Income Tax For Individuals : Tanzania Revenue Authority

Name of the Organization : Tanzania Revenue Authority
Type of Facility : Income Tax For Individuals
Country : Tanzania

Official Website : https://www.tra.go.tz/

Income Tax For Individuals :

Individuals are categorized in two groups, small individual traders who are not required to maintain audited accounts and the medium individual traders who are required to maintain audited accounts.

Related : Tanzania Revenue Authority Online Submission of VAT Returns : www.statusin.org/4794.html

Small traders are taxed by presumptive tax system, whereas medium are taxed based on the annual profit determined from the audited accounts.

a) Presumptive tax system :
This is a tax system where individuals are taxed based on their annual turnover. The Taxpayers under this system are not obligated to prepare and submit audited accounts to the TRA. However, he may opt not to apply the system and prepare audited accounts and pay tax based on profits.

Conditions which qualify to be in Presumptive tax system :
** the Taxpayer must be a resident individual
** the annual turnover of the business does not exceed the threshold of TSHS 20 million.
** he must conduct business only for the year of income hence not be engaged in any other activities such as employment or investments. Under the presumptive tax system, individual’s income must be derived solely from business sources. If income is derived from other sources such as employment and/or investment the presumptive scheme cannot be used.
** the individual’s income for any year must consist exclusively of income from business with sources in the United Republic of Tanzania.

Rates of tax under presumptive tax System :
Under this system, tax payable is established based annual turnover shown by taxpayers records. In absence of complete records, annual turnover will be estimated based on the best judgment of the commissioner.

Individuals who prepare audited accounts :
This is a group of taxpayers whose annual turnover is above TSHS 20,000,000 and are required to prepare audited accounts/financial statements in respect of their business.

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 : https://www.statusin.org/uploads/4785…individual.doc

Filing of 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

Form : https://www.statusin.org/uploads/4785…ual%20Form.doc

Late payment of tax :
Late payment and filing shall be charged interest at the prevailing statutory rate at the time of imposition plus 5% per annum