Tanzania

Individual - Income determination

Last reviewed - 22 November 2019

Employment income

Income from employment includes cash emoluments and the value of benefits in kind (generally the market value). There are special rules for taxing the provision of residential accommodation, motor vehicles, and preferential loans, as set out below.

Housing benefit

Housing benefit is the lower of:

  • market value rental of the premises, and
  • the higher of the following: (i) 15% of the employee’s total annual income (excluding housing benefit) and (ii) the expenditure claimed as a deduction by the employer in respect of the premises.

Quantification of car benefits

Car benefit is taxed on the following annual values:

Engine size Vehicle less than 5 years old (TZS) Vehicle more than 5 years old (TZS)
Not exceeding 1000cc 250,000 125,000
Above 1000cc but not exceeding 2000cc 500,000 250,000
Above 2000cc but not exceeding 3000cc 1,000,000 500,000
Above 3000cc 1,500,000 750,000


No benefit is assessable in respect of the car where the employer does not claim a deduction in respect of the ownership, maintenance, or operation of the vehicle.

Preferential loans

The statutory interest rate is determined by the prevailing rate as provided by the Central Bank. This is the rate to consider in assessing any taxable benefit in relation to preferential loans.

Business income

For individuals with annual turnover exceeding TZS 100 million, refer to Taxes on corporate income in the Corporate summary for calculation of tax on income from business. For those with annual turnover of TZS 100 million or less, specific presumptive rates apply.

Capital gains

The realisation of an investment asset (e.g. shares and securities, land, buildings) is a taxable event for income tax purposes. Where there is a disposal of an investment, then in arriving at the taxable ‘net gains’ a deduction can be claimed in relation to various costs, including costs in relation to acquisition, improvement, and disposal.

Relevant exemptions include:

  • Private residence, provided the gain is TZS 15 million or less.
  • Agricultural land, provided the market value is TZS 10 million or less.
  • Shares listed on the Dar es Salaam stock exchange and held by a resident.
  • Shares held by a non-resident if the shareholding is less than 25%.

Dividend income

Dividend income is subject to tax by way of WHT, which is a final tax.  The normal rate is 10%, but a reduced 5% rate applies to dividends paid by listed companies.

Dividend income from non-resident companies is subject to tax at a rate of 10% if paid to a resident individual (and not in the nature of business income).  A tax credit can be claimed for foreign income tax on the dividend.

Interest income

Interest paid to an individual (unless the interest is in the nature of business income to the individual) is treated as a ‘final withholding payment’, whereby the WHT is a final tax.

Rental income

Rent on land and buildings paid to a resident individual (unless the rent is received in the course of conducting a business) is treated as a ‘final withholding payment’, whereby the WHT is a final tax.