Tanzania Revenue Authority (TRA) is responsible for collecting most taxes in Tanzania. Local government authorities also have mandate to collect some taxes and charges. Taxes are made up of direct and indirect taxes. Direct taxes mainly refer to taxes on income while indirect taxes are on consumption and international trade.
Tax payment methods are withholding, installment and assessment. Generally, every person is required to pay tax on installment and on assessment.
The withholding method is only available to those who are required to withhold tax. These are :
- employers who make a payment that is to be included in calculating the chargeable income of an employee from the employment;
- persons paying investment returns (e.g. those paying dividends, interest, natural resource payment, rent or royalty);
- persons paying service fees and contract payments. However exceptions exist.