STARTING BUSINESS

This page provides essential guidance on the fundamental steps required to establish a business as an individual, partnership, trust, or limited company.

Steps to take on starting a business

 

Individual

Whether a resident or non-resident, an individual has to visit the TRA website at www.tra.go.tz to obtain a Taxpayer Identification Number (TIN). To complete this process, the individual must possess an official identification, such as a National ID, Passport ID, or Voter ID. The individual will need to fill out the Online TIN application form available at https://taxpayerportal.tra.go.tz and will receive instructions on how to answer the online questions and upload the necessary documents. 
 

For business TIN purposes, a person who becomes potentially liable to tax by reason of carrying a business shall apply for a Taxpayer Identification Number within fifteen days from the date of commencing the business. The individual is required to attach a letter from a Local Government Authority and a lease agreement or title deed for the business location. Once the TIN certificate is issued, the taxpayer must undergo an assessment interview for tax evaluation. After fulfilling the tax obligations, the taxpayer will receive a Tax Clearance in order to acquire Business License from the Trade office in District or Municipal or City or the Ministry of Industry and Trade depending on the type of business. Where turnover of an individual who obtains a Taxpayer Identification Number for purposes of commencing a business exceeds Tshs 4,000,000/= but does not exceed Tshs 200,000,000/= can apply to the Commissioner for exemption provided therein, and the Commissioner shall grant such exemption where he is satisfied that the applicant fulfils the specified conditions or other conditions as specified in the regulations.

Specified Conditions for an Individual to apply for Exemption

(a) such an individual has obtained a TIN for purposes of commencing a business for the first time; 

(b) the projected annual turnover of the business falls entirely within the limits established for the presumptive tax regime and 

(c) the business shall operate exclusively under the presumptive tax regime for the entire duration of the tax relief.

 

Qualifications of as a resident individual.
An individual is resident in the United Republic for a year of income if the individual-

• Has a permanent home in the United Republic and is present in the United Republic during any part of the year of income;
• Is present in the United Republic during the year of income for a period or periods amounting in aggregate to one hundred eighty-three days or more;
• Is present in the United Republic during the year of income and in each of the two preceding years of income for periods averaging more than one hundred twenty-two days in each such year of income; or
• Is an employee or an official of the Government of the United Republic posted abroad during the year of income.

 

Business Registration Certificate
An individual may opt to register the business name to the agency commissioned by Ministry of Industry and Trade known as Business Registration and Licensing Authority (BRELA). The registered business name shall be indicated on the TIN certificate together with an individuals’ name showing the owners name trading as (T/A).

 

A Corporation (limited Company)
To establish a corporation, an individual must apply for a Certificate of Incorporation from the Business Registration and Licensing Authority (BRELA). The company's Directors are required to prepare a Memorandum and Articles of Association and submit these documents along with the Certificate of Incorporation, a lease agreement or title deed, and an introductory letter from the local authority.

Once the registration with BRELA is complete, the entity administrator or any among of the director must log in on the taxpayer portal system to appoint a declarant who will file a tax assessment, and submit returns for Income, Pay As You Earn (PAYE), Skills Development Levy (SDL) or any other liable taxes.

Once the entity has fulfilled its tax obligations, it may apply for a Tax Clearance Certificate through the IDRAS system. This certificate enables the entity to proceed with obtaining the necessary licenses from other business authorities.

 

Partnership

The partners are required to register the firm with the Business Registration and Licensing Agency (BRELA) and obtain a certificate of registration. Once the certificate is issued, any of the partners may log in to the IDRAS system and submit the partnership deed which outlines the names of the partners and their respective profit-sharing ratios, the certificate of registration obtained from BRELA, Lease agreement or title deed, and an Introduction letter from the Local Government Authority so as to apply for a Tax Identification Number (TIN).

 

Trust

Trust is a legal framework wherein trustees manage assets, distinct from partnerships and corporations. A trust must register with RITA to obtain a certificate of registration and create a trust deed that lists the names and addresses of the trustees. Each trustee is required to apply for a Tax Identification Number (TIN). If a trustee has previously received a TIN for another purpose, they are not permitted to submit a new application; the existing TIN will be utilized.

 

Religious Organization and Civil Society Organization

Civil Society Organization mean a voluntary association of individuals or entities, typically non-profit, formed and functioning to serve the welfare or interests of the community or the public. These groups operate on local, national, or international scales with the aim of fostering economic, environmental, social, or cultural development, as well as advocating for issues related to governance, law enforcement, human rights, and environmental conservation. Religious organization is a resident entity of a public character established for the advancement of religion.

Civil Society Organizations and Religious Organizations must be registered with the Registrar. When applying for registration, an organization is required to submit a copy of its constitution, the full names and signatures of its founding members, the physical location of its head office, and the prescribed application fee.

An organization may be registered at either the district or regional level. Furthermore, any changes to the organization’s constitution or name must be communicated to the Registrar in writing.

 

Group

Group can apply for a Tax Identification Number (TIN) for tax purposes. They are required to obtain a group registration certificate from the District or Municipal Council. The group’s constitution, TINs of the group members, lease agreement, and a letter from the local government are all required. These documents will serve as attachments when registering for a TIN through the Taxpayer Portal/IDRAS.