The Income Tax Act

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CHAPTER 332
THE INCOME TAX ACT
[PRINCIPAL LEGISLATION]
Arrangement of Sections
Section Title
part i
PRELIMINARY PROVISIONS
1. Short title.
2. Application.
3. Interpretation.
part ii
IMPOSITION OF INCOME TAX
4. Charge of tax.
part iii
INCOME TAX BASE
Division I: Calculating the Income Tax Base
Subdivision A: Total Income
5. Total income.
Subdivision B: Chargeable Income
6. Chargeable income.
7. Income from employment.
8. Income from business.
9. Income from investment.
Subdivision C: Exemption from Tax
10. Minister may exempt income from tax.
Subdivision D: Deductions
11. General principles of deductions.
12. Interest.
13. Trading stock.

ion from Tax
10. Minister may exempt income from tax.
Subdivision D: Deductions
11. General principles of deductions.
12. Interest.
13. Trading stock.

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546
14. Repair and maintenance expenditure. 15. Agriculture improvement, research development and environmental
expenditure. 16. Gifts to public, charitable and religious institutions. 17. Depreciation allowances for depreciable assets. 18. Losses on realisation of business assets and liabilities. 19. Losses from business or investment. Division II: Rules Governing Amounts Used in Calculating the Income Tax Base
Subdivision A: Tax Accounting and Timing
20. Year of income. 21. Basis of accounting for income tax purposes. 22. Cash basis accounting. 23. Accrual basis accounting. 24. Claim of right. 25. Reverse of amounts including bad debts. 26. Long-term contracts. Subdivision B: Quantification, Allocation and Characterisation of Amounts
27. Quantification according to market value. 28. Quantification in shillings. 29. Indirect payments. 30. Jointly owned investment. 31. Compensation and recovery payments. 32. Annuities, instalment sales and finance leases. 33.

. 29. Indirect payments. 30. Jointly owned investment. 31. Compensation and recovery payments. 32. Annuities, instalment sales and finance leases. 33.

Transfer pricing and other arrangements between associates. 34. Income splitting. 35. Repealed. Division III: Assets and Liabilities
Subdivision A: Central Concepts
36. Calculation of gains and losses. 37. Cost of asset. 38. Incomings for asset. 39. Realisation. 40. Application of this Division to liabilities. 41. Reverse, quantification and compensation for costs and incomings. Subdivision B: Special Rules
42. Realisation with retention of asset. 43. Transfer of asset to spouse or former spouse.

ation for costs and incomings. Subdivision B: Special Rules
42. Realisation with retention of asset. 43. Transfer of asset to spouse or former spouse.

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THE INCOME TAX ACT [CAP. 332 R.E. 2023]
44. Transfer of asset to associate or for no consideration. 45. Involuntary realisation of asset with replacement. 46. Realisation by separation. 47. Apportionment of costs and incomings. part iv
RULES APPLICABLE TO PARTICULAR TYPES OF PERSONS
Division I: In General
Subdivision A: Partnerships
48. Principles of taxation. 49. Partnership income or loss. 50. Taxation of partners. 51. Cost and incomings of partner’s membership interest in partnership. Subdivision B: Trusts
52. Taxation of trusts. Subdivision C: Corporations
53. Taxation of corporations. 54. Taxation of shareholders. Division II: General Provisions Applicable to Entities
55. Asset dealings between entities and members. 56. Change in control. 57. Income or dividend stripping. part v
SPECIAL INDUSTRIES
Division I: Insurance Business
58. General insurance business. 59. Life insurance business. 60. Proceeds from insurance. Division II: Retirement Savings
61. Retirement contributions to approved retirement fund. 62. Taxation of retirement funds. 63.

oceeds from insurance. Division II: Retirement Savings
61. Retirement contributions to approved retirement fund. 62. Taxation of retirement funds. 63.

Retirement payments.

Retirement payments.

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548
Division III: Charitable Organisations, Clubs and Trade Associations
64. Charitable organisations. 65. Clubs and trade associations. Division IV: Minerals
Subdivision A: Prospecting and Mining
66. Application of subdivision. 67. Principles of taxation. 68. Separate mining operations. 69. Income from mining operations. 70. Deduction for mining operations. 71. Losses from mining operations. 72. Bonus payments. 73. Realisation of mineral rights. 74. Rehabilitation fund. Subdivision B: Processing, Smelting and Refining
75. Licensee conducting processing, smelting or refining. Division V: Petroleum
Subdivision A: Petroleum Operations
76. Principles of taxation. 77. Separate petroleum rights. 78. Income from petroleum rights. 79. Deductions for petroleum rights. 80. Losses from petroleum rights. 81. Bonus payments. 82. Realisation of petroleum rights. 83. Decommissioning funds. Subdivision B: Midstream and Downstream Activities
84. Midstream and downstream activities. Division VI: Transportation
85. Repealed.

issioning funds. Subdivision B: Midstream and Downstream Activities
84. Midstream and downstream activities. Division VI: Transportation
85. Repealed.

part vi
INTERNATIONAL
Division I: Residence and Source
86. Resident persons. 87. Source of income and loss.

part vi
INTERNATIONAL
Division I: Residence and Source
86. Resident persons. 87. Source of income and loss.

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THE INCOME TAX ACT [CAP. 332 R.E. 2023]
88. Source of directly included and deducted amounts. 89. Source of payments. 90. Income accruing or arising in United Republic. Division II: Permanent Establishments
91. Principles of taxation. 92. Calculating income of permanent establishment. 93. Repatriated income of domestic permanent establishment. Division III: Controlled Foreign Trusts and Corporations
94. Principles of taxation. 95. Unallocated income of controlled foreign trust and corporation. 96. Taxation of members of controlled foreign trusts or corporations. 97. Cost and incomings of member’s interest in controlled foreign trust
or corporation. Division IV: Foreign Tax Relief
98. Foreign tax relief. 99. Tax credit for business or investment operating in both Mainland Tanzania and
Tanzania Zanzibar. part vii
TAX PAYMENT PROCEDURE
Division I: General Obligations
100. Types of tax and methods of payment. 101. Time for payment of tax. 102-103. Repealed. Division II: Income Tax payable by Withholding
Subdivision A: Withholding Obligations
104.

f payment. 101. Time for payment of tax. 102-103. Repealed. Division II: Income Tax payable by Withholding
Subdivision A: Withholding Obligations
104.

Withholding by employers. 105. Withholding from investment returns. 106. Withholding from service fees and contract payments. 107. Withholding of income tax for goods. 108. Repealed. Subdivision B: Procedure Applicable to Withholding
109. Statements and payments of tax withheld or treated as withheld. 110. Withholding certificates. 111. Final withholding payments. 112. Credit for non-final withholding tax.

nts of tax withheld or treated as withheld. 110. Withholding certificates. 111. Final withholding payments. 112. Credit for non-final withholding tax.

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Division III: Income Tax Payable by Instalment
113. Payment of income tax by quarterly instalment.
114. Statement of estimated tax payable.
115. Single instalment at time of realisation or receipt.
116. Tax payment on income realised through digital market place.
Division IV: Income Tax Payable on Assessment
Subdivision A: Returns
117. Returns of income.
118. Return of income not required.
119. Repealed.
Subdivision B: Assessments
120. Self-assessment.
121–153. Repealed.
part x
ADMINISTRATION
Official Documentation and Registration
154. International agreements.
155. Regulations.
156–166. Repealed.
part xi
TRANSITIONAL PROVISIONS
167. Repeal.
168. Transition.
169. Agreements and certificates for fiscal stability.
170. Assets and liabilities.
171. Repealed.
SCHEDULES

PROVISIONS
167. Repeal.
168. Transition.
169. Agreements and certificates for fiscal stability.
170. Assets and liabilities.
171. Repealed.
SCHEDULES

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PART I
PRELIMINARY PROVISIONS
1. This Act may be cited as the Income Tax Act. 2. This Act shall apply to Mainland Tanzania as well as Tanzania
Zanzibar. 3. In this Act, unless the context requires otherwise-
“adjusted assessment” means an assessment adjusted in
accordance with section 59 of the Tax Administration
Act;
“agent of a non-resident person or of a beneficial owner”
includes any person in the United Republic-
(a) who is employed by or on behalf of a non-resident
person or a beneficial owner;
(b) who has any business connection with a non-resident
person or a beneficial owner;
Short title
Application
Interpretation
Acts Nos. 13 of 2008 s. 13
8 of 2012 s. 19
4 of 2013 s. 18
2 of 2014 s. 32
10 of 2015 s. 113
2 of 2016 s. 17
4 of 2017 s. 17
7 of 2017 s. 32A
4 of 2018 s. 23
8 of 2020 s. 25
3 of 2021 s. 20
5 of 2022 s. 59
Cap. 438
Cap. 438
CHAPTER 332
THE INCOME TAX ACT
An Act to make provisions for the charge, assessment and collection of
Income Tax, for the ascertainment of the income to be charged and for
matters incidental thereto.

visions for the charge, assessment and collection of
Income Tax, for the ascertainment of the income to be charged and for
matters incidental thereto.

[1st July, 2004]
[s.1]
Acts Nos. 11 of 2004
15 of 2004
13 of 2005
6 of 2006
16 of 2007
1 of 2008
13 of 2008
14 of 2009
15 of 2010
5 of 2011
8 of 2012
4 of 2013
2 of 2014
10 of 2015
15 of 2015
23 of 2015
2 of 2016
2 of 2017
4 of 2017
7 of 2017
4 of 2018
6 of 2019
8 of 2019
8 of 2020
3 of 2021
10 of 2021
5 of 2022
9 of 2022
7 of 2023

of 2015
23 of 2015
2 of 2016
2 of 2017
4 of 2017
7 of 2017
4 of 2018
6 of 2019
8 of 2019
8 of 2020
3 of 2021
10 of 2021
5 of 2022
9 of 2022
7 of 2023

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2023]
552
(c) from or through whom a non- resident person or a
beneficial owner is in receipt of any income, whether
directly or indirectly; or
(d) who is a trustee of a non-resident person, and includes
any other person who, whether a resident or non-
resident, has acquired by means of a transfer, a capital
asset situated in the United Republic;
“alternative financing arrangement” means any financial
arrangement approved by the Bank of Tanzania other
than the conventional financial arrangements;
“amount derived” means a payment received by a person or
that the person is entitled to receive;
“an entity of a public character” means an entity established
and functions solely for a public purpose and which
operates in such a way that-
(a) its membership is open to the general public or an
identifiable group of a community with common
interests;
(b) it operates for purposes other than deriving profit or
gain;
(c) it does not allow any distribution or deemed distribution
of profit generated out of its charitable business; and
(d) its profit is ploughed back and used solely for improving
or expansion of the original charitable purpose or
function;
“approved retirement fund” means a resident retirement
fund having a ruling under section 11 of the Tax
administration Act;
“arrangement” includes an action, agreement, course of
conduct, dealing, promise, transaction, understanding or
undertaking, whether express or implied, whether or not
enforceable by legal proceedings and whether unilateral
or involving more than one person;
“assessment” means an assessment made in terms of sections
120 of this Act or sections 57, 58, 59 or 92 of the Tax
Administration Act;
Cap.438

person;
“assessment” means an assessment made in terms of sections
120 of this Act or sections 57, 58, 59 or 92 of the Tax
Administration Act;
Cap.438

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THE INCOME TAX ACT [CAP. 332 R.E.

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THE INCOME TAX ACT [CAP. 332 R.E.

2023]
“asset” means a tangible or intangible asset and includes
currency, goodwill, know-how, property, a right to
income or future income and a part of an asset;
“associate” in relation to a person, means another person
where the relationship between the two is-
(a) that of an individual and a relative of the individual,
unless the Commissioner is satisfied that it is not
reasonable to expect that either individual will act in
accordance with the intentions of the other;
(b) that of partners in the same partnership, unless the
Commissioner is satisfied that it is not reasonable to
expect that either person will act in accordance with
the intentions of the other;
(c) that of an entity and-
(i) a person who-
(aa) either alone or together with an associate or
associates under another application of this
definition; and
(bb) whether directly or through one or more
interposed entities,
controls or may benefit from 25 percent or more of the rights
to income or capital or voting power of the entity, except that
the Commissioner may, upon consideration of the nature of
business or investment of a person, determine the prescribed
minimum percentage; or
(ii) under another application of this definition, is an
associate of a person to whom subparagraph (i)
applies; or
(d) in any case not covered by paragraphs (a) to (c), such
that one may reasonably be expected to act, other than
as employee, in accordance with the intentions of the
other whether or not they are in a business relationship
and whether such intentions are communicated or not;
“banking business” means business of a financial institution
approved under the Banking and Financial Institutions Act;Cap.

s are communicated or not;
“banking business” means business of a financial institution
approved under the Banking and Financial Institutions Act;Cap.

342

342

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2023]
554
“beneficial owner” means a natural person-
(a) who directly or indirectly ultimately owns or exercises
substantial control over an entity or an arrangement;
(b) who has a substantial economic interest in or receives
substantial economic benefit from an entity or an
arrangement directly or indirectly whether acting
alone or together with other persons;
(c) on whose behalf a transaction or arrangement is
conducted; or
(d) who exercises significant control or influence over a
person or arrangement through a formal or informal
agreement;
“business” includes-
(a) a trade, concern in the nature of trade, manufacture,
profession, vocation or isolated arrangement with a
business character;
(b) a transaction or activity carried out through the internet
or an electronic means including an electronic service
or transaction conducted in the digital market place
regardless of the manner in which such transaction is
carried out; and
(c) a past, present or prospective business, but excludes
employment;
“business asset” means an asset to the extent to which it
is employed in a business and includes a membership
interest of a partner in a partnership but excludes-
(a) trading stock or a depreciable asset;
(b) an interest in land held by an individual that has a
market value of less than ten million shillings at the
time it is realised and that has been used for agricultural
purposes for at least two of the three years prior to
realisation;
(c) the beneficial interest of a beneficiary in a resident
trust;
(d) shares in a corporation where receipt of a dividend
in respect of the shares is exempt in the hands of the
shareholder under section 54(2); and

t;
(d) shares in a corporation where receipt of a dividend
in respect of the shares is exempt in the hands of the
shareholder under section 54(2); and

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THE INCOME TAX ACT [CAP. 332 R.E.

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THE INCOME TAX ACT [CAP. 332 R.E.

2023]
(e) shares and securities listed on the Dar es Salaam Stock
Exchange that are owned by a resident person or by a
non-resident person who either alone or with other
associates controls less than twenty five percent of the
controlling shares of the issuer company;
“business connection” includes any business activity carried
out through a person who, acting on behalf of the non-
resident person or a beneficial owner-
(a) has and habitually exercises in the United Republic, an
authority to conclude contracts on behalf of the non-
resident person or a beneficial owner;
(b) habitually concludes contracts or plays the principal
role leading to conclusion of contracts by that non-
resident person or a beneficial owner, and the contracts,
whether or not in the name of the non-resident person
or the beneficial owner, are-
(i) for the transfer of the ownership of, or for the
granting of the right to use property owned by
that non-resident person, or that non-resident
person has the right to use; or
(ii) for the provision of services by the non-resident
person or the beneficial owner;
(c) has no such authority but habitually maintains in the
United Republic a stock of goods or merchandise from
which he regularly delivers goods or merchandise on
behalf of the non- resident person or the beneficial
owner;
(d) habitually secures orders in the United Republic,
mainly or wholly for the non-resident person or for
that non-resident person and other non-resident
persons controlling, controlled by, or subject to the
same common control as that non-resident person, or
for the beneficial owner; or
(e) carries out any business or investment in the United
Republic through an entity or an arrangement for
economic benefit of a non-resident person or beneficial
owner, whether directly or indirectly;

United
Republic through an entity or an arrangement for
economic benefit of a non-resident person or beneficial
owner, whether directly or indirectly;

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2023]
556
“capitalisation of profits” by an entity, includes a capitalisation
by way of issuing bonus, membership interests or
increasing the amount paid upon membership interests
in the entity or otherwise crediting profits to a capital or
premium account of the entity;
“certified public accountant in public practice” has the
meaning ascribed to it by the Accountants and Auditors
(Registration) Act;
“chargeable income” has the meaning ascribed to it by
section 6;
“charitable organisation” has the meaning ascribed to it by
section 64;
“Class of depreciable assets” means a class determined in
accordance with the provisions of paragraph 1 of the
Third Schedule;
“Commission” means the Commission of Minerals
established under section 22 of the Mining Act;
“Commissioner” means the Commissioner General
appointed under the Tanzania Revenue Authority Act;
“commuted pension” means a payment received by an
individual on retirement of the individual for the
surrender of at least half of the individual’s pension rights
in respect of a retirement fund;
“corporation” means any company or body corporate
established, incorporated or registered under any
law in force in the United Republic or elsewhere, an
unincorporated association or other body of persons, a
Government, a political subdivision of a Government, a
public authority, public institution, public international
organisation and a unit trust but does not include
partnership;
“consumption expenditure” has the meaning ascribed to it
by section 11;
“controlled foreign trust” and “controlled foreign
corporation” means a non-resident trust or corporation
in which a resident person owns a membership interest,
Cap.

eign trust” and “controlled foreign
corporation” means a non-resident trust or corporation
in which a resident person owns a membership interest,
Cap.

286
Cap. 123
Cap. 399

286
Cap. 123
Cap. 399

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THE INCOME TAX ACT [CAP. 332 R.E.

2023]
whether directly or indirectly through one or more
interposed non-resident entities, and where-
(a) the person is associated with the trust or corporation; or
(b) there exist between one and four other resident persons
which, if associated with the person, would cause the
person to be associated with the trust or corporation;
“cost of an asset” has the meaning ascribed to it by
section 37;
“debt claim” means an asset representing a right of one
person to receive a payment from another person and
includes a deposit with a financial institution, account
receivable, note, bill of exchange or bond;
“decommissioning fund” with respect to petroleum operations
means a fund established under the Petroleum Act;
“debt obligation” means the obligation corresponding to a
debt claim;
“dependant of an individual” with respect to a year of
income, means a relative of the individual who has
total income that does not exceed two hundred fifty
thousand shillings and receives substantial support from
the individual during the whole year of income for the
necessities of life;
“depreciable asset” means an asset employed wholly and
exclusively in the production of income from a business,
and which is likely to lose value because of wear and tear,
obsolescence or the passage of time but excludes goodwill,
mineral or petroleum rights and other interest in land, a
membership interest in an entity and trading stock;
“depreciation basis” at the end of a year of income with
respect to a pool of depreciable assets, has the meaning
ascribed to it by paragraph 3 of the Third Schedule;
“development area” has the meaning ascribed to it under the
Petroleum Act;
“development licence” has the meaning ascribed to it under
the Petroleum Act;
Cap.

pment area” has the meaning ascribed to it under the
Petroleum Act;
“development licence” has the meaning ascribed to it under
the Petroleum Act;
Cap.

392
Cap. 392

392
Cap. 392

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558
“development operations” has the meaning ascribed to it
under the Petroleum Act;
“digital market place” means a platform which enables direct
interaction between buyers and sellers of electronic
services;
“distribution” by an entity:
(a) means-
(i) a payment made by the entity to any of its
members, in any capacity to the extent that the
amount of the payment exceeds the amount of
any payment made by the member to the entity in
return for the entity’s payment;
(ii) any re-investment of dividends which enhances
the value of shares; or
(iii) any capitalisation of profits;
(b) includes a payment made by the entity to one of its
members on cancellation, redemption or surrender
of a membership interest in the entity, including as a
result of liquidation of the entity or as a result of the
entity purchasing a membership interest in itself;
(c) excludes a payment of the type referred to in paragraph
(a) (i) or (b)-
(i) to the extent to which the payment is directly
included in calculating the member’s income or
in calculating a final withholding payment, other
than by reason of being a distribution; and
(ii) without limiting any amount treated as a
distribution by paragraph (a)(ii), that consists of
the issue of further membership interests in the
entity to the entity’s members in approximate
proportion to the members’ existing rights to
share in dividends of the entity; and
(d) in the case of a controlled foreign trust or corporation,
is interpreted in accordance with section 96;
“dividend of an entity” means a distribution by the entity to
the extent that it is not a repayment of capital;
Cap.

ed in accordance with section 96;
“dividend of an entity” means a distribution by the entity to
the extent that it is not a repayment of capital;
Cap.

392

392

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THE INCOME TAX ACT [CAP. 332 R.E.

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“domestic asset” means-
(a) an asset owned by a resident person (other than
foreign land or buildings or an asset held by a foreign
permanent establishment of the person) or held by a
domestic permanent establishment;
(b) an interest in land or a building situated in the United
Republic; and
(c) shares in a resident corporation whether the owner of
the shares together with associates controls or within
the previous five years controlled, either directly or
indirectly, twenty-five percent or more of the voting
power in the corporation;
“domestic liability” means a liability owed by a resident
person, other than a liability attributable to a foreign
permanent establishment of the person, or attributable to
a domestic permanent establishment;
“domestic permanent establishment” means all permanent
establishments of a non-resident individual, partnership,
trust or corporation situated in the United Republic;
“downstream activities” has the meaning ascribed to it under
the Petroleum Act;
“electronic service” has the meaning ascribed to it under
section 51 of the Value Added Tax Act;
“employee” means an individual who is the subject of an
employment conducted by an employer;
“employer” means a person who conducts, has conducted
or has the prospect of conducting the employment of an
individual;
“employment” means-
(a) a position of an individual in the employment of
another person;
(b) a position of an individual as manager of an entity
other than as partner of a partnership;
(c) a position of an individual entitling the individual to a
periodic remuneration in respect of services performed; or
(d) a public office held by an individual, and includes a
past, present and prospective employment;
Cap.

neration in respect of services performed; or
(d) a public office held by an individual, and includes a
past, present and prospective employment;
Cap.

