Tax Compliance

TAX COMPLIANCE AND PROCEDURES
TO
ASSOCIATION OF TANZANIA EMPLOYERS
Presented by:
Rose Mahendeka
Manager Taxpayer Education
Tanzania Revenue Authority
July, 2019
TRA TANZANIA REVENUE AUTHORITY

COVERAGE
INTRODUCTION
COMPLIANCE ON
AND OVER VIEW
COMPLIANCE ON TIMELY RETURN
OF TAX
REGISTRATION FILLING
COMPLIANCE
COMPLIANCE ON
COMPLIANCE ON
OTHER IMPORTANT ACCURATE
TIMELY PAYMENTS
ISSUES DECLARATION AND
OF TAXES.
RECORD KEEPING

INTRODUCTION
Tanzania Revenue Authority administers Tax laws and
serves as general tax collection agency. The Revenue
collection responsibilities include assessing tax liability and
examination of financial statements, auditing and Tax
investigation for tax compliance. AssessingTaxliability
Examinationof F s
TRA VISION Auditing Taxinvestigate
"To increase Domestic Revenue through

enhancement of Voluntary Tax Compliance
MISSION STATEMENT
We make it easy to pay tax and make lives better
TRA TANZANIA REVENUE AUTHORITY 3
corporate1WHT ranee
INTRODUCTION VAT
1Tax
sDu
duty customs
Import
Tax laws administered by TRA for Compliance:
Tax Administration Act, Cap. 438 (For all taxes)
Income Tax Act, Cap. 332 ( Corporation, WHT,
PAYE)
Value Added Taxes Act, Cap 148 (VAT)
Vocational Education Training Act Cap 82 for (Skills
and Development Levy- SDL) Stamp Duty Act (Stamp
duty to authenticate transactions) and
East African Community Customs management Act,
2004 (Import duty)
OVER VIEW OF TAX COMPLIANCE
Taxpayer's Obligation
issueReceipts
Register All Accuracy Payment
Registration
Filing Returns
Accuracy of Returns
Timely Payment of Taxes
Issuance and demand of fiscalized receipts/Tax invoice
Other procedures
Cooperation with TRA Officers

TAX COMPLIANCE
Registration- (Section 22 of the TAA)

Application for Taxpayer Identification Number (TIN)
( refer the Tax Administration Act - TAA)
Apply within fifteen days from the date of commencing the
business
Applicant should have National Identity from NIDA
Issue of Taxpayer Identification Number TIN Certificate
(Section 23 of the TAA )

TA COMPLIANCE C
Registration for VAT Section 28
Taxable turnover attaining the registration threshold of 100 million
This condition applies to all types of registration except for:-
Mandatory registration
A person carries on an economic activity involving the supply of
professional services whether those professional services are provided
by the person, a member or employee of that person regardless of their
taxable turnover.
Government entity or institution which carries on economic activity
and;
An intending traders after fulfillment of sufficient evidence such as
contracts, tenders, building plans, business plans and bank financing.
Compulsory registration- CG upon satisfaction
TAX COMPLIANCE Cont...
VAT Registration process.
Application for VAT registration by filling form ITX245.02.E
VAT Registration Certificate.
Taxpayer shall be issued with a Certificate of Registration stating the
name and principal place of business of the taxable person, the date on
which the registration takes effect, his Taxpayer Identification
Number (TIN) and his VAT Registration Number (VRN).
A person shall indicate his TIN and his VRN in any return, notice of
appeal or other documents used for official VAT purposes and display
his certificate of registration in a conspicuous position at his principal
place of business.

TAX COMPLIANCE C
Electronic Fiscal Device (EFD)
VAT registered traders Mandatory
Non-VAT above Tshs. 14 million turnover per annum
Types of Electronic Fiscal Devices (EFDs)
Electronic Tax Register (ETR)
Electronic Fiscal Printer (EFP)
Electronic Signature Device (ESD)
Electronic Fuel Petrol Pump (EFPP)
Electronic fiscal device for Bureau de change

Amendments of the Value Added Tax Cap. 148
In Section 86 by adding at the end of subsection (2) the words

or any refund claim .
To extend clarity that the receipts that do not meet necessary
requirements mentioned under S. 86(1)(v) of the Act (i.e. the
name, address, Taxpayer Identification Number and value added
tax registration number of the customer) , shall not to be used
for the purpose of claiming for any refund by VAT registered
traders or any other person.

