Free invoice generator and tax tools for Tanzania

A small business on the Tanzania Mainland deals mainly with the Tanzania Revenue Authority (TRA), which collects income tax, VAT, PAYE and the Skills Development Levy. Companies, trusts and branches of foreign companies pay corporate income tax at 30% of taxable profit, under paragraph 3 of the First Schedule to the Income Tax Act (Cap. 332). They pay quarterly instalments and file a final return within six months of the year end, even with no taxable income.

Sole traders below TSh 200 million of turnover usually pay presumptive income tax instead of keeping full accounts. Employers withhold PAYE, pay into the National Social Security Fund (NSSF) and the Workers Compensation Fund (WCF), and pay SDL once they have ten or more employees. VAT at 18% applies on the Mainland. Zanzibar runs its own VAT.

The latest reform is the Finance Act, 2026 (Act No. 2 of 2026), in force since 1 July 2026. It raised the presumptive-tax ceiling from TSh 100 million to TSh 200 million and gives first-time traders a year free of income tax. It also changed VAT withholding, stamp duties and excise rates.

The presumptive tax regime covers resident individuals whose only income is from a business in Tanzania with turnover of up to TSh 200 million a year (raised from TSh 100 million on 1 July 2026). The tax replaces income tax on profit, and there is no final return or audited accounts unless you opt out. Turnover up to TSh 4 million pays nothing. From TSh 4 million to 7 million you pay TSh 100,000, or 3% of turnover above TSh 4 million if you keep the records required by section 43 of the Tax Administration Act. From TSh 7 million to 11 million you pay TSh 250,000, or TSh 90,000 plus 3% above TSh 7 million with records. From TSh 11 million to 200 million you pay 4% of turnover. A trader taking a TIN to start a business for the first time can apply for a tax relief certificate giving twelve months of nil tax. The Commissioner decides within seven working days under the Presumptive Tax Relief for New Traders Regulations, 2026 (GN No. 158B). TRA refuses or revokes the relief for "chaining arrangements", such as re-registering a business in a spouse's, relative's or nominee's name.