392
Cap. 148

392
Cap. 148

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2023]
560
“entity” means a partnership, trust or corporation;
“entity of a public character” means an entity established and
functions solely for a public purpose and which operates
in such a way that-
(a) its membership is open to the general public or an
identifiable group of a community with common
interests;
(b) it operates for purposes other than deriving profit or
gain;
(c) it does not allow any distribution or deemed distribution
of profit generated out of its charitable business; and
(d) its profit is ploughed back and used solely for improving
or expansion of the original charitable purposes or
function;
“excluded expenditure” has the meaning ascribed to it by
section 11;
“exempt amount” means an amount exempt from income
tax by reason of sections 10, 52, 60 or 63;
“exploration area” has the meaning ascribed to it under the
Petroleum Act;
“exploration licence” has the meaning ascribed to it under
the Petroleum Act;
“exploration operations” has the meaning ascribed to it
under the Petroleum Act;
“farm-out arrangement” with respect to a mineral right
or a petroleum right includes an arrangement for the
transfer of part of the right in return for consideration
that includes in whole or in part an obligation on the part
of the transferee to meet a disproportionate amount of
future expenditure with respect to mineral operations
or petroleum operations conducted with respect to the
right, as the case requires;
“financial cost” means any amount payable under a financial
instrument or a loss from the realisation of a financial
instrument, includes the payment of interest but excludes
a distribution by an entity;
Cap.

l
instrument or a loss from the realisation of a financial
instrument, includes the payment of interest but excludes
a distribution by an entity;
Cap.

392
Cap. 392
Cap. 392

392
Cap. 392
Cap. 392

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2023]
“final withholding payment” has the meaning ascribed to it
by section 111;
“financial institution” means a bank or financial institution
approved under the Bank of Tanzania Act or the Banking
and Financial Institutions Act;
“foreign currency debt claim” means a debt claim that
is denominated in a currency other than Tanzanian
shillings;
“foreign income tax” means income tax imposed by a foreign
country and includes a final withholding tax or branch
profits tax imposed by a foreign country;
“foreign permanent establishment” means all permanent
establishments of an individual, partnership, trust or
corporation that are situated in any one country that is
not the country in which the individual, partnership,
trust or corporation is resident but excludes a domestic
permanent establishment;
“foreign source” means an amount that is not treated as
having a source in the United Republic by section 87, 88
or 89, as the case requires;
“full time service director” means a person at a managerial
position and is in full time service in a corporation;
“gain” from the realisation of an asset or liability has the
meaning ascribed to it by section 36;
“general insurance business” means any insurance that is not
life insurance;
“gift” means a payment without consideration or a payment
with consideration to the extent that the market
value of the payment exceeds the market value of the
consideration;
“incapacitated individual” means a minor or any individual
who is substantially blind or physically crippled or
substantially mentally retarded or who is adjudged under
any law, whether of the United Republic or of any other
country, to be of unsound mind;
“income” -
Cap.

lly mentally retarded or who is adjudged under
any law, whether of the United Republic or of any other
country, to be of unsound mind;
“income” -
Cap.

197
Cap. 342

197
Cap. 342

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2023]
562
(a) from an employment, business or investment has the
meaning ascribed in sections 7, 8 or 9, as the case
requires;
(b) when used without a reference to employment,
business or investment, means a person’s income
from any employment, business or investment and an
aggregation of such income as calculated in accordance
with this Act, as the case requires; and
(c) in the case of corporation with unrelieved losses
referred to under section 4(1)(a), the turnover of that
corporation for the year of income;
“income tax” has the meaning ascribed to it by section 4;
“incomings for an asset” has the meaning ascribed to it by
section 38;
“individual” means a natural person;
“insurance business” means the business of an insurer in
effecting, issuing and carrying out insurance;
“interest” means a payment for the use of money and includes
a payment made or accrued under a debt obligation that
is not a repayment of capital, any gain realised by way of
a discount, premium, swap payment or similar payment,
amounts treated as interest under section 32, amounts
recognised as interest under section 92(6) (b)(ii) and
interest imposed under Part XI of the Tax Administration
Act;
“investment” means the owning of one or more assets of a
similar nature or that are used in an integrated fashion, on
similar terms and subject to similar conditions, including
as to location and includes a past, present and prospective
investment, but does not include a business, employment
and the owning of assets, other than investment assets,
for personal use by the owner;
“investment asset” means shares and securities in a
corporation, a beneficial interest in a trust and an interest
in land and buildings but does not include-
(a) business assets, depreciable assets and trading stock;
Cap.

ficial interest in a trust and an interest
in land and buildings but does not include-
(a) business assets, depreciable assets and trading stock;
Cap.

438

438

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THE INCOME TAX ACT [CAP. 332 R.E.

2023]
(b) a private residence of an individual that has been owned
continuously for three years or more and lived in by
the individual continuously or intermittently for a total
of three years or more, other than a private residence
that is realised for a gain in excess of fifteen million
shillings;
(c) an interest in land held by an individual that has a
market value of less than ten million shillings at the
time it is realised and that has been used for agricultural
purposes for at least two of the three years prior to
realisation; and
(d) shares or securities listed on the Dar es Salaam Stock
Exchange that are owned by a resident person or a
non-resident person who either alone or with other
associate controls less than twenty five percent of the
controlling shares of the issuer company;
“lease” means an arrangement providing a person with a
temporary right in respect of an asset of another person,
other than money, and includes a licence, profit-a-
prendre, option, rental agreement, royalty agreement
and tenancy;
“licence area”-
(a) with respect to mining operations, means the area
covered by the mineral right in question; and
(b) with respect to petroleum operations, means the
exploration or development area with respect to which
the operations are conducted;
“licenced dealer” has a meaning ascribed to it in the Mining
Act;
“life insurance” means insurance of any of the following
classes:
(a) insurance where the specified event is the death of an
individual who is the insured or an associate of the
insured;
(b) insurance where-
Cap.

es:
(a) insurance where the specified event is the death of an
individual who is the insured or an associate of the
insured;
(b) insurance where-
Cap.

123

123

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2023]
564
(i) the specified event is an individual who is the
insured or an associate of the insured sustaining
personal injury or becoming incapacitated; and
(ii) the insurance agreement is expressed to be in
effect for at least five years or without limit of
time and is not terminable by the insurer before
the expiry of five years except in circumstances
prescribed by the regulations;
(c) insurance under which an amount or series of amounts
is to become payable to the insured in the future; and
(d) re-insurance of insurance referred to under paragraphs
(a) to (c);
“life insurance business” means the business of an insurer in
effecting, issuing and carrying out life insurance;
“loss from any business or investment” has the meaning
ascribed to it by section 19 and from the realisation of an
asset or liability, has the meaning ascribed to it by section 36;
“manager” in relation to an entity-
(a) means any councillor, director, manager, member,
officer or other person who participates or may
participate, whether alone or jointly with other persons,
in making senior management decisions on behalf of
the entity; and
(b) includes a partner of a partnership, a trustee of a trust
and a person in accordance with whose directions
and instructions the entity or a person described in
paragraph (a) is required or accustomed to act;
“market value” means a market value determined under
section 27;
“member” in relation to an entity, means any person who
owns a membership interest in the entity;
“membership interest” in an entity means a right, including a
contingent right and whether of a legal or equitable nature,
to participate in any income or capital of the entity and
includes the interest of a partner in a partnership, the interest
of a beneficiary in a trust and shares in a corporation;

r capital of the entity and
includes the interest of a partner in a partnership, the interest
of a beneficiary in a trust and shares in a corporation;

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THE INCOME TAX ACT [CAP. 332 R.E.

2023]
“midstream activities” has the meaning ascribed to it under
the Petroleum Act;
“mineral” has the meaning ascribed to it under the Mining
Act;
“mineral rights” has the meaning ascribed to it under the
Mining Act;
“mining” means intentionally winning minerals and every
method or process by which mineral is won;
“mining licence” means special mining licence, mining
licence or primary mining licence defined as such under
the Mining Act;
“mining operations” means prospecting, mining or
operations connected with prospecting or mining carried
out pursuant to mineral rights granted under the Mining
Act;
“Minister” means the Minister responsible for finance;
“minor” with respect to a year of income means an individual
under the age of eighteen years at the end of the year of
income;
“money transfer agent” means any person rendering money
transfer service on behalf of the money transfer service
provider;
“money transfer commission” means a payment in respect
of money transfer service paid or payable to a money
transfer agent;
“National Oil Company” has the meaning ascribed to it
under the Petroleum Act;
“natural resource” means minerals, petroleum, water or any
other non-living or living resource that may be taken
from land or the sea;
“natural resource payment” means any payment, including
a premium or like amount, for the right to take natural
resources from land or the sea or calculated in whole
or part by reference to the quantity or value of natural
resources taken from land or the sea;
“net cost” for an asset or liability to a particular time means -
Cap.

rence to the quantity or value of natural
resources taken from land or the sea;
“net cost” for an asset or liability to a particular time means -
Cap.

392
Cap. 123
Cap. 123
Cap. 123
Cap. 123
Cap. 392

392
Cap. 123
Cap. 123
Cap. 123
Cap. 123
Cap. 392

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2023]
566
(a) in the case of a depreciable asset, its share of the written
down value of the pool to which it belongs at that time
apportioned according to the market value of all the
assets in the pool; and
(b) in the case of any other asset or a liability, the amount
by which cumulative costs for the asset or liability
exceed cumulative incomings for the asset or liability
to the time;
“net gains” from the realisation of investment assets of
an investment of a person for a year of income has the
meaning ascribed to it by section 36;
“parastatal organisation” means -
(a) a local authority of the United Republic;
(b) a body corporate established by or under any Act or
Ordinance of the United Republic other than the
Companies Act, and any company registered under the
Companies Act where -
(i) in the case of a company limited by shares, not
less than fifty percent of the issued share capital
of the company is owned by the Government or
an organisation which is a parastatal organisation
under this definition; or
(ii) in the case of a company limited by guarantee-
(aa) the members of the company include the
Government or an organisation which is a
parastatal organisation under this definition;
and
(bb) such members have undertaken to contribute
not less than fifty percent of the amount to be
contributed by members in the event of the
company being wound up;
“partnership” means any association of individuals or bodies
corporate carrying on business jointly, irrespective of
whether the association is recorded in writing;
“payment” includes the transfer of assets or money, the
transfer or decrease of a liability, the provision of services,
Cap.

n is recorded in writing;
“payment” includes the transfer of assets or money, the
transfer or decrease of a liability, the provision of services,
Cap.

212
Cap. 212

212
Cap. 212

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THE INCOME TAX ACT [CAP. 332 R.E.

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THE INCOME TAX ACT [CAP. 332 R.E.

2023]
the use or availability for use of money or an asset and the
creation of an asset in another person;
“permanent establishment” means a place where a person
carries on business and includes -
(a) a place where a person is carrying on business through
an agent, other than a general agent of independent
status acting in the ordinary course of business as
such:
Provided that, where an agent other than an independent
agent is acting on behalf of another person, that other person
shall be deemed to have a permanent establishment where-
(i) the agent other than independent agent has and
habitually exercises authority to conclude contracts
or issues invoice on behalf of that other person,
unless his activities are limited to the purchase of
goods or merchandise for that other person;
(ii) the agent other than independent agent has no
authority to conclude contracts, but habitually
maintains stock of goods or merchandise from
which he regularly delivers goods or merchandise
on behalf of that other person; or
(iii) the agent other than independent agent habitually
secures orders, wholly or almost wholly for that other
person or for the enterprise and other enterprises
controlling, controlled by, or subject to the same
common control, as that of that other person;
(b) a place where a person has used or installed, or is
using or installing substantial equipment or substantial
machinery; and
(c) a place where a person is engaged in a construction,
assembly or installation project for six months or
more, including a place where a person is conducting
supervisory activities in relation to such a project;
“perpetual loss corporation rules” means those rules set up
by the definition of “income” in section 3 and sections 4(1)
(a) and 6(1)(c) and paragraph 3(3) of the First Schedule;

rules” means those rules set up
by the definition of “income” in section 3 and sections 4(1)
(a) and 6(1)(c) and paragraph 3(3) of the First Schedule;

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2023]
568
“person” means an individual or an entity;
“petroleum” has the meaning ascribed to it under Petroleum
Act;
“petroleum operations” has the meaning ascribed to it under
the Petroleum Act;
“petroleum right” means an exploration licence or a
development licence granted under the Petroleum Act
and includes-
(a) separately, the interest of a contractor under a
Production Sharing Agreement with respect to each
exploration licence granted with respect to the contract
area;
(b) separately, the interest of a contractor under a
Production Sharing Agreement with respect to each
development licence granted with respect to the
contract area; and
(c) data or information pertaining to petroleum operations;
“production operations” has the meaning ascribed to it
under the Petroleum Act;
“Production Sharing Agreement” means-
(a) an agreement concluded under section 47 of the
Petroleum Act between the Government of the United
Republic, the National Oil Company and another
person “the contractor”; and
(b) a tripartite agreement between the Government of
the United Republic, the National Oil Company and
a contractor under which the National Oil Company
engages the contractor to carry out on its behalf
petroleum operations in an exploration or development
area with respect to an exploration or development
licence held by the National Oil Company;
“prospecting” with respect to mineral right, means
prospecting operations as provided for under section 4
of the Mining Act and includes retention under retention
licence;
Cap.

to mineral right, means
prospecting operations as provided for under section 4
of the Mining Act and includes retention under retention
licence;
Cap.

392
Cap. 392
Cap. 392
Cap. 392
Cap. 392
Cap. 123

392
Cap. 392
Cap. 392
Cap. 392
Cap. 392
Cap. 123

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THE INCOME TAX ACT [CAP. 332 R.E.

2023]
“pool of depreciable assets of a person for a year of income”
has the meaning ascribed to it by paragraph 1 of the Third
Schedule;
“realisation” of an asset has the meaning ascribed to it by
section 39, and of liability has the meaning ascribed to it
under section 40;
“rehabilitation” with respect to a mineral operations or
with respect to processing, smelting or refining minerals
means abandonment activities and includes reclamation,
rehabilitation, restoration and closure of the operation as
required by law or under the terms of the relevant mineral
right or development agreement;
“rehabilitation fund” with respect to mining operations or
with respect to processing, smelting or refining minerals
means a fund-
(a) required by law, a mineral right or under a development
agreement and approved for that purpose by the
Minister responsible for mining;
(b) which is established to meet expenses to be incurred in
the course of rehabilitation of the operations including
expenses under an approved mine closure plan; and
(c) where contributions to the fund are placed beyond the
control of the person conducting the operations;
“rehabilitation bond” with respect of mining operation, has
the meaning ascribed to it by the Mining Act;
“relative” means the individual’s child, spouse, parent,
grandparent, grandchild, sibling, aunt, uncle, nephew,
niece or first cousin, including by way of marriage or
adoption;
“religious organisation” means a resident entity of a public
character established for the advancement of religion that
has been issued with ruling by the Commissioner under
section 11 of the Tax Administration Act currently in
force stating that, it is a religious organisation;
“rent” means any payment made by the lessee under a lease
of a tangible asset including any premium and any other
Cap.

it is a religious organisation;
“rent” means any payment made by the lessee under a lease
of a tangible asset including any premium and any other
Cap.

123
Cap. 438

123
Cap. 438

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2023]
570
payment for the granting of the lease but excludes a
natural resource payment and a royalty;
“repatriated income” has the meaning ascribed to it under
section 93;
“representative assessee” means an agent of a non-resident
person or of a beneficial owner;
“residence” or “resident” with respect to a person has the
meaning ascribed to it under section 86;
“retention licence” has the meaning ascribed to it under the
Mining Act;
“retirement contribution” means a payment made to a
retirement fund for the provision or future provision of
retirement payments;
“retirement fund” means any entity established and
maintained solely for the purposes of accepting and
investing retirement contributions in order to provide
retirement payments to individuals who are beneficiaries
of the entity;
“retirement payment” means a payment, by way of a lump
sum, pension or commuted pension, made by a person
to-
(a) an individual in the event of the individual’s
retirement; or
(b) a relative of an individual in the event of the individual’s
death;
“return of income” has the meaning ascribed to it by section
117;
“royalty” means any payment made by the lessee under a
lease of an intangible asset and includes payments for -
(a) the use of, or the right to use, a copyright, patent, design,
model, plan, secret formula or process or trademark;
(b) the supply of know-how including information
concerning industrial, commercial or scientific
equipment or experience;
(c) the use of, or right to use, a cinematography film,
videotape, sound recording or any other like medium;
Cap.

scientific
equipment or experience;
(c) the use of, or right to use, a cinematography film,
videotape, sound recording or any other like medium;
Cap.

123

123

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THE INCOME TAX ACT [CAP. 332 R.E.

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THE INCOME TAX ACT [CAP. 332 R.E.

2023]
(d) the use of, or right to use, industrial, commercial or
scientific equipment;
(e) the supply of assistance ancillary to a matter referred to
in paragraphs (a) to (d); or
(f) a total or partial forbearance with respect to a matter
referred to in paragraphs (a) to (e),
but excludes a natural resource payment;
“separate mining operation” has the meaning ascribed to it
under section 68;
“separate petroleum operation” has the meaning ascribed to
it under section 77;
“service” has the meaning ascribed to it under sections 40
and 41 of the Tax Administration Act;
“service fee” means a payment to the extent to which,
based on market values, it is reasonably attributable to
services rendered by a person through a business of that
person or a business of any other person and includes
a payment for any theatrical or musical performance,
sports or acrobatic exhibition or any other entertainment
performed, conducted, held or given;
“service rendered” means transmitting or delivering of
service in the United Republic irrespective of the place of
performance of service;
“special mining licence” has the meaning ascribed to it
under the Mining Act;
“shareholder” means a person who is a member of a
corporation;
“source” has the meaning ascribed to it under sections 87, 88
or 89, as the case requires;
“statutory rate” in relation to calendar year means the
prevailing discount rate determined by the Bank of
Tanzania;
“strategic investor” means an investor who has been
determined as such under the Tanzania Investment Act;
“tax” has the meaning ascribed to it under section 100;
“technical service” in respect of mining or petroleum
operations, means services in respect of earthmoving,
Cap.

ing ascribed to it under section 100;
“technical service” in respect of mining or petroleum
operations, means services in respect of earthmoving,
Cap.

438
Cap. 123
Cap. 38

438
Cap. 123
Cap. 38

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2023]
572
engineering and construction and includes geological,
geotechnical and metallurgical services, seismic survey,
data interpretation, drilling or any such services;
“total income” has the meaning ascribed to it under
section 5;
“trading stock” means assets owned by a person that are
sold or intended to be sold in the ordinary course of a
business of the person, work in progress on such assets
and inventories of materials to be incorporated into such
assets and includes, in the case of a person carrying on a
banking business, loans made in the ordinary course of
that business;
“trust” means an arrangement under which a trustee holds
assets but excludes a partnership and a corporation;
“trustee” -
(a) means an individual or body corporate holding assets
in a fiduciary capacity for the benefit of identifiable
persons or for some object permitted by law and
whether or not the assets are held alone or jointly with
other persons or the individual or body corporate
is appointed or constituted trustee by personal acts,
by will, by order or declaration of a court or by other
operation of the law; and
(b) includes-
(i) any executor, administrator, tutor or curator;
(ii) any liquidator, receiver, trustee in bankruptcy or
judicial manager;
(iii) any person having the administration or control
of assets subject to a usufruct, fideicommissum or
other limited interest;
(iv) any person who manages the assets of an
incapacitated individual; and
(v) any person who manages assets under a private
foundation or other similar arrangements;
“turnover” in relation to a business by a resident person for
the year of income, means an amount to be included in

ion or other similar arrangements;
“turnover” in relation to a business by a resident person for
the year of income, means an amount to be included in

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THE INCOME TAX ACT [CAP. 332 R.E.

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THE INCOME TAX ACT [CAP. 332 R.E.

2023]
calculating the person’s income under section 8 without
deducting any amount under Subdivision D of Division
I of Part III;
“unapproved retirement fund” means a retirement fund that
is not an approved retirement fund;
“underlying ownership”-
(a) in relation to an entity, means membership interests
owned in the entity, directly or indirectly through
one or more interposed entities, by individuals or by
entities in which no person has a membership interest;
or
(b) in relation to an asset owned by an entity, means the asset
owned by the persons having underlying ownership of
the entity in proportion to that ownership of the entity;
“unit trust” means -
(a) an arrangement under which a trustee holds assets for
the benefit of at least twenty persons; and
(b) where the entitlements of the persons to participate in
the income or capital of the arrangement are divided
into units such that the entitlements are determined by
the number of units owned;
“upstream activities” has the meaning ascribed to it under
the Petroleum Act;
“withholdee” means a person receiving or entitled to receive
a payment from which income tax is required to be
withheld under Subdivision A of Division II of Part VII;
“withholding agent” means a person required to withhold
income tax from a payment under Subdivision A of
Division II of Part VII;
“written down value” of a pool of depreciable assets-
(a) at the end of a year of income has the meaning ascribed
to it under paragraph 3(4) of the Third Schedule; and
(b) at a particular time (“the time”) during a year of income
means-
(i) the written down value of the pool at the end of
the previous year of income; plus
Cap.

articular time (“the time”) during a year of income
means-
(i) the written down value of the pool at the end of
the previous year of income; plus
Cap.

392

392

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574
(ii) expenditure incurred prior to the time, which is
added to the depreciation basis of the pool during
the year of income or to be added during the
following year of income under paragraph 3(5) of
the Third Schedule; less
(iii) incomings derived during the year of income or to
be derived with respect to a realisation occurring
prior to the time in respect of assets that are or
have been in the pool; and
“year of income” has the meaning ascribed to it under
section 20.

urring
prior to the time in respect of assets that are or
have been in the pool; and
“year of income” has the meaning ascribed to it under
section 20.

