A Tanzanian resident is taxed on worldwide income, irrespective of source. Non-residents are taxable on income with a source in Tanzania.
Income tax is charged at a rate of 30% on income of a resident corporation and of a permanent establishment (PE) of a non-resident corporation or 5% of turnover for technical and management service providers to mining, oil, and gas entities (deducted by way of WHT). Certain payments to non-residents are subject to tax at the relevant non-resident WHT rates (see the Withholding taxes section for the relevant rates).
Small-scale miners are subject to 5% final WHT on the market value of minerals.
Gain from the disposal of investments in Tanzania is subject to income tax where such investments fall within the source rules, and, in such a case, the gain will be taxed at a rate of 30%.
Reduced rate for newly listed companies
A reduced CIT rate of 25% applies for three consecutive years for companies newly listed on the Dar es Salaam Stock Exchange (DSE). To qualify, at least 30% of the company's shares must be issued to the public.
Reduced rate for specific persons
Reduced CIT rates apply as follows:
- 10% CIT applies to new assemblers of vehicles, tractors, and fishing boats for the first five years from commencement of operations.
- 20% CIT applies to new manufacturers of pharmaceutical or leather products who have a performance agreement with the Tanzanian government for the first five years from commencement of operations.
Alternative minimum tax (AMT)
AMT applies at a rate of 0.5% to the turnover of companies with perpetual unrelieved tax losses for the current and preceding two income years. Exemption applies to (i) agricultural companies and (ii) companies engaged in provision of health or education.
Local income taxes
There are no local income taxes levied by local authorities. Please see Local taxes in the Other taxes section for a description of the local service levy based on turnover.