum of money lent, or requires any person delivering any property to him, to pay for the stamp duty for any receipt given for any payment, bill of exchange, cheque, promissory note or property,Commits an offence and on conviction shall be liable to a fine not exceeding fifty thousand shillings or imprisonment for a term not exceeding two years or to both.

Rates Applicable to instruments

Rates Applicable to instrumentsStamp duty is charged on specified instruments at varying rates as provided under Section 5 and the Schedule to the Stamp Duty Act. These rates may be amended from time to time following changes made by the Government through the current Finance Act. Some common instruments and their applicable stamp duty rates are as follows:

Description of Instruments	Proper Stamp Duty
AFFIDAVIT, Including an affirmation or declaration in the case of persons by law allowed to affirm or declare instead of taking oath.	TSHS. 2,000/=
AGREEMENT OR MEMORANDUM OF AGREEMENT	TSHS. 2,000/=
AGREEMENT RELATING TO DEPOSIT OF TITLE DEEDS, HYPOTHECATION, PAWN OR PLEDGE,	TSHS. 2,000/=
APPRAISEMENT OR VALUATION, made otherwise than under an order of the Court in the course of a suit:	TSHS. 2,000/=
Instrument of EXCHANGE OF PROPERTY	0.5 percent for the first TSHS. 100,000/=, then 1 percent of value in excess of TSHS. 100,000/=
LEASE, including an under-lease or sublease and any agreement to let or sublet:	1 percent of the annual reserved rent for lease of all durations
MEMORANDUM OF ASSOCIATION OF A COMPANY	TSHS. 10,000/=
Instrument of PARTNERSHIP: (i) Where the capital does not exceed TSHS. 10,000/=.   (ii) Where the capital exceeds TSHS. 100,000/= but does not exceed TSHS. 1,000,000/=.   (iv) In any other case. Dissolution of partnership.	TSHS. 1,000/=     TSHS. 5,000/=     TSHS. 10,000/=   TSHS. 10,000/=
POWER OF ATTORNEY,	TSHS. 2000/=
TRANSFER (whether with or without consideration) (a) of shares in an incorporated company or other body corporate; (b) of debentures whether the debenture is liable to duty or not;   (c) of any interest secured by a bond, mortgage-deed or policy of insurance	1 percent of the value of the shares approved by the Board   1 percent of the value of the shares approved by the Board   1 percent of the value of the shares approved by the Board.