PART II
IMPOSITION OF INCOME TAX
4.–(1) Income tax shall be charged and is payable for each year
of income in accordance with the procedure in Part VII by
every person -
(a) who has total income for the year of income or is a
corporation which has a perpetual unrelieved loss
determined under section 19 for the year of income
and the previous two consecutive years of income;
(b) who has a domestic permanent establishment that has
repatriated income for the year of income;
(c) who receives a final withholding payment during the
year of income; or
(d) who is a representative assessee from or through whom
a non-resident person is in receipt of any income,
whether directly or indirectly. (2) The amount of income tax payable by a person for a year
of income shall be equal to the sum of the income tax payable
with respect to subsection (1). (3) Subject to the provisions of subsections (4) and (5), the
income tax payable by a person with respect to subsection (1)
(a) is calculated by-
Charge of tax
Act Nos. 13 of 2008 s. 14
8 of 2012 s. 20
8 of 2020 s. 26
7 of 2023 s. 22

a person with respect to subsection (1)
(a) is calculated by-
Charge of tax
Act Nos. 13 of 2008 s. 14
8 of 2012 s. 20
8 of 2020 s. 26
7 of 2023 s. 22

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THE INCOME TAX ACT [CAP. 332 R.E. 2023]
(a) applying the relevant rates of income tax determined
under paragraph 1, 3(1) or 3(3) of the First Schedule,
as the case may be, to the person’s total income or
turnover for the year of income; and
(b) subtracting from the resulting amount any tax credit that the
person may claim for the year of income under section 98. (4) The income tax payable with respect to subsection (1)(a)
by a resident individual who is not required to file a return of
income under section 118(a)(ii) (and who does not elect to file a
return) shall be equal to the sum of the amounts to be withheld
under section 104 by the individual’s employer or employers
from payments made to the individual during the year of income
and the sum of instalments paid by the person under section
90(1) with respect to gains realised during the year of income.

during the year of income
and the sum of instalments paid by the person under section
90(1) with respect to gains realised during the year of income.

(5) Where a resident individual meets the requirements of
paragraph 2(1) of the First Schedule with respect to a year of
income, the income tax payable by the individual with respect
to subsection (1)(a) for the year of income shall be equal to the
amount of presumptive income tax provided in paragraph 2(3)
or 2(5) of the First Schedule. (6) The income tax payable by a person with respect to
subsection (1)(b) shall be calculated by applying the rate of
income tax mentioned in paragraph 3(4) of the First Schedule
to the permanent establishment’s repatriated income for the
year of income. (7) Subjec to the provisions of section 111(4), the income
tax payable by a person with rspect to subsection (1)(c) shall
be the sum of the amounts calculated by applying the relevant
rates of income tax determined under paragraph 4 of the First
Schedule to the amount of each final withholding payment
received by the person during the year of income. (8) The income tax payable by a corporation with perpetual
unrelieved loss for three consecutive years of income under
subsection (1)(a) shall not apply to a corporation conducting
agricultural business or engaged in the provision of health or
education.

f income under
subsection (1)(a) shall not apply to a corporation conducting
agricultural business or engaged in the provision of health or
education.

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E. 2023]
576
PART III
INCOME TAX BASE
Division I: Calculating the Income Tax Base
Subdivision A: Total Income
5.–(1) The total income of a person shall be the sum of the
person’s chargeable income for the year of income from each
employment, business and investment less any reduction
allowed for the year of income under section 61 relating to
retirement contributions to approved retirement funds. (2) The total income of each person shall be determined
separately.

nder section 61 relating to
retirement contributions to approved retirement funds. (2) The total income of each person shall be determined
separately.

Subdivision B: Chargeable Income
6.–(1) Subject to the provisions of subsection (2), the chargeable
income of a person for a year of income from any employment,
business or investment shall be-
(a) in the case of a resident person, the person’s income
from employment, business or investment for the year
of income irrespective of the source of the income;
(b) in the case of a non-resident person, the person’s income
from employment, business or investment for the year
of income, but only to the extent that the income has a
source in the United Republic;
(c) in the case of a resident corporation which has perpetual
unrelieved losses referred to in section 4(1)(a), the
turnover of such corporation for a year of income; and
(d) in the case of a representative assessee, the income of
a non-resident or beneficial owner from business or
investment for the year of income deemed to accrue or
arise in the United Republic. (2) The chargeable income of a resident individual who at
the end of a year of income has been resident in the United
Republic for two years or less in total during the whole of the
individual’s life shall be determined under subsection (1)(b).

resident in the United
Republic for two years or less in total during the whole of the
individual’s life shall be determined under subsection (1)(b).

Total income
Chargeable
income
Acts Nos. 8 of 2012 s. 21
8 of 2020 s. 27

Total income
Chargeable
income
Acts Nos. 8 of 2012 s. 21
8 of 2020 s. 27

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.577
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
7.–(1) An individual’s income from an employment for a year
of income shall be the individual’s gains or profits from the
employment of the individual for the year of income.

ncome from an employment for a year
of income shall be the individual’s gains or profits from the
employment of the individual for the year of income.

(2) Subject to the provisions of subsections (3), (4) and
(5) in calculating an individual’s gains or profits from an
employment for a year of income the following payments
made to or on behalf of the individual by the employer or an
associate of the employer during that year of income shall be
included-
(a) payments of wages, salary, payment in lieu of leave,
fees, commissions, bonuses, gratuity or any subsistence
travelling entertainment or other allowance received in
respect of employment or service rendered;
(b) payments providing any discharge or reimbursement of
expenditure incurred by the individual or an associate
of the individual;
(c) payments for the individual’s agreement to any
conditions of the employment;
(d) retirement contributions and retirement payments;
(e) payment for redundancy or loss or termination of
employment;
(f) other payment made in respect of employment
including benefits in kind quantified in accordance
with section 27;
(g) other amounts as may be required to be included under
Division II of this Part; and
(h) annual director’s fees payable to a director other than a
full time service director.

required to be included under
Division II of this Part; and
(h) annual director’s fees payable to a director other than a
full time service director.

(3) In calculating an individual’s gains or profits from an
employment, the following shall be excluded:
(a) exempt amounts and final withholding payments;
(b) on premises cafeteria services that are available on a
non-discriminatory basis;
(c) medical services, payment for medical services, and
payments for insurance for medical services to the
extent that the services or payments are -
Income from
employment
Acts Nos. 6 of 2006 s. 13
5 of 2011 s. 14
2 of 2014 s. 33

or medical services to the
extent that the services or payments are -
Income from
employment
Acts Nos. 6 of 2006 s. 13
5 of 2011 s. 14
2 of 2014 s. 33

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E.

nt of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E.

2023]
578
(i) available with respect to medical treatment of the
individual, spouse of the individual and up to four
of their children; and
(ii) made available by the employer and any associate
of the employer conducting a similar or related
business on a non-discriminatory basis;
(d) any subsistence, travelling, entertainment or other
allowance that represents solely the reimbursement to
the recipient of any amount expended by him wholly
and exclusively in the production of his income from
his employment or services rendered;
(e) benefits derived from the use of motor vehicle where
the employer does not claim any deduction or relief in
relation to the ownership, maintenance or operation of
the vehicle;
(f) benefit derived from the use of residential premises
by an employee of the Government or any institution
whose budget is fully or substantially out of Government
budget subvention;
(g) payment providing passage of the individual, spouse
of the individual and up to four of their children to or
from a place of employment which correspond to the
actual travelling cost where the individual is domiciled
more than twenty miles from the place of employment
and is recruited or engaged for employment solely in
the service of the employer at the place of employment;
(h) retirement contributions and retirement payments
exempted under the Public Service Social Security
Fund Act;
(i) payment that it is unreasonable or administratively
impracticable for the employer to account for or to
allocate to their recipients;
(j) allowance payable to an employee who offers intramural
private services to patients in a public hospital; and
(k) housing allowance, transport allowance, responsibility
allowance, extra duty allowance, overtime allowance,
Cap.

atients in a public hospital; and
(k) housing allowance, transport allowance, responsibility
allowance, extra duty allowance, overtime allowance,
Cap.

371

371

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.579
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
hardship allowance and honoraria payable to an
employee of the Government or its institution whose
budget is fully or substantially paid out of Government
budget subvention.

honoraria payable to an
employee of the Government or its institution whose
budget is fully or substantially paid out of Government
budget subvention.

(4) In calculating an individual’s gains or profit from
payment for redundancy or loss or termination of employment,
any payment received in respect of a year of income which
expired earlier than five years prior to the year of income in
which it was received, or which the employment or services
ceased, if earlier, such payment shall, for the purposes of
calculation of the tax payable thereon, be allocated equally
between the years of income in which it is received or, if the
employment or services ceased in an earlier year between
such earlier year of income and the five years immediately
preceding such year of income in which such payment is so
received or as the case may be, such earlier year of income
in which the employment or services ceased, and each such
portion allocated to any such year of income shall be deemed
to be income of that year of income in addition to any other
income in that year of income.

rtion allocated to any such year of income shall be deemed
to be income of that year of income in addition to any other
income in that year of income.

(5) Where amount received as compensation for the
termination of any contract of employment or services,
whether or not provision is made in such contract for the
payment of such compensation where-
(a) the contract is for a specified term, the amount included
in gains or profits shall not exceed the amount which
would have been received in respect of the unexpired
period of such contract and shall be deemed to have
accrued evenly in such unexpired period;
(b) the contract is for an unspecified term and provides
for compensation on the termination thereof, such
compensation shall be deemed to have accrued in the
period immediately following such termination at a
rate equal to the rate per annum of the gains or profits
from such contract received immediately prior to such
termination; and

such termination at a
rate equal to the rate per annum of the gains or profits
from such contract received immediately prior to such
termination; and

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E. 2023]
580
(c) the contract is for an unspecified term and does not
provide for compensation on the termination thereof,
any compensation paid on the termination thereof shall
be deemed to have accrued in the period immediately
following such termination at a rate equal to the rate
per annum of the gains or profits from such contract
received immediately prior to such termination, but
the amount so included in gains or profits shall not
exceed the amount of three years’ remuneration at
such rates. 8.–(1) A person’s income from a business for a year of income
is the person’s gains or profits from conducting the business
for the year of income.

s. 8.–(1) A person’s income from a business for a year of income
is the person’s gains or profits from conducting the business
for the year of income.

(2) Subject to the provisions of subsection (3), there shall
be included in calculating a person’s gains or profits from
conducting a business for a year of income the following
amounts derived by the person from conducting the business
during the year of income -
(a) service fees;
(b) incomings for trading stock;
(c) gains from the realisation of business assets or liabilities
of the business as calculated under Division III of this
Part;
(d) amounts required to be included under paragraph 4
of the Third Schedule on the realisation of the person’s
depreciable assets of the business;
(e) amounts derived as consideration for accepting a
restriction on the capacity to conduct the business;
(f) gifts and other ex gratia payments received by the
person in respect of the business;
(g) amounts derived that are effectively connected with
the business and that would otherwise be included in
calculating the person’s income from an investment;
and
Income from
business
Act No. 7 of 2017 s.33

e business and that would otherwise be included in
calculating the person’s income from an investment;
and
Income from
business
Act No. 7 of 2017 s.33

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.581
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
(h) the amount of tax benefit or advantage quantified under
section 27 or other amounts required to be included
under Division II of this Part, Parts IV, V or VI. (3) The following are excluded in calculating a person’s
gains or profits from conducting a business:
(a) exempt amounts and final withholding payments; and
(b) amounts that are included in calculating the person’s
income from any employment. 9.–(1) A person’s income from an investment for a year of
income is the person’s gains or profits from conducting the
investment for the year of income.

–(1) A person’s income from an investment for a year of
income is the person’s gains or profits from conducting the
investment for the year of income.

(2) Subject to the provisions of subsection (3), in calculating
a person’s gains or profits from conducting an investment for
a year of income the following amounts derived by the person
from conducting the investment during that year of income
shall be included, namely-
(a) any dividend, distribution of a trust, gains of an insured
from life insurance, gains from an interest in an
unapproved retirement fund, interest, natural resource
payment, rent or royalty;
(b) net gains from the realisation of investment assets of
the investment as calculated under Division III of this
Part;
(c) amounts derived as consideration for accepting a
restriction on the capacity to conduct the investment;
and
(d) the amount of tax benefit or advantage quantified under
section 27 or other amounts required to be included
under Division II of this Part, Parts IV, V or VI. (3) In calculating a person’s gains and profits from
conducting an investment, the amounts shall be excluded,
namely –
(a) exempt amounts and final withholding payments; and
(b) amounts that are included in calculating the person’s
income from any employment or business. Income from
investment
Act No. 15 of 2004 s. 27
7 of 2017 s. 33B

that are included in calculating the person’s
income from any employment or business. Income from
investment
Act No. 15 of 2004 s. 27
7 of 2017 s. 33B

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E. 2023]
582
Subdivision C: Exemption from Tax
10.–(1) The Minister may, by order published in the Gazette,
provide-
(a) that any income or class of incomes accrued in or
derived from the United Republic shall be exempt from
tax to the extent specified in such order; or
(b) that any exemption under the Second Schedule shall
cease to have effect either generally or to such extent as
may be specified in such order. (2) The Minister may, by order published in the Gazette,
amend, vary or replace the Second Schedule.

to such extent as
may be specified in such order. (2) The Minister may, by order published in the Gazette,
amend, vary or replace the Second Schedule.

(3) Notwithstanding any law to the contrary, an exemption
shall not be provided from tax imposed by this Act and an
agreement shall not be concluded that affects or purports to
affect the application of this Act, except as provided for-
(a) by the provisions of this Act; or
(b) by an agreement:
(i) on a strategic project;
(ii) on public interest; and
(iii) for a strategic investment or special strategic
investment approved by the National Investment
Steering Committee under the Tanzania
Investment Act,
(4) The exemption granted under this section shall cease to
have effect and the income tax shall become due and payable
as if the exemption has not been granted if such exemption
has been enjoyed in any way by another person not entitled to
enjoy similar privileges as are conferred under this Act. (5) The requirement under subsection (3)(b) shall not
apply to-. (a) a strategic project with a total tax payable not exceeding
one billion shillings for the entire project period; or
(b) grant agreement, non-concessional or concessional
loan agreement between the Government of the United
Republic and a donor or lender where such agreement
provides for income tax exemption.

oncessional
loan agreement between the Government of the United
Republic and a donor or lender where such agreement
provides for income tax exemption.

Minister may
exempt income
from tax
Acts Nos. 2 of 2017 s. 26
4 of 2018 s. 24
8 of 2020 s. 28
3 of 2021 s. 21
5 of 2022 s. 60
9 of 2022 s. 7
Cap. 38

Minister may
exempt income
from tax
Acts Nos. 2 of 2017 s. 26
4 of 2018 s. 24
8 of 2020 s. 28
3 of 2021 s. 21
5 of 2022 s. 60
9 of 2022 s. 7
Cap. 38

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.583
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
Subdivision D: Deductions
11.–(1) For purposes of calculating a person’s income
deduction shall not be allowed-
(a) for consumption expenditure incurred by the person
or excluded expenditure incurred by the person; or
(b) otherwise, except as provided for by this Act. (2) Subject to this Act, for purposes of calculating a person’s
income for a year of income from any business or investment,
there shall be deducted all expenditure incurred during the
year of income, by the person wholly and exclusively in the
production of income from the business or investment. (3) Deduction is not allowed under subsection (2) for
expenditure of a capital nature.

ly in the
production of income from the business or investment. (3) Deduction is not allowed under subsection (2) for
expenditure of a capital nature.

(4) For purposes of this section -
“consumption expenditure” means any expenditure incurred
by any person in the maintenance of himself, his family
or establishment, or for any other personal or domestic
purpose;
“excluded expenditure” means -
(a) tax payable under this Act;
(b) bribes and expenditure incurred in corrupt practice;
(c) fines and similar penalties payable to a Government or
a political subdivision of a Government of any country
for breach of any law or subsidiary legislation;
(d) expenditure to the extent to which incurred by a person
in deriving exempt amounts or final withholding
payments;
(e) distributions by an entity; or
(f) withholding tax paid by a withholder; and
“expenditure of a capital nature” means expenditure that
secures a benefit lasting longer than twelve months. 12.–(1) For the purposes of section 11(2), interest incurred
by a person during a year of income under a debt obligation
shall be incurred wholly and exclusively in the production of
income from a business or investment where-
General
principles of
deductions
Acts Nos. 15 of 2010 s. 13
4 of 2013 s. 19
2 of 2016 s. 18
4 of 2017 s. 18
Interest
Acts Nos. 15 of 2010 s. 14
8 of 2012 s.

l
principles of
deductions
Acts Nos. 15 of 2010 s. 13
4 of 2013 s. 19
2 of 2016 s. 18
4 of 2017 s. 18
Interest
Acts Nos. 15 of 2010 s. 14
8 of 2012 s.

22
8 of 2020 s. 29
5 of 2022 s. 61

22
8 of 2020 s. 29
5 of 2022 s. 61

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E. 2023]
584
(a) the debt obligation was incurred in borrowing money,
the money is employed during the year of income or
was used to acquire an asset that is employed during the
year of income wholly and exclusively in the production
of income from the business or investment; or
(b) in any other case, the debt obligation was incurred
wholly and exclusively in the production of income
from the business or investment. (2) The total amount of interest that an exempt-controlled
resident entity may deduct in accordance with section 11(2)
for a year of income shall not exceed the sum of interest
equivalent to debt-to-equity ratio of 7 to 3. (3) In this section, an entity is an exempt-controlled resident
entity for a year of income if it is resident and at any time
during the year of income twenty five percent or more of the
underlying ownership of the entity is held by entities exempt
under the Second Schedule, approved retirement funds,
charitable organisations, non-resident persons or associates of
such entities or persons.

exempt
under the Second Schedule, approved retirement funds,
charitable organisations, non-resident persons or associates of
such entities or persons.

(4) Where there is a change of the amount of debt or equity,
the amount of equity or debt shall be the average of balances of
amount of debt or equity at the end of each period. (5) For purposes of this section-
“debt” means any debt obligation excluding:
(i) a non-interest bearing debt obligation;
(ii) a debt obligation owed to a resident financial
institution; and
(iii) a debt obligation owed to a non-resident bank
or financial institution on whose interest tax is
withheld in the United Republic;
“equity” means paid up share capital at the end of the year
of income;
“period” means a month or part of a month. (6) Notwithstanding any other provision to the contrary, the
amount of deductible realised foreign exchange loss on interest
free debt obligation shall be the amount of loss attributable to
not more than seventy percent of such obligation.

d foreign exchange loss on interest
free debt obligation shall be the amount of loss attributable to
not more than seventy percent of such obligation.

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.585
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
13.–(1) For purposes of calculating a person’s income for
a year of income from any business, there shall be deducted
in respect of the trading stock of the business the allowance
determined under subsection (2). (2) The allowance shall be calculated as -
(a) the opening value of trading stock of the business for
the year of income; plus
(b) expenditure incurred by the person during the year of
income that is included in the cost of trading stock of
the business; less
(c) the closing value of trading stock of the business for the
year of income. (3) The opening value of trading stock of a business for a
year of income shall be the closing value of trading stock of the
business at the end of the previous year of income. (4) The closing value of trading stock of a business for a year
of income shall be the lower of-
(a) the cost of the trading stock of the business at the end
of the year of income; or
(b) the market value of the trading stock of the business at
the end of the year of income.

stock of the business at the end
of the year of income; or
(b) the market value of the trading stock of the business at
the end of the year of income.

(5) Where the closing value of trading stock is determined
in accordance with subsection (4)(b), the cost of the trading
stock shall be reset to that value. 14.–(1) For purposes of calculating a person’s income for a
year of income from any business, there shall be deducted all
expenditure to the extent incurred during the year of income,
by the person and in respect of the repair or maintenance
of depreciable assets owned and employed by the person
wholly and exclusively in the production of income from the
business. (2) Deductions shall not be allowed under subsection (1)
for expenditure in improving an asset, but that expenditure
may be included in the cost of the asset if the requirements of
section 37 are met. Trading stock
Repair and
maintenance
expenditure
Act No. 4 of 2017 s. 19

included in the cost of the asset if the requirements of
section 37 are met. Trading stock
Repair and
maintenance
expenditure
Act No. 4 of 2017 s. 19

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E. 2023]
586
15.–(1) For the purposes of calculating a person’s income for
a year of income from any business, there shall be deducted
agricultural improvement, research and development and
environmental expenditure to the extent incurred by the
person during the year of income in conducting the business.

ent, research and development and
environmental expenditure to the extent incurred by the
person during the year of income in conducting the business.

(2) For the purposes of this section -
“agricultural improvement expenditure” means expenditure
incurred by the owner or occupier of farm land in
conducting an agriculture, livestock farming or fish
farming business where the expenditure is incurred in -
(a) clearing the land and excavating irrigation channels; or
(b) planting perennial crops or trees bearing crops;
“environmental expenditure” means expenditure incurred
by the owner or occupier of farmland for prevention of
soil erosion; and
“research and development expenditure” means expenditure
incurred by a person in the process of developing the
person’s business and improving business products or
process and includes expenditure incurred by a company
for the purposes of an initial public offer and first listing
on the Dar es Salaam Stock Exchange but excludes any
expenditure incurred that is otherwise included in the cost
of any asset used in the use in any such process, including
an asset referred to in paragraph 1(3) of the Third Schedule.

herwise included in the cost
of any asset used in the use in any such process, including
an asset referred to in paragraph 1(3) of the Third Schedule.

