The tax reign in Tanzania includes a lot of different taxes like direct tax, indirect tax, income tax, import duty, stamp tax, value-added, and other taxes. They are divided into three different departments: domestic, customs and excise. And the minister of finance supervises the tax policies.
Tax Tanzania and Tanzania tax revenue consists of taxes made on a quarterly basis and uses the self-assessment approach. But before we discuss the different taxes, we need to discuss why you should pay taxes in the first place.
Reasons Why You Should Pay All Applicable Taxes
Paying tax is every citizen’s responsibility, and it might feel like a hassle sometimes, but it is best to do your duty to help your country. Taxes build the country in many ways, and here are three of them.
Improves The Condition
Running a country is not a piece of cake, and the government cannot do much if the citizens don’t perform their duties. Paying taxes can help in improving your country’s condition and make it stronger. In order to perform civil operations and help others, the government needs the citizens to pay taxes.
Every country has welfare programs for the needy, but these programs cannot succeed without taxes. These programs are made for the betterment and reduction of poverty in the country, and your taxes play a vital role in this cause. If the citizens continue to pay taxes, more welfare programs can be launched, and more people can be helped with them.
Healthcare And Education
No country can succeed without a good healthcare and education system. Government can only build these facilities if citizens pay their taxes. You must play your part in creating a more reliable education system for your children and a better healthcare system so everyone can get treated and stay healthy.
Now that we have discussed the reasons, here are the different forms of taxes you need to pay to play your part in your count
Forms Of Taxes
The income of employees is heavily taxed in Tanzania. The citizens have to pay income tax on a worldwide basis, while non-residents have to only pay on the income made on Tanzania source. Citizens who have been living in Tanzania for six months are liable to income tax, and the companies incorporated in Tanzania are also regarded with this. The tax rate for corporations is 30%, and it is in line with most East African countries. An additional 10% tax is to be made on the income of branches of foreign businesses.
VAT has to pay an 18% rate while export is zero-rated. Excise duty is also a kind of indirect tax, and it is imposed on goods imported or locally produced. In January 2010, it was declared that people from EAC countries do not have to pay import duties for goods moving within the region. The import duty rate outside the EAC countries is 5 to 10% on intermediate goods, 25% on finished goods, and 0% on raw materials, agriculture, animals, and capital goods.
Personal taxes include residency tax, and in order to be eligible for it, one of the following requirements must be fulfilled.
- The resident should have a permanent home in Tanzania, and he must be present in the country for some time during the year of income.
- If the resident is a government employee, who is posted in a different country during the year of income.
- The resident should be present during the year of income for at least 183 days.
- If the resident is present in the country for 122 days each for two years of income.
Tax on payroll constitutes 6% of the salary and contribution to social security funds. The taxes on property are generally determined by the local government and depend on the land rates.
Tax Tanzania and Tanzania tax revenue can be very difficult and daunting, which is why we advise you to get professional guidance from Shikana Group; their team of experienced lawyers will let you know all the details.