Income Tax for Individuals

1. Individuals are categorized in two groups:

• individual traders who are under presumptive tax regime
• individual trader who are not under presumptive regime.

 a) individual traders who are under presumptive tax regime

Taxation of individual under presumptive regime is based on annual turnover. In this category individual are not required to file final return with audited books of accounts unless he/she elects to. This category consists of individuals who fulfills the following requirements:

1. the individual should be a resident for the year of income,
2. the individual's income for a year of income consists exclusively of income from a business having a source in the United Republic;
3. the turnover of the business does not exceed Tshs. 100 million: and
4. the individual does not elect to dis-apply the presumptive rules

Where a resident individual meets the above requirement for a year of income the individual's income tax payable for the year of income shall be equal to the amount of presumptive income tax provided in the below schedule;

Annual  turnover	Tax payable when records are incomplete	Tax payable when records are complete
Where turnovers does not exceed Tshs 4,000,000	NIL	NIL
Where turnover exceeds Tshs  4,000,000/= but does not exceed Tshs 7,000,000	Tshs 100,000/=	3% of the turnover in excess of Tshs 4,000,000/=
Where turnover exceeds Tshs 7,000,000/= but does not exceeds Tshs 11,000,000/=	Tshs 250,000/=	Tshs 90,000/= plus 3% of the turnover in excess of Tshs 7,000,000/=
Where turnovers exceed Tshs. 11,000,000/= but does not exceed Tshs. 100,000,000/=	3.5% of turnover

 b) individual traders who are no under presumptive tax regime

This category consists of individuals who do not fulfil the requirements of presumptive tax regime. Under this category individual pay tax basing on their taxable income for the year. The traders under this are required to keep proper records including filing of provisional returns on or before 30^th March. At the end of the year the individual under this category are required to file final return attaching the audited financial statements and submit it to TRA on or before 30 June of the following year to which the return relates.

The rates applicable under this category are as shown in the table below:

• For Tanzania Mainland

Monthly Taxable Income	Tax Rate
Where total Income does not exceed Tshs. 270,000/=	NIL
Where the total Income exceeds Tshs. 270,000/= but does not exceed Tshs. 520,000/=	8% of the amount in excess of the amount in excess of Tshs. 270,000/=
Where total Income exceeds Tshs. 520,000/= but does not exceed Tshs. 760,000/=	Tshs. 20,000/= plus 20% of the amount in excess of Tshs. 520,000/=
Where total Income exceeds Tshs. 760,000/= but does not exceed Tshs. 1,000,000/=	Tshs. 68,000/= plus 25% of the amount in excess of Tshs. 760,000/=
Where total Income exceeds Tshs. 1,000,000/=	Tshs. 128,000/= plus 30% of the amount in excess of Tshs. 1,000,000/=
Note: Threshold per annum: Annual Income of Tshs 3,240,000/= is not taxable

• For Zanzibar

Monthly Taxable Income	Tax Rate
Where total Income does not exceed Tshs. 270,000/=	NIL
Where the total Income exceeds Tshs. 270,000/= but does not exceed Tshs. 520,000/=	8% of the amount in excess of the amount in excess of Tshs. 270,000/=
Where total Income exceeds Tshs. 520,000/= but does not exceed Tshs. 760,000/=	Tshs. 20,000/= plus 20% of the amount in excess of Tshs. 520,000/=
Where total Income exceeds Tshs. 760,000/= but does not exceed Tshs. 1,000,000/=	Tshs. 68,000/= plus 25% of the amount in excess of Tshs. 760,000/=
Where total Income exceeds Tshs. 1,000,000/=	Tshs. 128,000/= plus 30% of the amount in excess of Tshs. 1,000,000/=
Note: Threshold per annum Annual Income of Tshs. 3,240,000 is not taxable

2. 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 31stMarch

On or before 30thJune

On or before 30thSeptember

On or before 31stDecember

Form: ITX200.01.E – Statement of Estimated assessment - Individual

• 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

Forms:  ITX201.01.E Return of Income – Individual

What records should be maintained by a taxpayer?

The Income Tax Act requires every individual who is liable to pay tax in the United Republic of Tanzania, to maintain all documents necessary to enable an accurate determination of the tax payable.

These documents shall be retained for a period of at least five years from the end of the year of income or years of income to which they are relevant, unless the Commissioner specifies otherwise by notice in writing.

Where any document is not written in an official language of the United Republic of Tanzania, the Commissioner may, by notice in writing, require the taxpayer to provide an official translation of communication or document within fourteen days, at the individual’s expense, a translation into an official language is done by a translator approved by the Commissioner in the notice.

What are the contents of return form?

The return form consists of seven pages and there are other supplementary pages for calculation of the following types of income and gains:

• Gains from realization of shares and securities in a corporation,
• Gains from realization of assets excluding shares, securities or trading stock,
• Repatriated income of an individual’s domestic permanent establishment,
• Income from general insurance business,
• Income from life insurance business
• Income from mining operations

Submitting the return

• Completing the figures in the return

Do not include cents – round down revenue figures, and round up tax credits and tax deductions to the nearest shilling.

• Submitting the return

Do not delay submitting the return to TRA, even if you do not have all the information you need. Where some of the information is missing estimate the amount and indicates which information is estimated at the time of filing that needs confirmation.