16.–(1) For purposes of calculating a person’s income for a
year of income from any business, there shall be deducted-
(a) amounts contributed during the year of income to a
charitable institution referred to in section 64(8) or
social development project;
(b) any donation made under section 12 of the Education
Fund Act;
(c) amount paid to local government authority, which
are statutory obligations to support community
development projects;
(d) contribution made to the AIDS Trust Fund established
under the Tanzania Commission for AIDS Act; and
Agriculture
improvement,
research
development and
environmental
expenditure
Acts Nos. 10 of 2015 s. 114
2 of 2016 s. 19
Gifts to public,
charitable
and religious
institutions
Acts Nos. 13 of 2005 s. 9
6 of 2006 s. 14
8 of 2020 s. 30
Cap. 412
Cap. 379

114
2 of 2016 s. 19
Gifts to public,
charitable
and religious
institutions
Acts Nos. 13 of 2005 s. 9
6 of 2006 s. 14
8 of 2020 s. 30
Cap. 412
Cap. 379

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THE INCOME TAX ACT [CAP. 332 R.E. 2023]
(e) contribution made to the Government in the fight
against Coronavirus disease (COVID-19). (2) The provisions of subsection (1)(e) shall cease to have
effect on such date as the Minister may, by notice published in
the Gazette, determine. (3) The deduction available under subsection (1)(a) for a
year of income shall not exceed two percent of the person’s
income from the business calculated without a deduction
under that subsection. (4) For purposes of calculating a person’s income for a year
of income from any employment, there shall be deducted any
donation made under section 13 of the Education Fund Act. (5) Subject to subsection (4), an employee who makes
a donation to the Fund may apply to the Commissioner for
deduction. 17.

f the Education Fund Act. (5) Subject to subsection (4), an employee who makes
a donation to the Fund may apply to the Commissioner for
deduction. 17.

For the purposes of calculating a person’s income for a year
of income from any business, there shall be deducted in respect
of depreciation of depreciable assets owned and employed by
the person during the year of income wholly and exclusively
in the production of the person’s income from the business the
allowances granted under the Third Schedule. 18. For purposes of calculating a person’s income for a year of
income from any business, there shall be deducted any loss of
the person, as calculated under Division III of this Part, from
the realisation during the year of income of –
(a) a business asset of the business that is or was employed
wholly and exclusively in the production of income
from the business;
(b) a debt obligation incurred in borrowing money, where
the money is or was employed or an asset purchased with
the money is or was employed wholly and exclusively
in the production of income from the business; or
(c) a liability of the business other than a debt obligation
incurred in borrowing money, where the liability was
Cap. 412
Depreciation
allowances for
depreciable assets
Losses on
realisation of
business assets
and liabilities

rowing money, where the liability was
Cap. 412
Depreciation
allowances for
depreciable assets
Losses on
realisation of
business assets
and liabilities

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588
incurred wholly and exclusively in the production of
income from the business. 19.–(1) For purposes of calculating the income of a person,
other than a partnership or a foreign permanent establishment,
for a year of income from a business or investment, there shall
be deducted-
(a) any unrelieved loss of the year of income of the person
from any other business or investment; and
(b) any unrelieved loss of a previous year of income of the
person from any business or investment;
(2) Income of a person for the year of income having
chargeable income and unrelieved losses for the four previous
consecutive years of income may, subject to other limitations
imposed by this section, be reduced by reason of use of the
unrelieved losses which shall not be below thirty per centum
of that income before any reduction for losses:
Provided that, the requirement under this subsection shall
not apply to a corporation undertaking agricultural business
or providing health or education services.

t, the requirement under this subsection shall
not apply to a corporation undertaking agricultural business
or providing health or education services.

(3) For purposes of subsection (1), a person may deduct an
unrelieved loss-
(a) in the case of a foreign source loss from an investment,
only in calculating the person’s foreign source income
from an investment;
(b) in the case of other losses from an investment, only in
calculating the person’s income from an investment;
(c) in the case of other foreign source losses, only in
calculating the person’s foreign source income;
(d) in the case of loss incurred on agricultural business,
only in calculating the person’s income derived from
agricultural business; and
(e) in the case of loss incurred in dealing with a speculative
transaction, only in calculating the person’s income
derived from a speculative transaction. (4) Where a person calculates income for a year of income
from more than one business or investment of the person, and
Losses from
business or
investment
Acts Nos. 15 of 2004 s. 28
4 of 2013 s. 20
2 of 2016 s. 20
4 of 2017 s. 20
8 of 2020 s. 31

tment of the person, and
Losses from
business or
investment
Acts Nos. 15 of 2004 s. 28
4 of 2013 s. 20
2 of 2016 s. 20
4 of 2017 s. 20
8 of 2020 s. 31

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.589
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
deducts an unrelieved loss in more than one such calculation,
the person may choose the calculation or calculations in which
the loss or part of the loss is deducted.

ieved loss in more than one such calculation,
the person may choose the calculation or calculations in which
the loss or part of the loss is deducted.

(5) For the purposes of this section -
“agricultural business” means the practice of rearing of crops
or animals including forestry, beekeeping, aqua-culture
and farming with a view to deriving a profit, but excludes
processing of agricultural produce other than preparing
such produce for the purpose of sale in its original form;
“loss” of a year of income of a person from any business or
investment shall be calculated as the excess of amounts
deducted in calculating the person’s income from
the business or investment over amounts included in
calculating such income;
“speculative transaction” means-
(a) a transaction which is a contract for sale or purchase
of a commodity including stocks and shares settled
otherwise than actual delivery or transfer of the
commodity; or
(b) any agreement for repurchase or resale, forward sale
or purchase, futures contract, option or swap contract;
and
“unrelieved loss” means the amount of a loss that has not
been deducted in calculating a person’s income under
subsection (1) or section 26(3).

t;
and
“unrelieved loss” means the amount of a loss that has not
been deducted in calculating a person’s income under
subsection (1) or section 26(3).

Division II: Rules Governing Amounts Used
in Calculating the Income Tax Base
Subdivision A: Tax Accounting and Timing
20.–(1) Subject to the provisions of this section, the year of
income for every person shall be the calendar year. (2) Subject to the provisions of subsections (6), (7) and
(8), an entity may apply, in writing, to the Commissioner for
approval to change the entity’s year of income from -
(a) the calendar year; or
Year of income

n entity may apply, in writing, to the Commissioner for
approval to change the entity’s year of income from -
(a) the calendar year; or
Year of income

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E. 2023]
590
(b) a twelve-month period previously approved by the
Commissioner under subsection (3),
to another twelve-month period. (3) Where, in an application under subsection (2), the
entity shows a compelling need to change the entity’s year of
income, the Commissioner may, by notice in writing, approve
the application subject to any conditions as the Commissioner
prescribes. (4) The Commissioner may, by notice in writing, revoke an
approval granted to an entity under subsection (3). (5) Where an entity’s year of income changes, the period
between the end of its previous year of income and the
beginning of its new year of income shall be another year of
income of length of up to twelve months, or to eighteen months
subject to the approval of the Commissioner. (6) The year of income for every person’s foreign permanent
establishment shall be the same as the year of income of its
owner.

l of the Commissioner. (6) The year of income for every person’s foreign permanent
establishment shall be the same as the year of income of its
owner.

(7) The year of income for every non-resident partnership,
trust or corporation shall be the period, not exceeding twelve
months, for which the entity makes up its accounts or, if it has
no such period, the calendar year. (8) The initial year of income of a person shall be the
period of twelve months or less or subject to the approval
of Commissioner eighteen months or less from the time the
person starts to exist until the end of the person’s year of
income as calculated according to the foregoing subsections. 21.–(1) Subject to this Act, a person shall account for his
income according to generally accepted accounting principles. (2) Notwithstanding the provisions of subsection (1), an
individual shall account for income tax purposes on a cash basis
in calculating the individual’s income from an employment or
investment. (3) A corporation shall account for income tax purposes on
an accrual basis. Basis of
accounting for
income tax
purposes
Act No. 10 of 2015 s. 115

nt. (3) A corporation shall account for income tax purposes on
an accrual basis. Basis of
accounting for
income tax
purposes
Act No. 10 of 2015 s. 115

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.591
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
(4) Unless the Commissioner prescribes otherwise by notice
in writing, individuals in calculating income from a business,
partnerships and trusts shall account for income tax purposes
on either a cash or accrual basis according to the method that
most clearly reflects the person’s gains or profits. (5) Subject to the provisions of subsections (2) and (3), a
person may apply in writing for a change in the person’s basis
of accounting for income tax purposes and the Commissioner
may by notice in writing approve the application but only
if satisfied that the change is necessary to clearly reflect the
person’s gains and profits. (6) Where any aspect of a person’s basis of accounting for
income tax purposes is changed, adjustments shall be made in
the year of income of the change so that no item is omitted or
taken into account more than once. (7) In this section, “generally accepted accounting
principles” means the principles adopted by the National
Board of Accountants and Auditors. 22.

e. (7) In this section, “generally accepted accounting
principles” means the principles adopted by the National
Board of Accountants and Auditors. 22.

Subject to this Act, a person who accounts for income tax
purposes on a cash basis-
(a) derives an amount and, therefore, shall include the
amount in calculating the person’s income or otherwise
account for the amount as required by this Act when
payment is received or made available to the person;
and
(b) incurs expenditure and, therefore, may deduct the
expenditure in calculating the person’s income or
otherwise account for the expenditure as required by
this Act when payment is made. 23.–(1) Subject to this Act, a person who accounts for income
tax purposes on an accrual basis-
(a) derives an amount when it is receivable by the person;
and
(b) incurs expenditure when it is payable by the person. Cash basis
accounting
Accrual basis
accounting

mount when it is receivable by the person;
and
(b) incurs expenditure when it is payable by the person. Cash basis
accounting
Accrual basis
accounting

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E. 2023]
592
(2) Subject to this Act, an amount is receivable by a person
when the person becomes entitled to receive it, even if the time
for discharge of the entitlement is postponed or the entitlement
is payable by instalments. (3) Subject to this Act, an amount shall be treated as payable
by a person when all the events that determine liability have
occurred and the amount of the liability can be determined with
reasonable accuracy, but not before economic performance
with respect to the amount occurs. (4) For purposes of subsection (3), economic performance
occurs -
(a) with respect to the acquisition of services or property,
at the time the services or property are provided;
(b) with respect to the use of an asset, at the time the asset
is used; or
(c) in any other case, at the time the person makes payment
in full satisfaction of the liability.

use of an asset, at the time the asset
is used; or
(c) in any other case, at the time the person makes payment
in full satisfaction of the liability.

(5) Where in calculating income on an accrual basis -
(a) a person includes a payment of a particular quantity to
which the person is entitled or deducts a payment of a
particular quantity that the person is obliged to make;
and
(b) subsequently that entitlement or obligation is satisfied
by a payment received or made by the person, as the
case requires, of a different quantity, including by
reason of a change in currency valuations,
then appropriate adjustments shall be made at the time the
payment is received or made so as to remedy the inaccuracy. 24. For purposes of sections 22 and 23, an amount shall
be treated as derived or expenditure incurred by a person
notwithstanding that the person is not legally entitled to receive
the amount or liable to make the payment, if the person claims
to be legally entitled to receive, or legally obliged to pay the
amount. Claim of right

the amount or liable to make the payment, if the person claims
to be legally entitled to receive, or legally obliged to pay the
amount. Claim of right

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.593
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
25.–(1) Where a person has deducted expenditure in
calculating the person’s income and the person later recovers the
expenditure, the person shall, at the time of recovery, include
the amount recovered in calculating the person’s income. (2) Where a person has included an amount in calculating
the person’s income and, because of a legal obligation to do so,
the person later refunds the amount, the person may, at the
time of refund, deduct the amount refunded in calculating the
person’s income. (3) Where in calculating income on an accrual basis a
person deducts expenditure that the person shall be obliged to
make and the person later disclaims an obligation to incur the
expenditure, the person shall, at the time of disclaimer, include
the amount disclaimed in calculating the person’s income.

an obligation to incur the
expenditure, the person shall, at the time of disclaimer, include
the amount disclaimed in calculating the person’s income.

(4) Subject to the provisions of subsection (5), where in
calculating income on an accrual basis a person includes an
amount to which the person is entitled and the person later-
(a) disclaims an entitlement to receive the amount; or
(b) in the case where the amount constitutes a debt claim
of the person, the person writes off the debt as bad,
the person may, at the time of disclaimer or writing off,
deduct the amount disclaimed or written off in calculating
the person’s income. (5) A person may disclaim the entitlement to receive an
amount or write off as a bad debt claim of the person -
(a) in the case of a debt claim of a financial institution, after
the debt claim has become a bad debt as determined
in accordance with the relevant standards established
by the Bank of Tanzania and that such institution has
taken all reasonable steps in pursuing payment and the
institution reasonably believes that debt claim will not
be satisfied; and
(b) in any other case, only after the person has taken all
reasonable steps in pursuing payment and the person
reasonably believes that the entitlement or debt claim
will not be satisfied. Reverse of
amounts
including bad
debts
Act No. 2 of 2014 s.

d the person
reasonably believes that the entitlement or debt claim
will not be satisfied. Reverse of
amounts
including bad
debts
Act No. 2 of 2014 s.

34

34

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594
26.–(1) In the case of a person accounting for income tax
purposes on an accrual basis, amounts to be included or deducted
in calculating income that relate to a long-term contract shall be
taken into account on the basis of the percentage of the contract
completed during each year of income. (2) The percentage of completion shall be determined by
comparing the total expenditure allocated to the contract
and incurred before the end of the year of income with the
estimated total contract expenditure as determined at the time
of commencement of the contract. (3) Where for the year of income in which a long-term
contract is completed, the person has an unrelieved loss
determined under section 19 for the year of income or a
previous year of income that is attributable to the long-term
contract, the Commissioner may allow the loss to be-
(a) carried back to a previous year of income; and
(b) treated as an unrelieved loss for that year.

ntract, the Commissioner may allow the loss to be-
(a) carried back to a previous year of income; and
(b) treated as an unrelieved loss for that year.

(4) The amount treated as an unrelieved loss for a year of
income under subsection (3)(b) shall not exceed the amount
by which amounts included in calculating income for that year
of income under the contract exceed deductions under the
contract for the year. (5) An unrelieved loss for a year of income shall be
attributable to a long-term contract to the extent that
deductions in calculating the income from the business that
relate to the contract exceed inclusions in that calculation that
relate to the contract. (6) For purposes of this section, “long-term contract”-
(a) means a contract for manufacture, installation, or
construction, or, in relation to each, the performance
of related services, which is not completed within
the year of income in which work under the contract
commences; but
(b) excludes a contract estimated to be completed within
six months of the date on which work under the
contract commenced. Long-term
contracts

s; but
(b) excludes a contract estimated to be completed within
six months of the date on which work under the
contract commenced. Long-term
contracts

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.595
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
(7) The regulations may apply the percentage of completion
method to other types of contracts that span more than one
year of income where the contract may accelerate expenditure
in early years or delay income until later years of the contract.

that span more than one
year of income where the contract may accelerate expenditure
in early years or delay income until later years of the contract.

Subdivision B: Quantification, Allocation
and Characterisation of Amounts
27.–(1) A payment or amount to be included or deducted in
calculating income shall be quantified as follows:
(a) for payments consisting of the availability for use or use
of a motor vehicle during a year of income provided
in return for services whether by way of employment
or otherwise or provided by an entity to a member or
manager of the entity, the amount of the payment shall
be as prescribed in the Fifth Schedule;
(b) for payments consisting of a loan provided in return for
services whether by way of employment or otherwise
or by an entity to a member or manager of the entity-
(i) where the loan is made by an employer to an
employee, the term of the loan is less than twelve
months and the aggregate amount of the loan and
any similar loans outstanding at any time during
the previous twelve months does not exceed three
months basic salary, the quantity of the payment
is nil; and
(ii) in any other case, the amount by which -
(aa) the interest that would have been paid by the
payee during the year of income of the payee
in which the payment is made if interest were
payable under the loan at the statutory rate
for the year of income, exceeds;
(bb) the interest paid by the payee during the year
of income under the loan, if any;
(c) for payments consisting of the provision of premises
including any furniture or other contents by an
employer for residential occupation by an employee
Quantification
according to
market value
Act No.

es
including any furniture or other contents by an
employer for residential occupation by an employee
Quantification
according to
market value
Act No.

7 of 2017 s.32(c)

7 of 2017 s.32(c)

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E.

nt of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E.

2023]
596
during a year of income, (i) or (ii), whichever is less,
reduced by any rent paid for the occupation by the
employee, where -
(i) is the market value rental of the part of the
premises occupied by the employee for the period
occupied during the year of income; and
(ii) is the greater of -
(aa) fifteen percent of the employee’s total income
for the year of income, calculated without
accounting for the provision of the premises
and, where the premises are occupied for
only part of the year of income, apportioned
as appropriate; and
(bb) expenditure claimed as a deduction by the
employer in respect of the premises for the
period of occupation by the employee during
the year of income;
(d) for purposes of tax benefit or advantage, the amount of
tax benefit or advantage shall be three hundred thirty
percent of the actual tax benefit or advantage:
Provided that, for the purpose of this paragraph, tax benefits
or advantage means benefit or advantage obtained by a person
by shifting an obligation to pay income tax to another person;
and
(e) in any other case, the amount prescribed by the
regulations or, in the absence of regulations, the market
value.

income tax to another person;
and
(e) in any other case, the amount prescribed by the
regulations or, in the absence of regulations, the market
value.

(2) The amount of a payment is quantified without
reduction for any income tax withheld from the payment
under Subdivision A of Division II of Part VII. (3) The market value of an asset shall be determined without
regard to any restriction on transfer of the asset or the fact that
the asset is not otherwise convertible into a payment of money
or money’s worth. 28.–(1) Subject to the provisions of subsection (4), for purposes
of this Act, a person’s tax payable, income and amounts to
Quantification in
shillings

.–(1) Subject to the provisions of subsection (4), for purposes
of this Act, a person’s tax payable, income and amounts to
Quantification in
shillings

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.597
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
be included and deducted in calculating income shall be
quantified in Tanzania shillings. (2) Subject to subsection (3), where an amount to be
included or deducted in calculating income is quantified in a
currency other than Tanzania shillings, the amount shall be
converted at the exchange rate quoted by the Bank of Tanzania
and applying between the currency and the shilling at the time
the amount is taken into account for income tax purposes. (3) For purposes of subsection (2) and where the
Commissioner permits, by notice in writing, a person may use
the average exchange rate applying during the year of income
as determined by the Commissioner. (4) The Commissioner may, by notice in writing, for a
specified period of time and on such terms and conditions
as he thinks fit, permit an entity to quantify amounts to be
included and deducted in calculating income in any foreign
currency that is convertible into Tanzania shillings.

t an entity to quantify amounts to be
included and deducted in calculating income in any foreign
currency that is convertible into Tanzania shillings.

29.–(1) Subsection (2) shall apply where a person indirectly
benefits from a payment or directs who is to be the payee
of the payment and the payer, an associate of the payer or a
third person under an arrangement with the payer or with an
associate of the payer intends the payment to benefit the person. (2) Where this subsection applies, the Commissioner may,
by practice note generally or by notice in writing served on the
person, treat the person as the-
(a) payee of the payment;
(b) payer of the payment; or
(c) payee of the payment and as making an equal payment
to the person who would be considered the payee of
the payment if this subsection were ignored. 30.–(1) For purposes of calculating a person’s income from
an investment that is jointly owned with another person,
amounts to be included and deducted in that calculation shall
be apportioned among the joint owners in proportion to their
respective interests in the investment. Indirect
payments
Jointly owned
investment

shall
be apportioned among the joint owners in proportion to their
respective interests in the investment. Indirect
payments
Jointly owned
investment

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E. 2023]
598
(2) Where the interests of joint owners cannot be ascertained
they shall be treated as equal. 31. Subject to the provisions of section 25, where a person or an
associate of the person derives an amount “the compensation
amount” which compensates for or represents recovery of-
(a) income or an amount to be included in calculating
income, which the person expects or expected to
derive; or
(b) a loss or an amount to be deducted in calculating
income, which the person has incurred or which the
person expects or expected to incur,
the compensation amount shall be included in calculating
income of the person and takes its character from the amount
compensated for. 32.–(1) Payments made by a person under a finance lease or
in acquiring an asset under an instalment sale, other than an
instalment sale that provides for commercial periodic interest
payable on balance outstanding, shall be treated as interest and
a repayment of capital under a loan made by the lessor or seller
to the lessee or buyer, as the case requires.

nding, shall be treated as interest and
a repayment of capital under a loan made by the lessor or seller
to the lessee or buyer, as the case requires.

(2) Payments made to a person under an annuity shall be
treated as interest and a repayment of capital under a loan
made by the person to the payer of the annuity. (3) The interest and repayment of capital under subsections
(1) and (2) shall be calculated as if the loan were a blended
loan with interest compounded six monthly. (4) Where an asset is leased under a finance lease, the lessor
shall be treated as transferring ownership of the asset to the lessee. (5) Subject to section 44, where a person transfers an asset
under an instalment sale or, by reason of subsection (4), under
a finance lease -
(a) the person shall be treated as deriving an amount in
respect of the transfer equal to the market value of the
asset immediately before the transfer; and
Compensation
and recovery
payments
Annuities,
instalment sales
and finance leases
Act No. 5 of 2022 s. 62

e
asset immediately before the transfer; and
Compensation
and recovery
payments
Annuities,
instalment sales
and finance leases
Act No. 5 of 2022 s. 62

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.599
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
(b) the person who acquires the asset shall be treated as
incurring expenditure of an equal amount in acquiring
the asset. (6) Where the lessee under a finance lease returns the
asset to the lessor before ownership passes to the lessee, other
than by reason of subsection (4), the lessee shall be treated as
transferring ownership of the asset back to the lessor. (7) For the purpose of this section, where an alternative
financing arrangement approved by the Bank of Tanzania is
payable as cost plus margin, the margin shall be treated in the
same manner as interest.

ive
financing arrangement approved by the Bank of Tanzania is
payable as cost plus margin, the margin shall be treated in the
same manner as interest.