TA COMPLIANCE C
EFD OFFENCES - Any person who:-
Fails to acquire and use an EFD
Fails to issue fiscal receipt or fiscal invoice
Issues a fiscal receipt or fiscal invoice that is false or incorrect in any
material particulars,
Uses EFD in any manner that misleads the system or the Commissioner.
Upon conviction:- shall be liable to a fine not less than 200 currency points
and not more than 300 currency points or to imprisonment for a term not
exceeding three years or to both.
Person who fails to demand or report a denial of EFD receipt commits an
offence and shall be liable to a fine not less than 2 currency points and not
exceeding 100 currency points
Note: 1 Currency point is equivalent to TShs. 15,000/=
TAX RETURNS
Tax returns has the meaning as prescribed in the First
Schedule of the Tax Administration Act, Cap 438
In relation to income tax
Is a statement of tax withheld or treated as withheld filed
under S.84 of Income Tax Act
A statement of estimated tax payable filed under S.89 of the
Income Tax Act
A return of income filed under section 91 of the income tax
Act
In relation to Value Added Tax (VAT)
a return filed under S. 66 of VAT Act
I d c c . .
In relation to Vocational Education and Training

Levy (SDL)
a return filed under s. 16 of the Vocational Education and
Training Act
In relation to Gaming Tax.
a return filed under s. 31 of the Gaming Tax Act
In relation to Excise Duty
a return filed under s. 137of the Excise (Management and
Tariff ) Act

Tax Returns
Tax Return (sec 37 of TAA)

Individual (all returns) - signed by himself/herself
and declare that it is complete & accurate
Entity ( income tax) Signed by both Manager and
CPA who is in public practice declaring that the return
is complete and accurate
Entity (other taxes) Signed by a Manager

R C .
In relation to income tax
Is a statement of tax withheld or treated as withheld filed
under S.84 of Income Tax Act
Every withholding agent shall file with the
Commissioner within thirty days after the end of each
six-month calendar period a statement in the manner
and form prescribed specifying:-
payments made by the agent during the period that are
subject to withholding under Subdivision A;
the name and address of the withholdee;
income tax withheld from each payment; and any other
information
R C .
A statement of estimated tax payable filed under
S.89 of the Income Tax Act :
(a) in the case of a resident person who is conducting
Agricultural business - Section 88(5) by end of
September, of the year of income; and
(b) in any other case, by the date for payment of the

first tax installment an estimate of tax payable for the
year of income

R C .
A return of income filed under section 91 of the
Income Tax Act
(a) every person shall file with the Commissioner
not later than six months after the end of each year of
income a return of income for the year of income
(inclusive of financial statement).
(b) A return of income of a person for a year of
income shall, subject to any instructions by the
Commissioner to the contrary be in the manner and
form as prescribed.
R C .
In case of persons engaged in Petroleum operations
they shall furnish separate income tax returns for
each petroleum right conducted by the person.
Because each separate petroleum right is treated as
independent business.
In case of persons engaged in mining operations each
separate mining operation shall be treated as
independent business and the person must file a
return separate from any other activity of the person.

R C .
In relation to Value Added Tax (VAT)
a return filed under S.66 of VAT Act
The registered trader uses the figures in VAT account to
complete the VAT Return for the particular tax period.
There a en any rules on what a VAT account should look
like, but it must show:
the total VAT sales (Output tax)
total VAT purchases (Input tax)
the VAT payable to TRA
the VAT to reclaim from TRA (repayable)
Any adjustments either (increasing or decreasing adjustments)

DUE DATES AND PAYMENT
VAT Returns and Tax payment

Submit returns to TRA online or in paper form.
VAT is payable on or before 20th day of the following month of the
business
Note:
If the 20th day falls on the Saturdays, Sunday, or Public holiday the
return shall be lodge on the first working day following the Saturdays,
Sunday or Public day.

