The basis of taxation of individuals in Tanzania is residence. A person is deemed to be resident in Tanzania if they:
- Have a permanent home in Tanzania and have been in the country for any period of time during the year;
- Have been present in the country for more than 183 days during a year; and
- Have been present in the country for an aggregate period of 122 days in the year and the two preceding years.
Resident individuals are taxed at graduated scales with rates ranging from 14% to 30%. The first Tshs 135,000 per month (i.e. US$100) is tax free. Non-residents are subject to tax on their employment income at the rate of 15%, but pay 20% on their total income.
Resident individuals are subject to tax on their world wide income i.e. all income from Tanzania and from any other source in the world. Non-resident individuals are only subject to tax on income which has a source in Tanzania. A resident individual who has been resident in Tanzania for 2 years or less during his life, will only be subject to tax on income which has a source in Tanzania.
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