(8) For purposes of this section -
“blended loan” means a loan under which payments by the
borrower represent in part a payment of interest and
in part a repayment of capital where the interest part
is calculated on capital outstanding at the time of each
payment and the rate of interest is uniform over the term
of the loan;
“finance lease” means a lease where -
(a) the lease agreement provides for transfer of ownership
following the end of the lease term or the lessee has an
option to acquire the asset after expiry of the lease term
for a fixed or presupposed price;
(b) the lease term exceeds seventy-five percent of the useful
life of the asset;
(c) the estimated market value of the asset after expiry of
the lease term is less than twenty percent of its market
value at the start of the lease;
(d) in the case of a lease that commences before the last
twenty five percent of the useful life of the asset, the
present value of the minimum lease payments equals
or exceeds ninety percent of the market value of the
asset at the start of the lease term; or
(e) the asset is custom-made for the lessee and after expiry
of the lease term the asset will not be of practical use to
any person other than the lessee; and

asset is custom-made for the lessee and after expiry
of the lease term the asset will not be of practical use to
any person other than the lessee; and

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E. 2023]
600
“lease term” includes an additional period for which the
lessee has an option to renew a lease. 33.–(1) In any arrangement between persons who are associates,
the persons shall quantify, apportion and allocate amounts
to be included or deducted in calculating income between
the persons as is necessary to reflect the total income or tax
payable that would have arisen for them if the arrangement
had been conducted at arm’s length. (2) Where, in the opinion of the Commissioner, a person
has failed to comply with the provisions of subsection (1),
the Commissioner may make adjustments consistent with
subsection (1) and in doing so the Commissioner may-
(a) re-characterise the source and type of any income, loss,
amount or payment; or
(b) apportion and allocate expenditure, including that
referred to in section 92(2) incurred by one person
in conducting a business that benefits an associate in
conducting a business to the person and the associate
based on the comparability analysis of the businesses.

a business that benefits an associate in
conducting a business to the person and the associate
based on the comparability analysis of the businesses.

34.–(1) Where a person attempts to split income with another
person, the Commissioner may, by notice in writing,
(a) adjust amounts to be included or deducted in
calculating the income of each person; or
(b) re-characterise the source and type of any income, loss,
amount or payment,
to prevent any reduction in tax payable as a result of the
splitting of income. (2) Subject to the provisions of subsection (3), a reference in
subsection (1) to a person attempting to split income includes
a reference to a transfer, either directly or indirectly, between
the person and an associate of the person of-
(a) amounts to be derived or expenditure to be incurred;
or
(b) an asset with the result that the transferee receives or
enjoys amounts derived from owning the asset. Transfer pricing
and other
arrangements
between
associates
Act No. 2 of 2016 s. 21
Income splitting

s or
enjoys amounts derived from owning the asset. Transfer pricing
and other
arrangements
between
associates
Act No. 2 of 2016 s. 21
Income splitting

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.601
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
(3) Subsection (2) applies only where the reason or one of
the reasons for the transfer is to lower the tax payable by the
person or the associate. (4) In determining under subsection (2) whether a person
is seeking to split income, the Commissioner shall consider
the market value of any payment made for the transfer. 35. [Repealed by Act No.10 of 2015 s.116.]
Division III: Assets and Liabilities
Subdivision A: Central Concepts
36.–(1) A person’s gain from the realisation of an asset or
liability is the amount by which the sum of the incomings for
the asset or liability exceeds the cost of the asset or liability at
the time of realisation. (2) The loss of a person from the realisation of an asset or
liability is the amount by which the cost of the asset or liability
exceeds the sum of the incomings for the asset or liability at
the time of realisation.

lity is the amount by which the cost of the asset or liability
exceeds the sum of the incomings for the asset or liability at
the time of realisation.

(3) Subject to the provisions of subsection (4), net gains
from the realisation of investment assets of an investment of a
person for a year of income are calculated as the sum of all gains
from the realisation of investment assets of the investment
during the year reduced by -
(a) the total of all losses from the realisation of investment
assets of the investment during the year;
(b) any unrelieved net loss of any other investment of the
person for the year; and
(c) any unrelieved net loss for a previous year of income of
the investment or any other investment of the person. (4) A person may claim a reduction under subsection (3)
with respect to a foreign source loss on the realisation of an
asset or liability only to the extent that the amount, which the
loss is to reduce, includes gains on the realisation of an asset or
liability with a foreign source. Repealed
Calculation of
gains and losses

hich the
loss is to reduce, includes gains on the realisation of an asset or
liability with a foreign source. Repealed
Calculation of
gains and losses

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E. 2023]
602
(5) Where a person may use an unrelieved net loss of an
investment in more than one calculation under subsection (3),
the person may choose the calculation or calculations in which
the loss or part of the loss is used, and is limited to one such use. (6) For purposes of this section, “unrelieved net loss of an
investment for a year of income” means the excess of losses
over gains from the realisation of investment assets of the
investment during the year of income reduced by any amount
of the excess that has previously been taken into account under
subsection (3)(b) or (c).

e
investment during the year of income reduced by any amount
of the excess that has previously been taken into account under
subsection (3)(b) or (c).

37.–(1) Subject to this Act, the cost of an asset of a person is
the sum of -
(a) expenditure incurred by the person in acquiring
the asset including, where relevant, expenditure of
construction, manufacture or production of the asset;
(b) expenditure incurred by the person in altering,
improving, maintaining and repairing the asset;
(c) expenditure incurred by the person in realising the asset;
(d) incidental expenditure incurred by the person in
acquiring and realising the asset; and
(e) any amount required-
(i) by Subdivision B of Division I of this Part to be directly
included in calculating the person’s income; or
(ii) that is an exempt amount or final withholding
payment of the person,
but excludes consumption expenditure, excluded expenditure
and expenditure to the extent to which it is directly deducted
in calculating the person’s income or included in the cost of
another asset.

xpenditure
and expenditure to the extent to which it is directly deducted
in calculating the person’s income or included in the cost of
another asset.

(2) For purposes of determining the cost of trading stock of
a business of a person -
(a) an amount shall not be included in respect of the repair,
improvement or depreciation of depreciable assets; and
(b) subject to paragraph (a) but without otherwise limiting
amounts to be included under subsection (1), the
person shall use the absorption-cost method. Cost of asset
Act No. 2 of 2016 s. 22

otherwise limiting
amounts to be included under subsection (1), the
person shall use the absorption-cost method. Cost of asset
Act No. 2 of 2016 s. 22

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.603
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
(3) Where assets owned by a person, being -
(a) trading stock; or
(b) any other type of asset prescribed by the regulations,
are fungible and not readily identifiable, the person may elect
for the cost of the assets to be determined according to the
first-in-first-out method or the average-cost method but, once
chosen, the method may only be changed with the written
permission of the Commissioner. (4) Where a person inherits an asset from a deceased, that
person shall be treated as having incurred expenditure equal
to the market value of that asset at the time of such acquisition. (5) Subject to the provisions of subsection (6), where a
person becomes a resident of the United Republic for the first
time, the net cost of an asset held by the person immediately
before becoming resident is equal to the market value of the
asset at that time. (6) Subsection (5) does not apply to an asset that was a
domestic asset of the person immediately before becoming
resident.

of the
asset at that time. (6) Subsection (5) does not apply to an asset that was a
domestic asset of the person immediately before becoming
resident.

(7) For purposes of this section -
“absorption-cost method” means the generally accepted
accounting principle under which the cost of trading
stock is the sum of direct asset costs, direct labour costs
and factory overhead costs;
“average-cost method” means the generally accepted
accounting principle under which costs are allocated to
fungible assets of a particular type owned by a person
based on a weighted average cost of all assets of that type
owned by the person;
“direct labour costs” means expenditure incurred by a
person on labour that directly relates to the production
of trading stock;
“direct asset costs” means expenditure incurred by a person
in acquiring any asset or assets, as described in subsection
(1)(a), that constitutes trading stock or becomes an
integral part of trading stock produced;

cquiring any asset or assets, as described in subsection
(1)(a), that constitutes trading stock or becomes an
integral part of trading stock produced;

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E. 2023]
604
“factory overhead costs” means all expenditure incurred by
a person in producing trading stock except direct labour
and direct asset costs;
“first-in-first-out method” means the generally accepted
accounting principle under which costs are allocated to
a fungible asset of a particular type owned by a person
based on the assumption that assets of that type owned by
the person are realised in the order of their acquisition;
and
“incidental expenditure” incurred by a person in acquiring
or realising an asset includes-
(a) advertising expenditure, taxes, duties and other
expenditure of transfer; and
(b) expenditure of establishing, preserving or defending
ownership of the asset,
and the expenditure referred to in paragraphs (a) and (b)
includes any related remuneration for the services of an
accountant, agent, auctioneer, broker, consultant, legal
advisor, surveyor or valuer. 38.

(b)
includes any related remuneration for the services of an
accountant, agent, auctioneer, broker, consultant, legal
advisor, surveyor or valuer. 38.

Subject to this Act, incomings for an asset of a person
means -
(a) amounts derived by the person in respect of owning
the asset including-
(i) amounts derived from altering or decreasing the
value of the asset; and
(ii) amounts derived under the asset including by way
of covenant to repair or otherwise; and
(b) amounts derived or to be derived by the person in
respect of realising the asset,
but excludes any amount to the extent that it is an exempt
amount, a final withholding payment or, other than in the
case of trading stock, an amount to be directly included in
calculating the person’s income under Subdivision B of
Division I of this Part. Incomings for
asset

rading stock, an amount to be directly included in
calculating the person’s income under Subdivision B of
Division I of this Part. Incomings for
asset

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.605
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
39.

. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.605
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
39.

A person who owns an asset shall be treated as realising
the asset-
(a) subject to paragraph (b), when the person parts with
ownership of the asset including when the asset is
sold, exchanged, transferred, distributed, cancelled,
redeemed, destroyed, lost, expired or surrendered;
(b) in the case of an asset of a person who ceases to exist,
excluding a deceased individual, immediately before
the person ceases to exist;
(c) in the case of an asset other than a Class 1, 2, 3, 5, 6
or 8 depreciable asset or trading stock, where the sum
of the incomings for the asset exceeds the cost of the
asset;
(d) in the case of an asset that is a debt claim owned by
a financial institution, when the debt claim becomes
a bad debt as determined in accordance with the
relevant standards established by the Bank of Tanzania
and the institution writes the debt off as bad after such
institution had taken all reasonable steps in pursuing
payment and the institution reasonably believes that
the debt claim will not be satisfied;
(e) in the case of an asset that is a debt claim owned
by a person other than a financial institution, the
person reasonably believes the debt claim shall not
be satisfied, the person has taken all reasonable steps
in pursuing the debt claim and the person writes the
debt off as bad;
(f) in the case of an asset that is a business asset, depreciable
asset, investment asset or trading stock;
(g) in the case of a foreign currency debt claim when such
debt is actually paid; or
(h) in the case of an asset owned by an entity, in the
circumstances referred to in section 56(1).

ency debt claim when such
debt is actually paid; or
(h) in the case of an asset owned by an entity, in the
circumstances referred to in section 56(1).

Realisation
Acts Nos. 15 of 2004 s. 29
8 of 2012 s. 23
2 of 2014 s. 35
2 of 2016 s. 23

Realisation
Acts Nos. 15 of 2004 s. 29
8 of 2012 s. 23
2 of 2014 s. 35
2 of 2016 s. 23

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E. 2023]
606
40.–(1) The costs and incomings of a liability of a person shall
be determined consistently with sections 37 and 38 as though
a reference to an asset were a reference to a liability and the
following shall be included:
(a) in the costs, expenditure incurred in realising the
liability; and
(b) in the incomings, amounts derived in respect of
incurring the liability.

d:
(a) in the costs, expenditure incurred in realising the
liability; and
(b) in the incomings, amounts derived in respect of
incurring the liability.

(2) A person who owes a liability shall be treated as realising
the liability-
(a) subject to paragraph (b), when the person ceases to owe
the liability including when the liability is transferred,
satisfied, cancelled, released or expired;
(b) in the case of a liability of a person who ceases to exist,
excluding a deceased individual, immediately before
the person ceases to exist;
(c) in the case of a foreign currency debt obligation, when
such debt is actually paid;
(d) in the case of a liability of an entity, in the circumstances
referred to in section 56 (1); and
(e) subject to the provisions of subsection (3), in the case
of a liability owed by a resident person, immediately
before the person becomes a non-resident person,
other than liabilities owed by the person through
a permanent establishment situated in the United
Republic immediately after becoming non-resident. (3) Subject to the provisions of any regulations, the
provisions of Subdivision B shall apply, with any necessary
adaptations, to liabilities in a manner similar to that in which
they apply to assets.

the
provisions of Subdivision B shall apply, with any necessary
adaptations, to liabilities in a manner similar to that in which
they apply to assets.

41.–(1) Subject to the provisions of section 25, where a person
has included expenditure in the cost of an asset or liability and
later recovers the expenditure, the person shall include the
amount recovered in the incomings for the asset or liability, as
the case requires. Application of
this Division to
liabilities
Act No. 8 of 2012 s. 24
Reverse,
quantification
and
compensation
for costs and
incomings

he case requires. Application of
this Division to
liabilities
Act No. 8 of 2012 s. 24
Reverse,
quantification
and
compensation
for costs and
incomings

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.607
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
(2) Subject to the provisions of section 25, where a person
has included an amount derived in the incomings for an asset
or liability and, because of a legal obligation to do so, later
refunds the amount, the person may include the amount
refunded in the cost of the asset. (3) Section 28 applies to the cost of and incomings for an
asset or liability in the same manner as it applies to amounts to
be included and deducted in calculating income. (4) Subject to any or other adjustment under this Act, where
a person or an associate of a person derives an amount “the
compensation amount” which compensates for or represents
recovery of actual or expected costs or incomings for an asset
or liability or a loss in value of an asset or increase in a liability,
the compensation amount shall be included in the incomings
for the asset or liability, as the case requires. Subdivision B: Special Rules
42.

ability,
the compensation amount shall be included in the incomings
for the asset or liability, as the case requires. Subdivision B: Special Rules
42.

Where a person realises an asset in any of the manners
described in section 39(d) to (h), the person shall be treated as-
(a) having parted with ownership of the asset and deriving
an amount in respect of the realisation equal to the
market value of the asset at the time of the realisation;
and
(b) reacquiring the asset and incurring expenditure of the
amount referred to in paragraph (a) in the acquisition. 43. Where on divorce settlement or bona fide separation
agreement an individual transfers an asset to a spouse or
former spouse and an election for this subsection to apply is
made by the spouse or former spouse in writing-
(a) the individual is treated as deriving an amount in
respect of the realisation equal to the net cost of the
asset immediately before the realisation; and
(b) the spouse or former spouse is treated as incurring
expenditure of the amount referred to in paragraph (a)
in acquiring the asset. Realisation with
retention of asset
Transfer of asset
to spouse or
former spouse

re of the amount referred to in paragraph (a)
in acquiring the asset. Realisation with
retention of asset
Transfer of asset
to spouse or
former spouse

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E. 2023]
608
44.–(1) Subject to the provisions of this section and section 43,
where a person realises an asset by way of transfer of ownership
of the asset to an associate of the person or by way of transfer
to any other person by way of gift-
(a) the person shall be treated as deriving an amount in
respect of the realisation equal to the greater of the
market value of the asset or the net cost of the asset
immediately before the realisation; and
(b) the person who acquires ownership of the asset shall be
treated as incurring expenditure of the amount referred
to in paragraph (a) in the acquisition.

he person who acquires ownership of the asset shall be
treated as incurring expenditure of the amount referred
to in paragraph (a) in the acquisition.

(2) Where a person realises an asset, being a business
asset, depreciable asset or trading stock, by way of transfer of
ownership of the asset to an associate of the person and the
requirements of subsection (4) are met -
(a) the person shall be treated as deriving an amount in
respect of the realisation equal to the net cost of the
asset immediately before the realisation; and
(b) the associate shall be treated as incurring expenditure
of the amount referred to in paragraph (a) in acquiring
the asset. (3) For purposes of subsection (2), the net cost of a
depreciable asset at the time of its realisation is equal to its
share of the written down value of the pool to which it belongs
at that time apportioned according to the market value of all
the assets in the pool.

share of the written down value of the pool to which it belongs
at that time apportioned according to the market value of all
the assets in the pool.

(4) The requirements specified in subsection (2) shall be -
(a) either the person or the associate is an entity;
(b) the asset or assets are business assets, depreciable assets
or trading stock of the associate immediately after
transfer by the person;
(c) at the time of the transfer-
(i) the person and the associate are residents; and
(ii) the associate or, in the case of an associate
partnership, none of its partners is exempt from
income tax;
Transfer of asset
to associate or for
no consideration

te or, in the case of an associate
partnership, none of its partners is exempt from
income tax;
Transfer of asset
to associate or for
no consideration

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.609
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
(d) there is continuity of underlying ownership in the asset
of at least fifty percent; and
(e) an election for subsection (2) to apply is made by both
the person and the associate in writing. 45.–(1) This section shall apply where a person involuntarily
realises an asset in any of the manners described in section
39(a), acquires a replacement asset of the same type within one
year of the realisation and elects in writing for this subsection
to apply.

in section
39(a), acquires a replacement asset of the same type within one
year of the realisation and elects in writing for this subsection
to apply.

(2) Where this section applies, the person shall be treated as -
(a) deriving an amount in respect of the realisation equal
to-
(i) the net cost of the asset immediately before the
realisation; plus
(ii) the amount, if any, by which amounts derived
in respect of the realisation exceed expenditure
incurred in acquiring the replacement asset,
calculated ignoring this section; and
(b) incurring expenditure in acquiring the replacement
asset equal to -
(i) the amount referred to in paragraph (a)(i); plus
(ii) the amount, if any, by which expenditure incurred
in acquiring the replacement asset exceed amounts
derived in respect of the realisation calculated
ignoring this section. (3) For purposes of this section, the net cost of a depreciable
asset at the time of its realisation is equal to its share of the
written down value of the pool to which it belongs at that time
apportioned according to the market value of all the assets in
the pool. (4) The regulations may prescribe the circumstances in
which the replacement of one security in a corporation with
another security in a corporation, including as a result of
reconstruction, constitutes an involuntary realisation.

one security in a corporation with
another security in a corporation, including as a result of
reconstruction, constitutes an involuntary realisation.

Involuntary
realisation
of asset with
replacement

Involuntary
realisation
of asset with
replacement

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E. 2023]
610
46. Subject to the provisions of section 32, where rights or
obligations with respect to an asset owned by one person are
created in another person, including by way of lease of an asset
or part thereof, then –
(a) where the rights or obligations are permanent, the
person shall be treated as realising part of the asset but
is not treated as acquiring any new asset or liability; and
(b) where the rights or obligations are temporary or
contingent, the person is not treated as realising part of
the asset or liability but as acquiring a new asset. 47.–(1) Where a person acquires one or more assets by way of
transfer at the same time or as part of the same arrangement,
the expenditure incurred in acquiring each asset shall be
apportioned between the assets according to their market
values at the time of acquisition.

the expenditure incurred in acquiring each asset shall be
apportioned between the assets according to their market
values at the time of acquisition.

(2) Where a person realises one or more assets by way of transfer
at the same time or as part of the same arrangement, the amounts
derived in realising each asset shall be apportioned between the
assets according to their market values at the time of realisation. (3) Where a person who owns an asset realises part of it, the
net cost of the asset immediately before the realisation shall be
apportioned between the part of the asset realised and the part
retained according to their market values immediately after
the realisation. PART IV
RULES APPLICABLE TO PARTICULAR
TYPES OF PERSONS
Division I: In General
Subdivision A: Partnerships
48.–(1) Notwithstanding section 4 but subject to the rest of
this Act, a partnership shall not be liable to pay income tax
with respect to its total income and shall not be entitled to any
tax credit with respect to that income. Realisation by
separation
Apportionment
of costs and
incomings
Principles of
taxation

l not be entitled to any
tax credit with respect to that income. Realisation by
separation
Apportionment
of costs and
incomings
Principles of
taxation

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.611
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
(2) Partnership income or a partnership loss of a partnership
shall be allocated to the partners in accordance with this
Subdivision. (3) Amounts derived and expenditure incurred by
partners in common shall be treated as derived or incurred by
partnership and not the partners. (4) Assets owned and liabilities owed by partners in
common shall be treated as owned or owed by the partnership
and not the partners and shall be treated as-
(a) in the case of assets, acquired when they begin to be so
owned;
(b) in the case of liabilities, incurred when they begin to be
so owed; and
(c) realised when they cease to be so owned or owed. (5) All activities of a partnership shall be treated as
conducted in the course of the partnership business.

d when they cease to be so owned or owed. (5) All activities of a partnership shall be treated as
conducted in the course of the partnership business.

(6) Subject to this Part and Division II of Part III,
arrangements between a partnership and its partners shall
be recognised other than the following, which are taken into
account in determining a partner’s share under section 50(4) -
(a) loans made by a partner to a partnership and any
interest paid with respect thereto; and
(b) services provided by a partner to a partnership,
including by way of employment, and any service fee or
income from employment payable with respect thereto. (7) Subject to any consequences under section 56, if on
the change of partners in a partnership at least two existing
partners continue, the partnership shall be treated as the same
entity both before and after the change. 49.–(1) Partnership income from a business of a resident or
non-resident partnership for a year of income shall be the
chargeable income of the partnership for the year of income
from the business calculated as if the partnership were a
resident partnership. (2) A partnership loss from a business of a resident or non-
resident partnership for a year of income shall be the loss
Partnership
income or loss

p. (2) A partnership loss from a business of a resident or non-
resident partnership for a year of income shall be the loss
Partnership
income or loss

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E. 2023]
612
of the partnership for the year of income from the business
calculated under section 19(4). 50.–(1) For purposes of calculating a partner’s income from a
partnership for a year of income of the partner there shall be -
(a) included the partner’s share of any partnership income
under section 49(1); and
(b) deducted the partner’s share of any partnership loss
under section 49(2),
for a year of income of the partnership ending on the last day
of or during the year of income of the partner. (2) Partnership income or a partnership loss allocated to
partners under subsection (1)-
(a) shall retain its character as to type and source;
(b) shall be treated as an amount derived or expenditure
incurred, respectively, by a partner at the end of the
partnership’s year of income; and
(c) shall be allocated to the partners proportionately to
each partner’s share, unless the Commissioner, by
notice in writing, permits otherwise.

and
(c) shall be allocated to the partners proportionately to
each partner’s share, unless the Commissioner, by
notice in writing, permits otherwise.