D E DATES AND PA MENT CON T
Income Taxes
Withholding taxes are payable within seven (7) days after the
end of calendar month;
Taxes payable in installments (Provisional assessed tax) payable
on quarterly basis e.g. in case of taxpayers whose accounting
periods ends on 30th December the installments shall be due by the
end of March, June, September and December.
Payments for other accounting dates are made at the end of every
quarter depending on ones accounting period.
Self-assessed tax is payable on the date of filling the final return
of income (6 months after the end of the year of income)

PA MENT OF TA ES (C )
Due dates for payment of duties and taxes

Income Taxes
Jeopardy assessed tax is payable on the date specified on
the notice of assessment
Adjusted assessed tax is payable within 30 days from the
date of assessment

R C .
In relation to Vocational Education and Training

Levy (SDL)
a return filed under s. 16 of the Vocational Education and
Training Act Cap 82
Every employer shall file a return with the Commissioner on
or before the 7th day of every month showing the total
gross monthly emoluments payable and levy thereto in
respect of the preceding month.
Also every employer shall file a return within thirty days after
the end of each six-month calendar period

R C .
In relation to Gaming Tax.
a return filed under s. 31 of the Gaming Act
Every person liable to pay gaming tax shall file a return with
the Commissioner on or before the 7th day of every month
and pay to the TRA the tax due in respect of the preceding
month.
In relation to Excise Duty
a return filed under s. 137of the Excise (Management and
Tariff ) Act
Monthly returns shall be submitted not later than the last
working day of the month following the month to which the
return relates
R C .
Other circumstances that will necessitates to file a return:
Bankruptcy, wound-up or liquidation
Reasonable grounds that a person is about to leave URT,
intends to cease carrying on activities in URT, has
committed an offence under tax laws
A person fails to maintain the adequate documentation as
required by the law
All of the above requirements shall be in
writing

Rates for withholding tax – Sec. 82
Category of payment To To Non -
resident resident
Dividend
Where payer is listed on DSM Stock Exchange 5% 5%
Where a resident Company holds 25% shares
or more 5% N/A
Dividend from other corporations
10% 10%
Interest 10% 10%
Rent
Land and buildings 10% 10%
Aircraft lease 10% 10%
Other assets N/A 15%
Natural resource payment 15% 15%
Royalties 15% 15%
Exemptions to Sec 82
Payments made by individuals unless made in conducting a
business;
Interest paid to a resident financial institution
Payments that are exempt amounts (Exempt payments
are expounded under the Second Schedule of the
ITA, 2004)
Rent paid to a resident person for the use of an asset other
than land or buildings or aircraft
Interest payable to a non-resident bank by a strategic investor

Withholding Tax on Goods & Services –
Sec. 83 and 83A
Tax is withheld on payments made in respect of:
Service Fee with a source in URT paid to a non resident
Service fee for provision of professional services paid to a resident person
Management and Technical Service Fee paid to a resident person by person

engaged in extractive industry (Mining, Oil and Gas)
Insurance premium with a source in URT paid to a non resident
Money transfer commission to a money transfer agent
Payments made for the supply of Goods to the Government or its

institutions whose budget is wholly or substantially financed by
the Government budget subvention

WHT on Professional services
“Professional Service means services rendered by a person

licensed as a practitioner by any recognized professional body and
shall include other services or activities of an independent business
character including consultancy, legal, architectural, engineering,
supervisory, accounting, auditing medical artistic, survey, theatrical
performance, sports, exhibition, private security services, private
investigation and consultancies in various disciplines or any
entertainment held or given other than those for remuneration under
contract of employment–Sec 83(3)

Rates for withholding tax – Sec. 83
Category of payment To To Non -
residen resident
t
Supply of Goods to government or its institution 2% N/A
whose budget is wholly or substantially financed by
the Government budget subvention
Service Fee 5% 15%
Management and Technical Service Fee (Mining, 5% 15%

oil and gas)
Money transfer commission 10% N/A
Insurance Premium 0% 5%

Exemptions to Sec 83
Payments made by individuals unless made in conducting a

business; or
Payments that are exempt amounts (Exempt payments

are expounded under the Second Schedule of the
ITA, 2004)
Note: WHT on local supplies of services is restricted to

professional services only (FA 2016)

Withholding Tax Base
Withholding Tax shall be computed on the amount exclusive
of VAT
Where services are provided and payments are made to the

withholdee in form of service fee and reimbursements then
the withholding tax base will be the full amount that is service
fee plus reimbursement amount.

