Tanzania: Living There - Tax Issues
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Living There
INDIVIDUAL TAXATION
Resident individuals are taxed on their worldwide source of income. An individual is considered as a resident of Tanzania if he has established a permanent home in Tanzania and was present in Tanzania for the particular tax year. In cases where no permanent home was established, the individual is considered a resident if he was present in Tanzania in that taxable year, or was present in Tanzania in that tax year and in each year before that tax year, with an average stay of 122 days for each of the preceding 2 years.
INCOME TAX
Income of residents is taxed at progressive rates.
INCOME TAX |
|
| MONTHLY INCOME, TZS (US$) | MARGINAL TAX RATE |
| Up to 100,000 (US$76) | 0% |
| 100,000 – 360,000 (US$272) | 15% on band over US$76 |
| 360,000 – 540,000 (US$408) | 20% on band over US$272 |
| 540,000 – 720,000 (US$544) | 25% on band over US$408 |
| Over 720,000 (US$544) | 30% on all income over US$544 |
| Source: Global Property Guide | |
RENTAL INCOME
Rental income earned by residents from leasing out real properties is taxed at a final withholding rate of 10%. Rental income from residential houses is taxed only if the gross rent exceeds TZS500,000 (US$378).
RENTAL INCOME TAX |
|
| TAXABLE INCOME, TZS (US$) | MARGINAL TAX RATE |
| Up to 500,000 (US$378) | 0 |
| Over 500,000 (US$378) | 10% on all income over US$378 |
| Source: Global Property Guide | |
CAPITAL GAINS
Capital gains tax is levied on disposal of real properties. For residents, the capital gains tax rate is 10% and is levied on the net gains realized. Acquisition costs and expenses incurred in the selling of property are deducted from the gross selling price.
However, if the property was used as the resident’s own private residence for three years prior to the sale, capital gains are exempt up to TZS15 million (US$11,338).
PROPERTY TAX
Property Tax
Property tax is levied at flat rates by the municipal or city councils based on the size, use and location of the property. Property tax can run from TZS15,000 (US$11) to TZS75,000 (US$57).
Land Rent Tax
Lands held for purposes other than agricultural and pastoral, are taxed at the 11.5% or 12.5% of the economic value. Owners of lands are liable to pay this tax. Land is not taxed as property because all lands belong to the Tanzanian government; hence, land rent tax is imposed.
Tanzania - more data and information
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