(3) At the time partnership income is treated as derived
by partners under subsection (2)(b), any income tax under
this Act or foreign income tax paid or treated as paid by the
partnership with respect to the partnership income shall be
allocated to the partners, proportionately to each partner’s
share, and treated as having been paid by them. (4) For purposes of this section and subject to section 48(6),
a “partner’s share” is equal to the partner’s percentage interest
in any income of the partnership as set out in the partnership
arrangement. 51.–(1) The following costs and incomings shall be included
in the cost of a partner’s membership interest in a partnership,
namely-
(a) amounts included in calculating the partner’s income
under section 50 (1)(a), at the time of that inclusion;
and
Taxation of
partners
Cost and
incomings
of partner’s
membership
interest in
partnership

me
under section 50 (1)(a), at the time of that inclusion;
and
Taxation of
partners
Cost and
incomings
of partner’s
membership
interest in
partnership

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.613
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
(b) the partner’s share determined under section 50(4)
of exempt amounts and final withholding payments
derived by the partnership at the time the amount or
payment is derived. (2) The following shall be included in the incomings for a
partner’s membership interest in a partnership-
(a) amounts deducted in calculating the partner’s income
under section 50(1)(b), at the time of deduction;
(b) distributions made by the partnership to the partner, at
the time of distribution; and
(c) the partner’s share determined under section 50(4) of
consumption or excluded expenditure incurred by the
partnership, at the time the expenditure is incurred. Subdivision B: Trusts
52.–(1) A trust or unit trust shall be liable to tax separately
from its beneficiaries and separate calculations of total income
shall be made for separate trusts regardless of whether they
have the same trustees. (2) Distributions of a trust or unit trust shall be included in
calculating the income of the trust’s beneficiary.

hether they
have the same trustees. (2) Distributions of a trust or unit trust shall be included in
calculating the income of the trust’s beneficiary.

(3) For purposes of subsection (2), in the case of an
individual’s testamentary trust incorporated for purposes
of social protection of settlor’s surviving minor dependants,
distributions shall not include the trust’s discharge of its
primary obligations. (4) Amounts derived and expenditure incurred by a trust
or a trustee in the capacity of trustee other than as a bare
agent, whether or not derived or incurred on behalf of another
person and whether or not any other person is entitled to such
an amount or income constituted by such an amount, shall be
treated as derived or incurred by the trust and not any other
person. (5) Assets owned and liabilities owed by a trust or a trustee
in the capacity of trustee other than as a bare agent shall be
treated as owned or owed by the trust and not any other person. Taxation of trusts
Acts Nos. 10 of 2015 s. 117
8 of 2020 s. 32

s a bare agent shall be
treated as owned or owed by the trust and not any other person. Taxation of trusts
Acts Nos. 10 of 2015 s. 117
8 of 2020 s. 32

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E. 2023]
614
(6) Where a receiver referred to in section 77(5) of the Tax
Administration Act is a trustee -
(a) the trust shall be treated as conducting or continuing
the activities of the person whose assets come into the
possession of the receiver; and
(b) amounts derived and expenditure incurred by the trust
shall be included in calculating the income of the trust
in the same manner as they would have been included
in calculating the income of the person if they were
derived or incurred by the person prior to the event
resulting in the appointment of the receiver. (7) Subject to this Part and Division II of Part III,
arrangements between a trust and its trustees or beneficiaries
shall be recognised. Subdivision C: Corporations
53.–(1) A corporation shall be liable to tax separately from its
shareholders.

stees or beneficiaries
shall be recognised. Subdivision C: Corporations
53.–(1) A corporation shall be liable to tax separately from its
shareholders.

(2) Amounts derived and expenditure incurred jointly or in
common by the managers or shareholders for the purposes of a
corporation that lacks legal capacity, shall be treated as derived
or incurred by the corporation and not any other person. (3) Assets owned and liabilities owed jointly or in common
by the managers or shareholders for the purposes of a
corporation that lacks legal capacity shall be treated as owned
or owed by the corporation and not any other person. (4) Subject to this Part and Division II of Part III,
arrangements between a corporation and its managers or
shareholders shall be recognised. 54.–(1) Dividends-
(a) distributed by a resident corporation shall be taxed in
the hands of the corporation’s shareholders in the form
of a final withholding tax; and
(b) distributed by a non-resident corporation shall be
included in calculating the income of the shareholders. Cap. 438
Taxation of
corporations
Taxation of
shareholders
Acts Nos. 8 of 2012 s. 25
2 of 2014 s. 36
2 of 2016 s. 24

g the income of the shareholders. Cap. 438
Taxation of
corporations
Taxation of
shareholders
Acts Nos. 8 of 2012 s. 25
2 of 2014 s. 36
2 of 2016 s. 24

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.615
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
(2) A dividend distributed by a resident corporation to
another resident corporation shall be taxed at the rate provided
for in the First Schedule where the corporation receiving the
dividend holds twenty five percent or more of the shares in
the corporation distributing the dividend and controls, either
directly or indirectly, twenty five percent or more of the voting
power in the corporation. Division II: General Provisions Applicable to Entities
55. Subject to the provisions of section 44(2), where an asset
is realised by way of transfer of ownership of the asset by an
entity to one of its members or vice versa -
(a) the transferor shall be treated as deriving an amount in
respect of the realisation equal to the market value of
the asset immediately before the realisation; and
(b) the transferee shall be treated as incurring expenditure
of the amount referred to in paragraph (a) in the
acquisition.

efore the realisation; and
(b) the transferee shall be treated as incurring expenditure
of the amount referred to in paragraph (a) in the
acquisition.

56.–(1) Where the underlying ownership of an entity changes
by more than fifty percent as compared with that ownership
at any time during the previous three years, the entity shall be
treated as realising any assets owned and any liabilities owed
by it immediately before the change. (2) Subject to the provisions of subsection (4), where there
is a change in ownership of the type referred to in subsection
(1), after the change the entity shall not be permitted-
(a) to deduct a loss under section 19(1) that was incurred
by the entity prior to the change;
(b) in a case where the entity has, prior to the change,
included an amount in calculating income in terms
of section 25(2) or (4), claim a deduction under those
provisions after the change;
(c) to carry back a loss under section 26(3) that was
incurred after the change to a year of income occurring
before the change;
Asset dealings
between entities
and members
Change in control
Acts Nos. 8 of 2012 s. 26
2 of 2014 s. 37
16 of 2015 s. 17
2 of 2016 s. 25
7 of 2023 s. 56

set dealings
between entities
and members
Change in control
Acts Nos. 8 of 2012 s. 26
2 of 2014 s. 37
16 of 2015 s. 17
2 of 2016 s. 25
7 of 2023 s. 56

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E. 2023]
616
(d) to reduce under section 36(3) gains from the realisation
of investment assets after the change by losses on the
realisation of investment assets before the change; or
(e) to carry forward foreign income tax under section 98(3)
that was originally paid with respect to foreign source
income derived by the entity prior to the change. (3) Where there is a change in ownership of the type referred
to in subsection (1) during a year of income of the entity, the
parts of the year of income before and after the change shall be
treated as separate years of income.

n (1) during a year of income of the entity, the
parts of the year of income before and after the change shall be
treated as separate years of income.

(4) The provisions of subsection (2) shall not apply where
for a period of two years after a change of the type mentioned
in subsection (1), the entity -
(a) conducts the business or, where more than one business
was conducted, all of the businesses that it conducted
at any time during the twelve month period before
the change and conducts them in the same manner as
during the twelve month period; and
(b) conducts no business or investment other than those
conducted at any time during the twelve month period
before the change. (5) The preceding provisions of this section shall not
apply where change of underlying ownership referred to in
subsection (1)-
(a) is a result of allotment of new membership interest of
the entity; or
(b) is a sole result of transfer of membership interest of a
resident entity to another resident person.”
(6) An entity referred to under this section shall have the duty
to report to the Commissioner immediately before and after the
changes referred to under subsection (1) have occurred.

his section shall have the duty
to report to the Commissioner immediately before and after the
changes referred to under subsection (1) have occurred.

57.–(1) Where a distribution is made by an entity to an acquirer
in the course of an income or dividend stripping arrangement,
the arrangement shall be treated as though-
Income or
dividend
stripping

to an acquirer
in the course of an income or dividend stripping arrangement,
the arrangement shall be treated as though-
Income or
dividend
stripping

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.617
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
(a) the payment referred to in subsection (2) is a
distribution made by the entity to the original member
of the entity; and
(b) the distribution made by the entity to the acquirer is an
amount equal to the distribution less the amount of the
payment.

mber
of the entity; and
(b) the distribution made by the entity to the acquirer is an
amount equal to the distribution less the amount of the
payment.

(2) For the purpose of subsection (1) “income or dividend
stripping arrangement” means an arrangement under which -
(a) an entity has accumulated, current or expected income
“the “income”;
(b) a person “the acquirer” acquires a membership interest
in the entity and the acquirer or an associate of the
acquirer makes a payment “the payment”, whether or
not in respect of the acquisition and whether or not the
payment is at the time of acquisition, to another person
who is or was a member in the entity “the original
member” or an associate of such another person;
(c) the payment reflects, in whole or in part, the income of
the entity; and
(d) after the acquirer acquires the interest in the entity,
the entity makes a distribution to the acquirer that
represents, in whole or in part, the income. PART V
SPECIAL INDUSTRIES
Division I: Insurance Business
58.–(1) For purposes of this Act, a person’s activities in
conducting a general insurance business shall be treated as a
business separate from any other activity of the person and
the person’s income or loss from the business for any year of
income shall be calculated separately.

eparate from any other activity of the person and
the person’s income or loss from the business for any year of
income shall be calculated separately.

(2) For purposes of calculating the income of a person for a
year of income from a general insurance business-
(a) there shall be included, together with any other
amounts to be included under other provisions of this
Act-
General insurance
business

e business-
(a) there shall be included, together with any other
amounts to be included under other provisions of this
Act-
General insurance
business

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E. 2023]
618
(i) premiums derived during the year of income by
the person as insurer, including as re-insurer, in
conducting the business; and
(ii) proceeds derived during the year of income by
the person under any contract of re-insurance in
respect of proceeds referred to in paragraph (b)
(i); and
(b) there shall be deducted, together with any other
amounts deductible under other provisions of this
Act -
(i) proceeds incurred during the year of income by
the person as insurer, including as re-insurer, in
conducting the business; and
(ii) premiums incurred during the year of income by
the person under any contract of re-insurance in
respect of proceeds referred to in subparagraph
(i). 59.–(1) For purposes of this Act, a person’s activities in
conducting a life insurance business shall be treated as a
business separate from any other activity of the person and
the person’s income or loss from the business for any year of
income shall be calculated separately.

eparate from any other activity of the person and
the person’s income or loss from the business for any year of
income shall be calculated separately.

(2) For purposes of calculating the income of a person for a
year of income from a life insurance business -
(a) there shall be included any amounts to be included
under other provisions of this Act but the following
amounts shall not be included and not be an income of
the person-
(i) premium derived during the year of income by
the person as insurer, including as re-insurer, in
conducting the business; and
(ii) proceeds derived during the year of income by
the person under any contract of re-insurance in
respect of proceeds referred to in paragraph (b)
(i); and
Life insurance
business

e year of income by
the person under any contract of re-insurance in
respect of proceeds referred to in paragraph (b)
(i); and
Life insurance
business

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.619
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
(b) there shall be deducted only the expenses of managing
the business’s investments including commission that
are deductible under other provisions of this Act but the
following amounts shall not be deductible and not be
included in the cost of any asset or liability of the person-
(i) proceeds incurred during the year of income by
the person as insurer, including as re-insurer, in
conducting the business; and
(ii) premiums incurred during the year of income by
the person under any contract of re-insurance in
respect of proceeds referred to in subparagraph (i). 60.–(1) Subject to subsection (2) and sections 58 and 59, for
purposes of calculating the income of a person, the treatment
of proceeds derived by the person from insurance shall be
determined in accordance with section 31.

calculating the income of a person, the treatment
of proceeds derived by the person from insurance shall be
determined in accordance with section 31.

(2) Subject to the provisions of sections 58 and 59 , gains of
an insured from life insurance shall be-
(a) in the case where the proceeds are paid by a resident
insurer, exempt in the hands of the insured; and
(b) in the case where the proceeds are paid by a non-
resident insurer, included in calculating the income of
the insured. (3) For purposes of this section, “gains of an insured from
life insurance” means the extent to which proceeds from life
insurance paid by an insurer exceed premiums paid to the
insurer with respect to the insurance. Division II: Retirement Savings
61.–(1) Subject to the provisions of subsection (2), an
individual may claim a reduction in calculating total income
for a year of income equal to retirement contributions made
during the year of income by-
(a) the individual; or
(b) an employer of the individual where the contribution
is included in calculating the individual’s income from
the employment,
Proceeds from
insurance
Retirement
contributions
to approved
retirement fund

n
is included in calculating the individual’s income from
the employment,
Proceeds from
insurance
Retirement
contributions
to approved
retirement fund

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E. 2023]
620
to an approved retirement fund in respect of an interest of the
individual or a spouse of the individual in the fund. (2) The reduction claimed by an individual under subsection
(1) for any year of income shall be the actual contribution or
the statutory amount required whichever is lesser. 62.–(1) Subject to the provisions of this section, the provisions
of Parts III and IV shall apply to a retirement fund and the
calculation of income of a retirement fund. (2) For purposes of calculating the income of a retirement
fund-
(a) retirement contributions received by the fund shall
not be included in the calculation and shall not be an
incoming of the fund; and
(b) retirement payments shall not be deductible and are
not included in the cost of any asset or liability of the
fund.

e an
incoming of the fund; and
(b) retirement payments shall not be deductible and are
not included in the cost of any asset or liability of the
fund.

(3) Where an approved retirement fund ceases to be an
approved retirement fund during a year of income, its income
tax payable under section 4(1)(a) for the year of income shall be
increased by an amount equal to the income tax rate applicable
to corporations applied to -
(a) all retirement contributions received by the fund from
or on behalf of resident individuals and total income
of the fund during the period from its most recent
approval as an approved retirement fund to when it
ceased to be so approved, less;
(b) all retirement payments made by the fund from its
most recent approval as an approved retirement fund
to when it ceased to be so approved in respect of
individuals who were resident during that period. 63.–(1) Gains from an interest in an unapproved retirement
fund shall be-
(a) in the case where the retirement payments are paid by
a resident fund, exempt in the hands of the payee; and
Taxation of
retirement funds
Act No. 15 of 2004 s. 30
Retirement
payments
Act No. 15 of 2004 s. 31

esident fund, exempt in the hands of the payee; and
Taxation of
retirement funds
Act No. 15 of 2004 s. 30
Retirement
payments
Act No. 15 of 2004 s. 31

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.621
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
(b) in the case where the retirement payments are paid by a
non-resident fund, included in calculating the income
of the payee. (2) For purposes of this section, “gain from an interest in
an unapproved retirement fund” means the extent to which
retirement payments made by an unapproved retirement
fund in respect of an interest in the fund exceed retirement
contributions paid to the fund in respect of the interest. Division III: Charitable Organisations,
Clubs and Trade Associations
64.–(1) A charitable organisation or religious organisation
shall be treated as conducting a business with respect to its
functions referred to in subsection (8) as the “charitable
business”.

gious organisation
shall be treated as conducting a business with respect to its
functions referred to in subsection (8) as the “charitable
business”.

(2) For purposes of calculating the income of a charitable
organisation or religious organisation for any year of income
from its charitable business -
(a) there shall be included, together with any other amounts
required to be included under other provisions of this
Act, all gifts and donations received by the organisation;
and
(b) there shall be deducted, together with any other
amounts deductible under other provisions of this Act -
(i) amounts applied in pursuit of the organisation or
religious organisation’s functions referred to in
subsection (8) by providing reasonable benefits
to resident persons or, where the expenditure on
the benefits has a source in the United Republic,
persons resident anywhere; and
(ii) twenty five percent of the organisation or
religious organisation’s income from its charitable
business calculated without any deduction under
subparagraph (i) and any investments. (3) This subsection shall apply to any amount applied by a
charitable organisation or religious organisation during a year
Charitable
organisations
Act No. 10 of 2015 s. 118

ll apply to any amount applied by a
charitable organisation or religious organisation during a year
Charitable
organisations
Act No. 10 of 2015 s. 118

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E. 2023]
622
of income other than in the manner referred to in subsection
(2)(b)(i) or as a reasonable payment to a person for assets or
services rendered to the organisation by the person. (4) Where subsection (3) applies-
(a) the organisation or religious organisation shall
be treated as conducting a business other than its
charitable business; and
(b) the sum of amounts to which that subsection applies for
the year of income less any income of the organisation
or religious organisation from a business other than its
charitable business or business referred to in paragraph
(a) shall be treated as income of the organisation or
religious organisation that has a source in the United
Republic derived during the year of income from the
business referred to in paragraph (a).

n or
religious organisation that has a source in the United
Republic derived during the year of income from the
business referred to in paragraph (a).

(5) Notwithstanding the provision of section 19, a charitable
organisation or religious organisation -
(a) may not set any loss from its charitable business against
its income from any other business; and
(b) may only set losses from any other business against
income from any such other business. (6) Where a charitable organisation or religious organisation
ceases to be a charitable organisation or religious organisation
during a year of income -
(a) the organisation or religious organisation shall be
treated as conducting a business other than its previous
charitable business; and
(b) there shall be included in calculating the organisation
or religious organisation’s income for the year of
income from the business referred to in paragraph (a)
any amounts claimed as a deduction under subsection
(2)(b)(ii) during that year of income or any prior year of
income during which the organisation was a charitable
organisation or religious organisation. (7) Where a charitable organisation or religious organisation
wishes to save funds for a project that is detailed in material

religious organisation. (7) Where a charitable organisation or religious organisation
wishes to save funds for a project that is detailed in material

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.623
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
particulars and which the organisation is committed to,
the organisation or religious organisation may apply to the
Commissioner and the Commissioner may approve the saving
as meeting the requirements of subsection (2)(b)(i). (8) For purposes of this section, “charitable organisation”
means a resident entity of a public character that satisfies the
following conditions:
(a) the entity was established and functions solely as an
organisation for-
(i) the relief of poverty or distress of the public;
(ii) the advancement of education; or
(iii) the provision of general public health, education,
water or road construction or maintenance; and
(b) the entity has been issued with a ruling by the
Commissioner under section 11 of the Tax Administration
Act currently in force stating that it is a charitable
organisation or religious organisation.

Commissioner under section 11 of the Tax Administration
Act currently in force stating that it is a charitable
organisation or religious organisation.

65.–(1) Subject to subsection (2), the activities of a club, trade
association or similar institution shall be treated as a business
and for the purposes of calculating the club, association or
institution’s income for a year of income from that business
there shall be included, together with any other amounts to
be included under other provisions of this Act, entrance fees,
subscriptions and other amounts derived from members
during the year of income. (2) Where three-quarters or more of the amounts to be
included in calculating the income of a members’ club or trade
association for a year of income from the business referred
to in subsection (1) are derived from members of the club or
association, the income from that business shall be exempt and
shall not constitute chargeable income of the club or association. (3) For purposes of this section -
“members club” means a club or similar institution all the
assets of which are owned in common by, tested ignoring
section 53(3) or held in trust for the members thereof;
Cap.438
Clubs and trade
associations

e
assets of which are owned in common by, tested ignoring
section 53(3) or held in trust for the members thereof;
Cap.438
Clubs and trade
associations

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E. 2023]
624
“member” means -
(a) in the case of a club or similar institution, a person who,
while a member, is entitled to an interest in all the assets
of the club or institution in the event of its liquidation
or who is entitled to vote at a general meeting of the
club or institution; and
(b) in the case of a trade association, a person who is entitled
to vote at a general meeting of the association; and
“trade association” means any association of persons-
(a) that are all separately engaged in a particular type of
business; and
(b) formed with the main object of safeguarding or
promoting the business interests of such persons. Division IV: Minerals1
Subdivision A: Prospecting and Mining
66. This subdivision applies where a person is conducting
mining operations without a separate license solely for
processing, smelting or refining of minerals. [s.

ivision applies where a person is conducting
mining operations without a separate license solely for
processing, smelting or refining of minerals. [s.

65A]
67.–(1) A person conducting mining operations shall be
subject to income tax with respect to those operations as
provided by this Act, and as modified by this subdivision. (2) The income tax payable in respect of mining operations
for a year of income shall be calculated by applying the rate set
out in paragraph 1(5) of the First Schedule to a person’s total
income from mining operations for the year of income. (3) Subject to subsection (2), where a person has other total
income, that income shall be charged at the appropriate rate
under the First Schedule. 1 This Division was added by Act No. 20 of 2016. Application of
subdivision
Act No. 2 of 2016 s. 26
Principles of
taxation
Acts Nos. 2 of 2016 s. 26
4 of 2018 s. 25

n was added by Act No. 20 of 2016. Application of
subdivision
Act No. 2 of 2016 s. 26
Principles of
taxation
Acts Nos. 2 of 2016 s. 26
4 of 2018 s. 25

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.625
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
(4) For purposes of calculating a person’s total income from
mining operations-
(a) all mining operations conducted by a person shall
be treated as business activities save as arrangement
referred to under section 73 of this Act;
(b) each separate mining operation shall be treated as an
independent business and the person must prepare
accounts for that business separate from any other
activity of the person; and
(c) the person shall calculate chargeable income and
income tax liability for the business independently for
each year of income.

y of the person; and
(c) the person shall calculate chargeable income and
income tax liability for the business independently for
each year of income.

(5) The provisions of section 33 shall apply-
(a) to arrangements between a separate mining operation
and other activities of the person conducting the
mining operation including mining operations under
a different mineral rights or processing, smelting or
refining operations of the person;
(b) as though the arrangements were conducted between
associated persons; and
(c) so as to treat the transfer of an asset to or from a separate
mining operation as an acquisition and disposal of the asset. (6) Where subsection (5) applies, section 33 shall apply to
arrangements between the persons with respect to the mining
operations as though they were associated persons. [s. 65B]
68.–(1) Subject to this section, each mineral right shall
constitute a separate mining operation.

ons as though they were associated persons. [s. 65B]
68.–(1) Subject to this section, each mineral right shall
constitute a separate mining operation.

