Tax Figures
Corporate Income Tax
30% on taxable profits
Income Tax Rate
Up to TZS 1,620,000: 0%
TZS 1,620,001 – TZS 4,320,000: 14%
TZS 4,320,001 – TZS 6,480,000: 20%
TZS 6,480,001 – TZS 8,640,000: 25%
Over TZS 8,640,001: 30%
Sales Tax
VAT: 18%
Withholding Tax
10% on interest income
Other Tax
Property Tax: 0.15%, calculated on property annual average net book value.
Time to prepare and Pay Taxes
195 hours
Payroll
In 2015, Tanzania made paying taxes more complicated for companies by introducing an excise tax on money transfers. On the other hand, it made paying taxes less costly by reducing the rate of the skill and development levy.
Remote Payroll
A remote payroll system is where a foreign company, i.e. a non-resident company, payrolls a resident employee in Tanzania. Under Tanzanian Law, companies registered in other countries are allowed to obtain a license to do business and have employees in the country.
Local Payroll Administration
In some cases, a company will register their business in Israel under one of the forms available: Sole Proprietorship, Private Limited liability companies (LLCs), Public Limited liability companies, Partnerships and Branches and representative offices; but prefer to have another company administering its payroll.
This can be accomplished through a payroll provider. It is important to note that the company, as the Employer of Record, is still fully responsible for compliance with employment, immigration, tax and payroll regulations. But the payroll calculations, payments and filings can all be outsourced to the payroll provider.
Internal Payroll
Larger companies with a commitment to Tanzania may wish to run their own local payroll for all employees, foreign and local. In order to accomplish this, they will have to complete incorporation, register the business and then hire the necessary staff. There will be a need for in country human resources personnel who have the background needed to manage a Tanzanian payroll, and can fulfil all tax, withholding, and payroll requirements.
This approach carries significant cost and requires some knowledge of local employment and payroll regulations. The company will need a local accounting firm and potentially legal counsel to ensure full compliance with Israeli employment laws.
Setting up payroll in Tanzania
Currency
TZS (0.004 USD)
Employee Information Required
The only information that is required for setting up a new start is the employee’s personal data.
A new employee must be registered with the authorities within 80 days from the start date of employment, in which the company has to present its structure to the SII and await authorization to start operations.
The following information is required to set up a new start:
- Full Name
- RUT
- Date of Birth
- Address
- Salary
- Pension Insurance
- Health Insurance
- Other information about hiring
Tax Registration Requirements
When an employee first starts employment with a company they must be registered with the TRA (Tanzania Revenue Authority), and the pension scheme.
TRA will provide a TIN (Tax Identification Number) and the pension scheme will also provide a scheme number. All registrations must be made within the first month for the new start commencing work.
Social Security Registration
NSSF (National Social Security Fund) is deductible from employee (10% of gross) with the employer paying the same amount on the employee’s behalf. Submissions to the NSSF authority are to be made within one month after the month of deduction.
Skills Levy: Employer is to pay 5% of the gross on behalf of the employee.
Payment Mode
An employer shall pay to an employee any monetary remuneration to which the employee is entitled in cash, unless the employee agrees otherwise, in which case the payment shall be made either by check payable to the employee; or direct deposit into an account designated by the employee in writing.
Minimum Wage
Minimum Wages in Tanzania vary according to the business area. For a detailed list it is possible to consult AfricaPay.