Example 1
ABC Limited invoice in relation to Consultancy services
provided to Dar es Salaam City Council has the following
amount:
DESCRIPTION AMOUNT
Service Fee 10,000,000/=
VAT 1,800,000/=
Total 11,800,000/=
W/Tax will be charged on TSZ 10,000,000/=

W/Tax is 5%*10,0000,000/=
= 500,000/=
Example 2
FLG Consultants were hired by Kinondoni District Council to
carry consultancy work. The contract terms involved payment
of reimbursement expenses which were used for
accommodation in a 5 star hotel for 4 staff of FLG for 20 days
by the client. The contract price was quoted at TZS
150,000,000/= plus reimbursements. The Client Paid a total
of TZS 16,000,000/= as reimbursement expenses for
accommodation of FLG staff.

Example 2 - Cont…
Description Amount
Consultancy Fee 150,000,000/=
Reimbursements 16,000,000/=
Total 166,000,000/=
VAT 29,880,000
W/Tax Base
Consultancy fee 150,000,000/=
Reimbursements 16,000,000/=
W/Tax Base 166,000,000/
WHT = 166,000,000*5% = 8,300,000

Withholding Tax Base for Mixed
Supplies (Goods & Services)
If the invoice raised involves both supply of Goods and
Services, a separation must be made for value for Goods and
Services . However, if the separation is not done then the full
amount will be considered as supply for services

Example 3
XYZ was hired to conduct a Survey for Ministry of Education.

The contract involved also supply of Books and Stationeries
where there was a need. After completing the work, XYZ
raised an invoice with the following details
DESCRITION AMOUNT
Survey Fee 70,000,000/=
Books and Stationeries 30,000,000/=
VAT 18,000,000/=
Total 118,000,000/=

Example 3…Cont
W/Tax will be charged as follows:

W/Tax on Goods (2%*30,000,000/=)
= 600,000/=
W/Tax on Service (5%*70,000,000/=)
= 3,500,000/=
Note:
Failure to separate the figures in respect of the value for goods
and services attracts WHT at the rate of 5% on the entire
amount
(5%*100,000,000) = 5,000,000/=

Extension of time to file Tax Return
S. 39 of the TAA
A person who is required to file a tax return under a
tax law may apply to the CG for an extension of the
time.
The application shall be in writing within fifteen days
before the due date for filling the return
S. 55 Extension to pay- Apply to the CG in writing
The person will be served with a written notice of the
decision. However, the extension of filling the return
will alter the date of payment as per return.
The extension of time will not exceed 30 days.
Failure to file tax return on time
S.40 of the TAA

Failure to file tax return on time
Ineffective returns : Those returns that reach TRA
after the due date or in the specified time in the law.
The CG shall make an assessment of tax liability of

the person as required by the tax law, including by
way of adjusted assessment, and may use any
information in the CG possession

OTHER TAXES STAMP DUTY
Stamp Duty
Is levied on specific instruments or legal instruments or transactions,
that are executed in mainland Tanzania, or if executed outside mainland
Tanzania, relate to any property, thing or matter that is to be performed
in mainland Tanzania.
Applicable rate
On conveyance is 1% of consideration and conveyance
For agricultural land is Tshs. 500/=
Other legal and commercial instruments specific rate specified in the
schedule provided in the Stamp Duty Act Cap 189.
In order to facilitate availability of credit in the financial sector and
development of the stock market the maximum stamp duty rate for
registration of property for security or mortgage is Tsh. 10,000/= .
EXEMPTIONS
All exemptions are enshrined in the respective tax statutes.
(A) Income tax:
Sect. 10 of ITA
2nd Schedule to the Act
(b) VAT
Sect. 6 of the VAT Act
Schedule of exemption
- Part I- Supplies and Imports exempt from VAT
-Part II Imports exempt from VAT
(C) EACCMA
Fifth Schedule provide a list of exemptions institutions and goods
Import procedures for exempt goods are as explained in a sub title of Import
Procedures and in addition will require exemption documents;
(d) Other Taxes According to respective provisions in the law

Objections
A taxpayer has a right to object any tax decision
made by the officer. The taxpayer is required to
lodge objection in prescribed form within 30
days from the date of service of the tax decision.
(Sec. 51 of TAA)
A taxpayer with reasonable grounds that
hindered the filing of objection within time has a
right to apply for extension time to lodge an
objection (S.51 (2) of the Tax Administration
Act.) where by extension should not exceed a
period of thirty days
Objections….
The taxpayer is required to make payment of
undisputed tax or one third of the assessed tax on or
before the due date for lodging the objection. Where
the taxpayer has filed an objection without depositing
one third, the officer shall not admit the objection and
the objection shall be deemed to have not been filed.