(2) Where a person holding a prospecting licence is granted
a mining licence and the mining licence area falls wholly
within the prospecting licence area, the following conditions
shall apply-
(a) mining operations conducted by the person with
respect to the prospecting licence to the date of grant
of the mining licence shall be treated as conducted with
respect to the separate mining operation; and
Separate mining
operations
Act No. 2 of 2016 s. 26

the mining licence shall be treated as conducted with
respect to the separate mining operation; and
Separate mining
operations
Act No. 2 of 2016 s. 26

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E. 2023]
626
(b) from the date of grant of the mining licence, mining
operations conducted with respect to the new
prospecting licence outside the mining licence area
shall be treated as a new separate mining operation. (3) Where a person holds a mining licence in relation
to mining area and such mining area is extended mining
operations conducted by the person with respect to the mining
licence in both the original area and the extended area shall
be treated as conducted with respect to the same mining
operation.

respect to the mining
licence in both the original area and the extended area shall
be treated as conducted with respect to the same mining
operation.

(4) For purposes of clarity, the prospecting and mining ring
fencing set up by this section and section 67-
(a) starts with the grant of a prospecting licence and
prospecting operations conducted with respect to that
licence;
(b) may, subject to the limitations in this section, continue
into a mining licence granted with respect to the
prospecting licence and mining operations conducted
with respect to that licence; and
(c) ends at the point minerals from the mining operations
are sufficiently processed to produce a first saleable
product. (5) The Minister may, after consultation with the Minister
responsible for mining, make regulations as may be necessary
for the better carrying out the provisions of this section. [s. 65C]
69. In calculating a person’s income from a separate mining
operations for a year of income, there shall be included,
together with any other amounts required to be included
under other provisions of this Act, the following:
(a) incomings derived from the disposal of minerals
produced from the licence area;
(b) amounts received in respect of the sale of data or
information pertaining to the operations or mineral
reserves;
Income
from mining
operations
Act No.

amounts received in respect of the sale of data or
information pertaining to the operations or mineral
reserves;
Income
from mining
operations
Act No.

2 of 2016 s. 26

2 of 2016 s. 26

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.627
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
(c) amounts required to be included under paragraph 5
of the Third Schedule including from the assignment
or other disposal of an interest in the mineral right
with respect to which the operation is conducted after
commencement of production: and
(d) amounts required to be included under section 74 in
respect of a surplus in a rehabilitation fund. [s.

ucted after
commencement of production: and
(d) amounts required to be included under section 74 in
respect of a surplus in a rehabilitation fund. [s.

65D]
70.–(1) In calculating a person’s income from a separate
mining operation for a year of income, there shall be deducted,
together with any other amounts deductible under other
provisions of this Act, the following-
(a) annual charges incurred by the person under the
Mining Act or Mining Development Agreements with
respect to the mineral rights;
(b) depreciation allowances granted with respect to the
mining operation and calculated in accordance with
paragraph 5 of the Third Schedule;
Provided that, depreciation basis for purposes of
depreciation allowance shall not exceed the cost of investment
as determined by the Commission under section 22 of the
Mining Act;
(c) contributions to and other expenses incurred in respect
of a rehabilitation fund for the operation as required
by the law or approved under Mining Development
Agreements by the Minister responsible for mining;
and
(d) expenses incurred in respect of acquisition of
rehabilitation bond.

nder Mining Development
Agreements by the Minister responsible for mining;
and
(d) expenses incurred in respect of acquisition of
rehabilitation bond.

(2) Deduction shall not be allowed in calculating income
from separate mining operations-
(a) under sections 15, 16, 17 or 26;
(b) for an unrelieved loss under section 19, except as
permitted by section 71;
(c) for a bonus payment referred to in section 72; or
Deduction
for mining
operations
Acts Nos. 2 of 2016 s. 26
7 of 2017 s. 34
Cap. 123
Cap. 123

71;
(c) for a bonus payment referred to in section 72; or
Deduction
for mining
operations
Acts Nos. 2 of 2016 s. 26
7 of 2017 s. 34
Cap. 123
Cap. 123

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E. 2023]
628
(d) for expenses incurred by the person implementing an
approved mine closure fund in excess of the amount
contributed to the approved rehabilitation fund. [s.

xpenses incurred by the person implementing an
approved mine closure fund in excess of the amount
contributed to the approved rehabilitation fund. [s.

65E]
71.–(1) The provisions of section 19 shall apply to unrelieved
losses of a person from a separate mining operation with the
following conditions:
(a) losses from the separate mining operations may be
deducted only in calculating future income from that
operation and not income from any other activity
whether a mining operation under a different mineral
right, processing, smelting, refining or a non-mining
activity;
(b) income from the separate mining operations may not be
reduced by a loss from any other activity whether a mining
operation under a different mineral rights, processing,
smelting, refining or a non-mining activity; and
(c) income from the separate mining operation for any
year of income may be reduced by reason of the use of
unrelieved losses from that operation subject to other
limitations imposed by section 19 but not below thirty
percent of that income before any reduction for losses. (2) The perpetual loss making corporation rules shall not
apply in conducting mining operations under a prospecting
licence. [s.

reduction for losses. (2) The perpetual loss making corporation rules shall not
apply in conducting mining operations under a prospecting
licence. [s.

65F]
72.–(1) Bonus payments for the grant, transfer or assignment of
a mineral rights, whether in form of a lump sum or dependent
on or calculated by reference to specific production targets, are
not deductible in calculating income from a separate mining
operation. (2) In this section, “bonus payment” shall not include
annual charges and royalties paid under the Mining Act or
Mining Development Agreements. [s. 65G]
Losses from
mining
operations
Act No. 2 of 2016 s. 26
Bonus payments
Act No. 2 of 2016 s. 26
Cap. 123

g Act or
Mining Development Agreements. [s. 65G]
Losses from
mining
operations
Act No. 2 of 2016 s. 26
Bonus payments
Act No. 2 of 2016 s. 26
Cap. 123

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.629
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
73.–(1) Mineral rights shall be an asset which is separate
from any other interest in the land that constitutes the license
area and separate from any other asset employed in mining
operations. (2) For purposes of farm-out, arrangement mineral rights
shall be deemed as investment asset when realised before
commencement of production. (3) Where mineral right is realised in terms of subsection
(2), relevant provisions under this Act in respect of realisation
of investment or business asset shall apply. (4) Where mineral right is realised together with other
assets used in mining operations or where a mineral right is
realised in part, the provisions of section 47 shall apply for
purposes of apportionment of expenditure, costs and amounts
derived from the realisation. (5) Incomings from the realisation of mineral rights include
amounts derived by the holder of the right from the realisation
and also include amounts to be derived in the future from the
realisation in accordance with section 38(b).

e holder of the right from the realisation
and also include amounts to be derived in the future from the
realisation in accordance with section 38(b).

(6) For purposes of section 38(b), an amount including any
form of payment or benefit to be derived in the future from
the realisation of an asset shall be taken into account as an
incoming at its market value at the time of the realisation or in
any other case, in accordance with section 27(1)(d). (7) In calculating the market value of an obligation to pay a
future amount, there shall apply present value of a reasonable
estimate of the amount of the future payment. (8) An amount taken into consideration under subsections
(6) and (7) as incoming from the realisation of mineral rights
shall be included in the cost of the asset for the acquirer. (9) The right to receive a future amount shall be realised in
a different amount to the extent that the provisions of sections
25 and 41 shall apply to make adjustments. (10) The provisions of this section shall apply to the
realisation of mineral rights where the incomings from the
realisation include an overriding royalty. [s. 65H]
Realisation of
mineral rights
Act No. 2 of 2016 s. 26

mineral rights where the incomings from the
realisation include an overriding royalty. [s. 65H]
Realisation of
mineral rights
Act No. 2 of 2016 s. 26

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630
74.–(1) Rehabilitation fund shall be exempt from tax. (2) Amounts paid from a rehabilitation fund to meet
expenses of activities authorised by an approved mine closure
plan for which the fund was established are not income of the
mineral right holder which is otherwise required to meet those
expenses. (3) An amounts in a rehabilitation fund which are paid to
or come under the control of a mineral right holder and which
are not referred to in subsection (2) are included in calculating
income of the mineral rights holder from the associated
mineral operations. [s. 65I]
Subdivision B: Processing, Smelting and Refining
75.–(1) A licensee conducting processing, smelting or refining
with respect to minerals shall be subject to income tax with
respect to the activities as provided by this Act, and as modified
by this subdivision to the extent that there is no modification,
the standard rules in this Act shall apply.

as provided by this Act, and as modified
by this subdivision to the extent that there is no modification,
the standard rules in this Act shall apply.

(2) In calculating a licensee’s income from a business
which includes processing, smelting or refining of minerals,
there shall be deducted amounts deposited in respect of a
rehabilitation fund established for the licence. (3) There shall be no deduction allowed in calculating
income from a separate mining operation-
(a) under section 15, 16, 17 or 26;
(b) for an unrelieved loss under section 19, except as
permitted by section 71; or
(c) expenses incurred by the person in implementing
the rehabilitation plan for the operation in excess of
deposits in the rehabilitation fund. (4) Unrelieved losses of a licensee arising from conducting
a business that includes processing, smelting or refining may
be deducted under section 19 so as to reduce total income of
the licensee but not below thirty percent of total income before
any deduction for such an unrelieved loss. Rehabilitation
fund
Act No. 2 of 2016 s. 26
Licensee
conducting
processing,
smelting or
refining
Act No. 2 of 2016 s. 26

for such an unrelieved loss. Rehabilitation
fund
Act No. 2 of 2016 s. 26
Licensee
conducting
processing,
smelting or
refining
Act No. 2 of 2016 s. 26

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.631
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
(5) The provisions of section 74 shall apply to a rehabilitation
fund established for a processing, smelting or refining licence as
though a reference to “mineral rights holder” were a reference
to the “holder of that licence.”
(6) For purposes of this section, “licence” means a licence
granted in respect to processing, smelting or refining under
Mining Act. [s. 65J]
Division V: Petroleum2
Subdivision A: Petroleum Operations
76.–(1) A person conducting petroleum operations pursuant
to licence granted under the Petroleum Act shall be subject to
income tax with respect to those operations as prescribed by
this Act and as modified by this Division. (2) Income tax payable in respect to petroleum right for
a year of income shall be calculated by applying the rate set
out in paragraph 1(6) of the First Schedule to a person’s total
income from petroleum right for the year of income.

alculated by applying the rate set
out in paragraph 1(6) of the First Schedule to a person’s total
income from petroleum right for the year of income.

(3) Subject to subsection (2), where a person has other total
income, that income shall be charged at the appropriate rate
under the First Schedule. (4) For purposes of calculating a person’s total income from
petroleum right-
(a) all petroleum right conducted by a person shall be
treated as business activities save as arrangement
referred to under section 82;
(b) each separate petroleum right shall be treated as an
independent business and the person shall prepare
accounts for that business separate from any other
activity of the person; and
(c) a person shall calculate chargeable income and income
tax liability for the business independently for each
year of income. 2 This Division is added by Act No. 2 of 2016. Cap. 123
Principles of
taxation
Acts Nos. 2 of 2016 s.26
4 of 2018 s. 26
Cap. 392

each
year of income. 2 This Division is added by Act No. 2 of 2016. Cap. 123
Principles of
taxation
Acts Nos. 2 of 2016 s.26
4 of 2018 s. 26
Cap. 392

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632
(5) The provisions of section 33 shall apply-
(a) to arrangements between a separate petroleum right
and other activities of the person conducting the
petroleum right including other petroleum right or
midstream or downstream activities of the person;
(b) as though the arrangements were conducted between
associated persons; and
(c) so as to treat the transfer of an asset especially petroleum
to or from a separate petroleum right as an acquisition
and disposal of the asset. (6) Where subsection (5) applies, section 33 shall apply
to arrangements between the persons with respect to the
petroleum right as though they were associated persons. (7) The Minister may, after consultation with the Minister
responsible for mining, make regulations as may be necessary
for the better carrying out the provisions of this section. [s. 65K]
77.–(1) Subject to this section, petroleum operations pertaining
to each petroleum right shall constitute a separate petroleum
operation.

on. [s. 65K]
77.–(1) Subject to this section, petroleum operations pertaining
to each petroleum right shall constitute a separate petroleum
operation.

(2) Where a person holding an exploration petroleum right
which is partly converted into a development petroleum right,
the following conditions shall apply:
(a) petroleum operations conducted by the person in
respect of the exploration licence to the date of grant
of development licence are treated as conducted with
respect to the development licence, and so are treated
as conducted with respect to the same petroleum
right; and
(b) from the date of grant of the development licence
referred to in paragraph (a), exploration operations
conducted with respect to the area outside the
development area but within the exploration right shall
be treated as separate petroleum operation. Separate
petroleum rights
Act No. 2 of 2016 s. 26

development area but within the exploration right shall
be treated as separate petroleum operation. Separate
petroleum rights
Act No. 2 of 2016 s. 26

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.633
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
(3) For purposes of subsection (2), a person holds an
exploration petroleum right that is partly converted into a
development petroleum right, where-
(a) the person holds a petroleum right which is, or
dependent on an exploration licence including by
reason of a Production Sharing Agreement;
(b) a development licence is subsequently granted and the
development area falls wholly within the exploration
area; and
(c) as a consequence, the person holds a different petroleum
right with respect to the development area.

falls wholly within the exploration
area; and
(c) as a consequence, the person holds a different petroleum
right with respect to the development area.

(4) For purposes of this section and section 76 the upstream
ring fencing set up-
(a) all petroleum rights held by a person who conducts
petroleum operations shall be treated as business
activities save as arrangement referred to under
section 82;
(b) subject to the limitations in this section, may continue
into a development licence granted with respect to the
exploration licence and development and production
rights conducted with respect to that licence; and
(c) ends at the delivery point identified in the Production
Sharing Agreement. [s. 65L]
78.–(1) Subject to this section, in calculating a person’s income
from a separate petroleum rights for a year of income, there
shall be included, together with any other amounts required to
be included under other provisions of this Act, the following:
(a) incomings derived from the disposal of petroleum
obtained from the licence area valued at the delivery
point identified in the Production Sharing Agreement;
(b) amounts received in respect of the sale of data or
information pertaining to the operations or petroleum
reserves; and
Income from
petroleum rights
Acts Nos. 2 of 2016 s. 26
7 of 2017 s. 35

of data or
information pertaining to the operations or petroleum
reserves; and
Income from
petroleum rights
Acts Nos. 2 of 2016 s. 26
7 of 2017 s. 35

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634
(c) amounts required to be included under paragraph 5
of the Third Schedule including from the assignment
or other disposal of an interest in the petroleum right
with respect to which the operation is conducted after
commencement of production. (2) In the case of a contractor under a Production Sharing
Agreement, in calculating inclusions under subsection (l)(a),
include the contractor’s full share of petroleum from profit oil
or profit gas. [s.

ring
Agreement, in calculating inclusions under subsection (l)(a),
include the contractor’s full share of petroleum from profit oil
or profit gas. [s.

65M]
79.–(1) In calculating a person’s income from a separate
petroleum right for a year of income, there shall be deducted,
together with any other amounts deductible under other
provisions of this Act, the following:
(a) annual fees incurred by the person with respect to the
petroleum right under section 114 of the Petroleum
Act;
(b) depreciation allowances in respect of depreciable assets
other than the assets whose costs are recouped from
the cost oil or cost gas under a Production Sharing
Agreement granted with respect to the operations and
calculated in accordance with paragraph 6 of the Third
Schedule:
Provided that, assets owned and employed by a person
on international pipeline shall be treated as depreciable
assets of class 6 pool of depreciable assets; and
(c) amounts deposited in respect of the decommissioning
fund for the petroleum operation. (2) For purposes of subsection (1),
“international pipeline” means a cross border pipeline for
transportation of crude oil from a foreign country to a
port facility in the United Republic in which such crude
oil is exported to another foreign country.

ortation of crude oil from a foreign country to a
port facility in the United Republic in which such crude
oil is exported to another foreign country.

(3) There shall be no deduction allowed in calculating
income from a separate petroleum right-
Deductions for
petroleum rights
Acts Nos. 2 of 2016 s. 26
7 of 2017 s. 36
3 of 2021 s. 22
Cap. 392

calculating
income from a separate petroleum right-
Deductions for
petroleum rights
Acts Nos. 2 of 2016 s. 26
7 of 2017 s. 36
3 of 2021 s. 22
Cap. 392

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.635
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
(a) under section 15, 16, or 26;
(b) any expenditure and depreciation allowance in respect
of assets covered by cost petroleum under a Production
Sharing Agreement;
(c) for unrelieved loss under section 19, except as permitted
by section 80;
(d) any bonus payment; and
(e) expenses incurred by the person in implementing the
decommissioning plan for the operation in excess of
deposits in the decommissioning fund. [s.

(e) expenses incurred by the person in implementing the
decommissioning plan for the operation in excess of
deposits in the decommissioning fund. [s.

65N]
80.–(1) The provision of section 19 shall apply to unrelieved
losses of a person from a separate petroleum right with the
following modifications:
(a) losses from the separate petroleum right may be
deducted only in calculating future income from that
operation and not income from any other activity,
whether an upstream, midstream or downstream
petroleum activity or a non-petroleum activity;
(b) income from the separate petroleum right may not
be reduced by a loss from any other activity whether
an upstream, midstream or downstream petroleum
activity or a non-petroleum activity; and
(c) income from the separate petroleum right for any
year of income may be reduced by reason of the use of
unrelieved losses from that operation, subject to other
limitations imposed by section 19 but not below thirty
percent of that income before any reduction for losses. (2) The perpetual loss corporation rules shall not apply to a
person conducting exploration operations. [s. 65O]
81. Bonus payments made with respect to a petroleum right,
whether in form of a lump sum or otherwise, shall not be
deductible in calculating income from a separate petroleum right:
Losses from
petroleum rights
Act No.

n form of a lump sum or otherwise, shall not be
deductible in calculating income from a separate petroleum right:
Losses from
petroleum rights
Act No.

2 of 2016 s. 26
Bonus payments
Act No. 2 of 2016 s. 26

2 of 2016 s. 26
Bonus payments
Act No. 2 of 2016 s. 26

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636
Provided that, bonus payments shall neither be included in
the cost of the petroleum right nor depreciated over the term
of the right. [s. 65P]
82.–(1) A petroleum right shall be an asset separate from
any other interest in the land that constitutes the licence area
and separate from any other asset employed in petroleum
operations. (2) For purposes of farm-out arrangement, petroleum
rights shall be deemed as investment asset when realised
before commencement of production. (3) Where petroleum rights is realised in terms of subsection
(2), relevant provisions under this Act in respect of realisation
of investment or business asset shall apply. (4) Where a petroleum rights is realised together with other
assets used in petroleum operations or where a petroleum
rights is realised in part, the rules in section 47 shall apply for
purposes of apportionment expenditure, costs and amounts
derived from the realisation.

ts is realised in part, the rules in section 47 shall apply for
purposes of apportionment expenditure, costs and amounts
derived from the realisation.

(5) The incomings from the realisation of a petroleum
rights which include amounts derived by the holder of the
right from the realisation, shall include amounts to be derived
in the future from the realisation. (6) For purposes of section 38(b), an amount including any
form of payment or benefit to be derived in the future from
the realisation of an asset, shall be taken into account as an
incoming at its market value at the time of the realisation or in
any other case, in accordance with section 27(1)(d). (7) In calculating the market value of an obligation to pay a
future amount, there shall apply present value of a reasonable
estimate of the amount of the future payment. (8) An amount taken into consideration under subsections
(6) and (7) as incomings from the realisation of a petroleum
rights shall be included in the cost of the asset for the acquirer. Realisation of
petroleum rights
Act No. 2 of 2016 s. 26

realisation of a petroleum
rights shall be included in the cost of the asset for the acquirer. Realisation of
petroleum rights
Act No. 2 of 2016 s. 26

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THE INCOME TAX ACT [CAP. 332 R.E. 2023]
(9) The right to receive a future amount shall be realised in
a different amount to the extent that the provisions of sections
25 and 41 shall apply to make adjustments. (10) The provisions of this section shall apply to the
realisation of a petroleum rights where the incomings from the
realisation include an overriding royalty. [s. 65Q]
83.–(1) A decommissioning fund shall be exempt from tax. (2) Amounts paid from a decommissioning fund to meet
expenses of activities authorised by the decommissioning plan
for which the fund was established shall not be an income of
the petroleum rights holder which otherwise required to meet
those expenses. (3) Amounts in a decommissioning fund which are paid to
or come under the control of a petroleum rights holder and
which are not referred to in subsection (2) shall be included
in calculating income of the petroleum rights holder from the
associated petroleum rights. [s.

are not referred to in subsection (2) shall be included
in calculating income of the petroleum rights holder from the
associated petroleum rights. [s.