Objections…..
Where a taxpayer files an objection and pay one
third or undisputed tax, the liability to pay the
remaining assessed tax will be suspended until the
objection is finally determined.

Objections….
Application for waiver
The law requires the tax payer to make an application
for waiver of payment of one third or undisputed tax
within fifteen days before expiration of the time limit
for lodging the notice of objection. Upon receiving the
application, the officer is required to determine the
application on or before expiration of time for lodging
objection.
Decision to refuse or grant waiver is a tax decision.
Therefore the taxpayer has a right to appeal against
office decision to refuse to grant waiver.

APPEAL AGAINST TAX DECISION
Revenue Appeal board
Where the taxpayer is aggrieved by an objection
decision may appeal to the Tax Revenue
Appeals Board.
A person who wishes to appeal shall issue to the
body a notice of intention to appeal within 30
days from the date which Commissioner General
issued decision

Tax Revenue Appeal Tribunal
Where the tax payer is aggrieved by an

objection decision may appeal to the Tax
Revenue Appeals Tribunal
Application shall be made within 30, days from the
date of the service of the decision and proceedings

Ta Re en e Appeal T ib nal
Also the aggrieved party shall serve the opposite party
the notice of intention to appeal within 15 days from
the date of the decision. The law requires a party who
wishes to appeal to issue a notice of intention to
appeal to the Tax Revenue Appeal Tribunal within 14
days from the date which decision was delivered

Appeal to the Court of Appeal
A party who is aggrieved by the decision of the
tribunal may appeal to the Tanzania Court of appeal
within 40 days from date of the decision and the
grounds of appeal should be only of matters of
laws Other procedures are provided in the Appellant
Jurisdiction Act and Court of Appeals Rules

Conclusion
Tax laws are quite fair and give a room for
taxpayers who did not accept assessed to make
objections
It is the right to all taxpayers to object tax
assessment when not agreed with the
assessment
Let us join our hands towards developing our
nation.
Toge her We B ild O r Na ion


Tax Compliance

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TAX COMPLIANCE AND PROCEDURES

TRA TANZANIA REVENUE AUTHORITY

TRA TANZANIA REVENUE AUTHORITY

"To increase Domestic Revenue through

TRA TANZANIA REVENUE AUTHORITY 5

Registration- (Section 22 of the TAA)

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In Section 86 by adding at the end of subsection (2) the words

TRA TANZANIA REVENUE AUTHORITY

In relation to Vocational Education and Training

TRA TANZANIA REVENUE AUTHORITY

Tax Return (sec 37 of TAA)

TRA TANZANIA REVENUE AUTHORITY

(b) in any other case, by the date for payment of the

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VAT Returns and Tax payment

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Due dates for payment of duties and taxes

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In relation to Vocational Education and Training

TRA TANZANIA REVENUE AUTHORITY 23

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Service fee for provision of professional services paid to a resident person

Management and Technical Service Fee paid to a resident person by person

Insurance premium with a source in URT paid to a non resident

Money transfer commission to a money transfer agent

Payments made for the supply of Goods to the Government or its

TRA TANZANIA REVENUE AUTHORITY

“Professional Service means services rendered by a person

TRA TANZANIA REVENUE AUTHORITY

Service Fee 5% 15%

Management and Technical Service Fee (Mining, 5% 15%

Money transfer commission 10% N/A

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Payments made by individuals unless made in conducting a

Payments that are exempt amounts (Exempt payments

Note: WHT on local supplies of services is restricted to

TRA TANZANIA REVENUE AUTHORITY

Where services are provided and payments are made to the

TRA TANZANIA REVENUE AUTHORITY

W/Tax will be charged on TSZ 10,000,000/=

TRA TANZANIA REVENUE AUTHORITY

TRA TANZANIA REVENUE AUTHORITY

TRA TANZANIA REVENUE AUTHORITY

XYZ was hired to conduct a Survey for Ministry of Education.

TRA TANZANIA REVENUE AUTHORITY

W/Tax will be charged as follows:

TRA TANZANIA REVENUE AUTHORITY

S.40 of the TAA

The CG shall make an assessment of tax liability of

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TRA TANZANIA REVENUE AUTHORITY

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Where the tax payer is aggrieved by an

TRA TANZANIA REVENUE AUTHORITY