65R]
Subdivision B: Midstream and Downstream Activities
84.–(1) A licensee conducting midstream or downstream
activities with respect to petroleum shall be subject to income
tax with respect to the activities as prescribed by this Act, and
as modified by this Subdivision. (2) In calculating a licensee’s income from a business which
includes conducting midstream or downstream activities
with respect to petroleum, there shall be deducted amounts
deposited in and other expenses incurred in respect of the
decommissioning fund established for the licence. (3) There shall be no deduction allowed in calculating
income from a separate petroleum rights-
(a) under sections 15, 16, 17 or 26;
(b) for unrelieved losses under section 19, except as
permitted by section 80; or
Decommissioning
funds
Act No. 2 of 2016 s. 26
Midstream and
downstream
activities
Act No. 2 of 2016 s. 26

on 19, except as
permitted by section 80; or
Decommissioning
funds
Act No. 2 of 2016 s. 26
Midstream and
downstream
activities
Act No. 2 of 2016 s. 26

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638
(c) expenses incurred by the person in implementing the
decommissioning plan for the operation in excess of
the amount contributed in the decommissioning fund. (4) Unrelieved losses of a licensee arising from conducting
a business that includes midstream or downstream activities
may be deducted under section 19 so as to reduce total income
of the licensee but not below thirty percent of total income
before any deduction for such an unrelieved loss. (5) The provisions of section 83 applies to a decommissioning
fund established under section 197 of the Petroleum Act as
though a reference to “petroleum rights holder” were a reference
to the “holder of a midstream or downstream licence.”
(6) In this section, “licence” means a licence granted in respect
to midstream and downstream activities under the Petroleum Act. [s. 65S]
Division VI: Transportation3
85.[Repealed by The Finance Act, No. 7 of 2023 s.

o midstream and downstream activities under the Petroleum Act. [s. 65S]
Division VI: Transportation3
85.[Repealed by The Finance Act, No. 7 of 2023 s.

24]
PART VI
INTERNATIONAL
Division I: Residence and Source
86.–(1) An individual is resident in the United Republic for a
year of income if the individual-
(a) has a permanent home in the United Republic and is
present in the United Republic during any part of the
year of income;
(b) is present in the United Republic during the year of
income for a period or periods amounting in aggregate
to one hundred eighty three days or more;
(c) is present in the United Republic during the year
of income and in each of the two preceding years of
3 This Division is repealed by Act No. 7 of 2023
Cap. 392
Cap. 392
Repealed
Acts Nos. 5 of 2022 s. 63
7 of 2023 s. 24
Resident persons
Act No. 5 of 2022 s. 64

ivision is repealed by Act No. 7 of 2023
Cap. 392
Cap. 392
Repealed
Acts Nos. 5 of 2022 s. 63
7 of 2023 s. 24
Resident persons
Act No. 5 of 2022 s. 64

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.639
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
income for periods averaging more than one hundred
twenty two days in each such year of income; or
(d) is an employee or an official of the Government of
the United Republic posted abroad during the year of
income. (2) A partnership is a resident partnership for a year of
income if at any time during the year of income a partner is a
resident of the United Republic. (3) A trust is a resident trust for a year of income where-
(a) it was established in the United Republic;
(b) at any time during the year of income, a trustee of the
trust is a resident person; or
(c) at any time during the year of income a resident person
directs or may direct senior managerial decisions of the
trust, whether the direction is or may be made alone or
jointly with other persons or directly or through one or
more interposed entities.

ions of the
trust, whether the direction is or may be made alone or
jointly with other persons or directly or through one or
more interposed entities.

(4) A corporation is a resident corporation for a year of
income where-
(a) it is incorporated or formed under the laws of the
United Republic; or
(b) at any time during the year of income the management
and control of the affairs of the corporation are
exercised in the United Republic whether physically or
through any electronic means. [s. 66]
87.–(1) A person shall calculate his income or loss from any
employment, business or investment that has a source in the
United Republic separately from any income or loss from that
employment, business or investment that has a foreign source. (2) A person’s income from any employment, business or
investment has a source in the United Republic to the extent
to which -
(a) the amounts directly included in calculating that
income that have a source in the United Republic,
exceed the amount stipulated in paragraph (b); and
Source of income
and loss

ded in calculating that
income that have a source in the United Republic,
exceed the amount stipulated in paragraph (b); and
Source of income
and loss

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E. 2023]
640
(b) the amounts directly deducted in calculating that
income that have a source in the United Republic. (3) A person’s loss from any business or investment has
a source in the United Republic to the extent to which the
amounts referred to in subsection (2)(b) exceed those referred
to in subsection (2)(a). (4) A person’s foreign source of income or loss from an
employment, business or investment shall be calculated as-
(a) the person’s worldwide income or loss from that
employment, business or investment calculated
notwithstanding subsection (1); less
(b) any income with a source in the United Republic from
that employment, business or investment; or plus
(c) any loss with a source in the United Republic from that
employment, business or investment. [s.

m
that employment, business or investment; or plus
(c) any loss with a source in the United Republic from that
employment, business or investment. [s.

67]
88.–(1) Amounts directly included in calculating income have
a source in the United Republic where they consist of-
(a) incomings, gains and amounts referred to in section
8(2)(b), (c) or (d) or section 9(2)(b), to the extent to
which a domestic asset or domestic liability is involved;
and
(b) subject to paragraph (a), payments that have a source
in the United Republic. (2) Amounts directly deducted in calculating income have a
source in the United Republic where they consist of-
(a) allowances referred to in sections 13(1) or 17 and
expenditure referred to in section 14(1) to the extent to
which-
(i) subject to subparagraph (ii), they relate to
domestic assets; or
(ii) where the expenditure or allowances relate to
moveable tangible assets used by a person who
conducts a business of land, sea or air transport
operator or charterer to carry passengers, cargo,
Source of
directly included
and deducted
amounts

o
conducts a business of land, sea or air transport
operator or charterer to carry passengers, cargo,
Source of
directly included
and deducted
amounts

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.641
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
mail or other moveable tangible assets, the assets
are used to carry passengers who embark or cargo,
mail or other moveable tangible assets that are
embarked in the United Republic, other than as a
result of transhipment;
(b) losses from the realisation of business assets, investment
assets and liabilities of a business where the asset
or liability involved is a domestic asset or domestic
liability; and
(c) subject to paragraphs (a) and (b), payments that have a
source in the United Republic. [s. 68]
89.

is a domestic asset or domestic
liability; and
(c) subject to paragraphs (a) and (b), payments that have a
source in the United Republic. [s. 68]
89.

The following payments have a source in the United
Republic-
(a) dividends paid by a resident corporation;
(b) interest paid by a resident person or domestic
permanent establishment;
(c) natural resource payments made in respect of or
calculated by reference to natural resources taken from
land or the sea situated within the United Republic
or its territorial waters; including payment made for
harnessing, generating or utilising land, air or water
natural resources for generation of power or anything
of value whether the respective natural resource is
located alongside the border or within the country. (d) rent paid for the use of, right to use or forbearance from
using an asset situated in the United Republic;
(e) royalties paid for the use of, right to use or forbearance
from using an asset in the United Republic;
(f) premiums for general insurance or re-insurance
paid to, and proceeds from general insurance or re-
insurance paid by a resident person in respect of the
insurance or re-insurance of any risk in or outside the
United Republic;
Source of
payments
Acts Nos. 5 of 2011 s. 15
4 of 2017 s. 21
8 of 2020 s. 33
5 of 2022 s. 65
7 of 2023

of any risk in or outside the
United Republic;
Source of
payments
Acts Nos. 5 of 2011 s. 15
4 of 2017 s. 21
8 of 2020 s. 33
5 of 2022 s. 65
7 of 2023

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nt of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E.

2023]
642
(g) payments received by a person who conducts a business
of land, sea or air transport operator or charterer in
respect of -
(i) the carriage of passengers who embark or cargo,
mail or other moveable tangible assets that are
embarked in the United Republic, other than as a
result of transhipment; or
(ii) rental of containers and related equipment which
are supplementary or incidental to carriage
referred to in subparagraph (i);
(h) payments received by a person who conducts a business
of transmitting messages by cable, radio, optical fibre
or satellite or electronic communication in respect of
the transmission of messages by apparatus established
in or outside the United Republic, whether or not such
messages originate in or outside the United Republic;
(i) payments, including service fees, of a type not mentioned
in paragraphs (g) or (h) or attributable to employment
exercised, service rendered or a forbearance from
exercising employment or rendering service -
(i) irrespective of the place of exercise, rendering or
forbearance;
(ii) regardless of the place of payment; and
(iii) where the payer is the Government of the United
Republic, irrespective of the place of exercise,
rendering or forbearance:
Provided that, in the case of subparagraph (i) and (ii) the
services are consumed in the United Republic;
(j) proceeds of life insurance and retirement payments
not falling within paragraph (i) the “return” paid by a
resident person or a domestic permanent establishment
and any premium or retirement contribution paid to a
resident person or domestic permanent establishment
to secure such a return;
(k) gifts and other ex gratia payments to the extent received
in respect of business or investment conducted with
domestic assets; and

such a return;
(k) gifts and other ex gratia payments to the extent received
in respect of business or investment conducted with
domestic assets; and

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.643
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
(l) payments not mentioned in the above paragraphs
made in respect of-
(i) the acquisition of a domestic asset, incurring of a
domestic liability or realisation of such an asset or
liability; or
(ii) activity conducted or a forbearance from
conducting activity in the United Republic; and
(m) payments received by a non-resident in respect of an
electronic service consumed by or attributable to an
individual in the United Republic regardless of the
place of payment provided that, the consumption of
the service by an individual is not made in the course
of doing business. [s.

lic regardless of the
place of payment provided that, the consumption of
the service by an individual is not made in the course
of doing business. [s.

69]
90.–(1) Income accruing or arising in the United Republic,
whether directly or indirectly through or from-
(a) any business connection;
(b) any property;
(c) any asset or any source of income including the sources
of payment referred to in section 89; or
(d) transfer of an asset situated in the United Republic,
shall be deemed to accrue or arise in the United Republic
and shall be taxed through a representative assessee of a non-
resident person or a beneficial owner. (2) This section shall not preclude the Commissioner from
assessing the tax to a non-resident person or beneficial owner
under any provision of this Act. [s. 69A]
Division II: Permanent Establishments
91.–(1) The income tax liability under section 4(1)(a) of a
person with a domestic or foreign permanent establishment
shall be calculated as if the person and the permanent
establishment were independent but associated persons and
Income accruing
or arising in
United Republic
Act No. 8 of 2020 s. 34
Principles of
taxation

establishment were independent but associated persons and
Income accruing
or arising in
United Republic
Act No. 8 of 2020 s. 34
Principles of
taxation

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E. 2023]
644
the permanent establishment were resident in the country in
which it is situated. (2) In addition to taxation in accordance with subsection
(1), a person with a domestic permanent establishment shall be
taxed with respect to the repatriated income of the permanent
establishment in accordance with sections 4(1)(b) and 95. (3) Part VII of this Act shall apply as though a reference
to a “resident person” includes a reference to a domestic
permanent establishment of a non-resident person as though
the permanent establishment were a person separate from the
non-resident person. [s. 70]
92.–(1) Subsections (2) to (6) apply for the purposes of
calculating the income of a domestic or foreign permanent
establishment separately from that of its owner.

ctions (2) to (6) apply for the purposes of
calculating the income of a domestic or foreign permanent
establishment separately from that of its owner.

(2) Subject to Division II of Part III, the following amounts
derived and expenditure incurred shall be attributed to the
permanent establishment, namely -
(a) amounts derived and payments received in respect of
assets held by, liabilities owed by or the business of the
permanent establishment; and
(b) expenditure incurred and payments made for the
purposes of assets held by, liabilities owed by or the
business of the permanent establishment, but only to
the extent the expenditure is recorded in the accounts
of the permanent establishment. (3) The following assets and liabilities shall be treated as
assets or liabilities of the permanent establishment:
(a) tangible assets situated in the country of the permanent
establishment;
(b) intangible assets created by or through the permanent
establishment;
(c) intangible assets, to the extent that they may be
exploited in the market of the country of the permanent
establishment;
Calculating
income of
permanent
establishment

s, to the extent that they may be
exploited in the market of the country of the permanent
establishment;
Calculating
income of
permanent
establishment

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.645
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
(d) subject to subsection (6)(b), debt obligations incurred
in borrowing money, to the extent that the money is
employed in or used to acquire an asset that is employed
in the business of the permanent establishment; and
(e) other liabilities arising directly out of the business of
the permanent establishment. (4) In addition to the circumstances specified in sections
39 and 40, the permanent establishment shall be treated as
realising an asset held by it or liability owed by it-
(a) in the case of a tangible asset, when the asset is no longer
situated in the country of the permanent establishment;
(b) in the case of an intangible asset, to the extent the asset
is available for exploitation in the country in which the
owner is resident or a country in which the owner has
another permanent establishment; or
(c) in the case of a liability referred to in subsection (3)
(d), the money or asset is no longer employed in the
business of the permanent establishment.

in the case of a liability referred to in subsection (3)
(d), the money or asset is no longer employed in the
business of the permanent establishment.

(5) The following activities shall be treated as conducted by
the permanent establishment:
(a) employment by the owner of any individual who is
resident in the country of the permanent establishment;
(b) sales of trading stock by the owner of the same or a
similar kind as those sold through the permanent
establishment; and
(c) other business activities of the owner conducted with
residents of the country of the permanent establishment
of the same or a similar kind as those effected through
the permanent establishment. (6) Subject to Division II of Part III, the only arrangements
between a permanent establishment and the owner that are
recognised are the following:
(a) the transfer of an asset or liability between the
permanent establishment and the owner or vice versa,
in accordance with subsections (3) and (4); and

the transfer of an asset or liability between the
permanent establishment and the owner or vice versa,
in accordance with subsections (3) and (4); and

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E. 2023]
646
(b) where the owner carries on a banking business through the
permanent establishment, has received written approval
under this subsection from the Commissioner and subject
to such conditions as the Commissioner thinks fit, entries
shown in the same manner in the accounts of the owner
and the permanent establishment as-
(i) a debt obligation between the owner and the
permanent establishment or vice versa; and
(ii) interest derived or incurred with respect to a debt
obligation referred to in subparagraph (i),
but where this paragraph applies no debt obligation incurred by
the owner shall be attributed to the permanent establishment
under subsection (3)(d). (7) In this section, “the owner” means the owner of the
permanent establishment. [s. 71]
93.–(1) Subject to the provisions of subsection (2), the
repatriated income of a domestic permanent establishment of
a non-resident person for a year of income shall be calculated
according to the following formula -
A + B - C
Where-
A.

tic permanent establishment of
a non-resident person for a year of income shall be calculated
according to the following formula -
A + B - C
Where-
A.

is the net cost of assets of the permanent establishment
at the start of the year of income plus the market value
of capital contributed to the permanent establishment
by the owner during the year;
B. is net total income of the permanent establishment for
the year of income; and
C. is the net cost of assets of the permanent establishment
at the end of the year of income plus, where the
establishment has no total income for the year of
income, any unrelieved loss for the year of income
referred to in section 19(4). (2) The repatriated income shall not exceed-
(a) the net total income of the permanent establishment for
the year of income plus the balance of the permanent
Repatriated
income of
domestic
permanent
establishment

income of the permanent establishment for
the year of income plus the balance of the permanent
Repatriated
income of
domestic
permanent
establishment

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.647
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
establishment’s accumulated profits account referred
to in subsection (3) at the end of the previous year
of income after the adjustments referred to in that
subsection, less
(b) where the permanent establishment has no total
income for the year of income, any unrelieved loss for
the year of income referred to in section 19(4) for the
year of income. (3) For purposes of calculating repatriated income,
a domestic permanent establishment shall maintain an
accumulated profits account which, at the end of each year of
income, shall be-
(a) credited with the net total income of the permanent
establishment for the year of income; and
(b) debited with the repatriated income and, where the
permanent establishment has no total income, any
unrelieved loss referred to in section 19(4) for the year
of income.

epatriated income and, where the
permanent establishment has no total income, any
unrelieved loss referred to in section 19(4) for the year
of income.

(4) For purposes of this section-
“net cost of assets” of a domestic permanent establishment-
(a) at the start of a year of income equals the net cost of assets
at the end of the previous year of income, if any; and
(b) at the end of a year of income is calculated as-
(i) the written down value of the permanent
establishment’s pools of depreciable assets at the
end of the year of income plus the net cost of other
assets of the permanent establishment at the end
of the year of income; less
(ii) the net incomings for liabilities of the permanent
establishment at the end of the year of income;
“net incomings for a liability to a particular period” means
the amount by which cumulative incomings for the
liability exceed cumulative costs for the liability to the
time; and
“net total income” of a domestic permanent establishment
for a year of income is its total income for the year of

s for the liability to the
time; and
“net total income” of a domestic permanent establishment
for a year of income is its total income for the year of

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E. 2023]
648
income calculated without any deduction under section
19(1)(b) less income tax payable under section 4(1)(a)
with respect to that income. [s. 72]
Division III: Controlled Foreign Trusts and Corporations
94.–(1) Controlled foreign trusts and corporations and their
members shall be taxed in accordance with Subdivisions B and
C of Part IV as modified by this Division. (2) A controlled foreign trust or corporation shall be treated
as distributing its unallocated income to its members at the
end of each year of income in accordance with section 96. [s.

orporation shall be treated
as distributing its unallocated income to its members at the
end of each year of income in accordance with section 96. [s.

73]
95.–(1) The unallocated income of a controlled foreign trust or
corporation for a year of income shall be -
(a) the attributable income of the trust or corporation for
the year of income; less
(b) any distributions made by the trust or corporation
during the year of income determined otherwise than
in section 96(1) that are included in calculating the
income of a member under sections 52(2)(b) or 54(1)
(b), respectively and in the case of distributions by a
resident financial institution and for purpose of section
96(6), amount of distributions which are treated as not-
distributable as determined by the Bank of Tanzania. (2) The “attributable income” of a controlled foreign trust
or corporation for a year of income shall be its total income
for the year of income calculated as if the trust or corporation
were resident. [s. 74]
96.–(1) Where at the end of a year of income a trust or
corporation is a controlled foreign trust or corporation, the
trust or corporation shall be treated as distributing to its
members at that time its unallocated income for the year of
Principles of
taxation
Unallocated
income of
controlled
foreign trust and
corporation
Act No. 5 of 2022 s.

time its unallocated income for the year of
Principles of
taxation
Unallocated
income of
controlled
foreign trust and
corporation
Act No. 5 of 2022 s.

66
Taxation of
members of
controlled
foreign trusts or
corporations

66
Taxation of
members of
controlled
foreign trusts or
corporations

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.649
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
income referred to in section 95(1) according to each member’s
share. (2) A member who is treated as receiving a distribution
under subsection (1) may deduct the amount treated as
distributed in calculating the member’s income of a future year
of income to the extent to which -
(a) the amount has not previously been deducted under
this subsection; and
(b) distributions of the type referred to in section 95(1)
(b) received by the member during the year of income
exceed the member’s share of the trust or corporation’s
attributable income for the year of income referred to
in section 95(2).

ng the year of income
exceed the member’s share of the trust or corporation’s
attributable income for the year of income referred to
in section 95(2).

(3) To the extent that all dividends distributed by a controlled
foreign corporation during a year of income, including as
a result of subsection (1), do not exceed the corporation’s
attributable income for the year of income referred to in
section 95(2), then dividends distributed to shareholders who
are corporations and associated with the corporation at the
time of distribution are treated as -
(a) having the same character as to type and source as the
corporation’s attributable income; and
(b) made proportionately out of each type and source of
the corporation’s attributable income. (4) At the time an amount is treated as distributed by a
controlled foreign corporation to an associated shareholder
under subsection (3), the shareholder shall be allocated any
income tax under this Act or foreign income tax paid or treated
as paid by the corporation with respect to the amount. (5) A shareholder is treated as having paid the tax allocated
to the shareholder by subsection (4) at the time of allocation
and foreign tax relief may be available to the shareholder
under section 98 but no other tax credit shall be available to
the shareholder.

allocation
and foreign tax relief may be available to the shareholder
under section 98 but no other tax credit shall be available to
the shareholder.

(6) Subsections (3), (4) and (5) shall apply to distributions
by a resident corporation made during any year of income

(6) Subsections (3), (4) and (5) shall apply to distributions
by a resident corporation made during any year of income

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E. 2023]
650
to a non-resident associate of the corporation as though the
corporation were a controlled foreign corporation and the
attributable income of the corporation were its total income
for the year of income. (7) For purposes of this section, a “member’s share” with
respect to income of trust or corporation shall be-
(a) equal to the member’s percentage right to share in the
income on distribution; or
(b) where that right is not reasonably certain, such
percentage as the Commissioner thinks appropriate in
the circumstances. [s. 75]
97.–(1) An amount treated as distributed to a member under
section 96(1) shall be included in the cost of the member’s
membership interest in the non-resident trust or corporation
at the time of distribution. (2) An amount deducted by a member under section
96(2) shall be included in the incomings for the member’s
membership interest in the non-resident trust or corporation
at the time of deduction. [s.

n
96(2) shall be included in the incomings for the member’s
membership interest in the non-resident trust or corporation
at the time of deduction. [s.

76]
Division IV: Foreign Tax Relief
98.–(1) Subject to subsection (4), a resident person other
than a partnership may claim a foreign tax credit for a year of
income for any foreign income tax paid by the person to the
extent to which it is paid with respect to the person’s taxable
foreign income for the year of income. (2) Foreign tax credits claimed under subsection (1) are
calculated separately for each year of income and shall not
exceed the average rate of Tanzania income tax of the person
for the year of income applied to the person’s taxable foreign
income. (3) For purposes of subsections (1) and (2), there shall be
treated as foreign income tax paid by a resident person with
Cost and
incomings of
member’s interest
in controlled
foreign trust or
corporation
Foreign tax relief

oreign income tax paid by a resident person with
Cost and
incomings of
member’s interest
in controlled
foreign trust or
corporation
Foreign tax relief

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.651
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
respect to the person’s taxable foreign income for a year of
income any unrelieved foreign income tax of a previous year
of income paid by the person. (4) A person may elect to relinquish a foreign tax credit
available for a year of income and claim a deduction for the
amount of the foreign income tax but otherwise no deduction
is available for foreign income tax.

le for a year of income and claim a deduction for the
amount of the foreign income tax but otherwise no deduction
is available for foreign income tax.

(5) For purposes of this section -
“average rate of Tanzania income tax” of a resident person
for a year of income means the percentage that income
tax payable by the person under section 5(1)(a) calculated
under section 4(3) without a reduction for any foreign
tax relief) shall be of the total income of the person for
the year of income;
“taxable foreign income” of a resident person for a year
of income means foreign source income that shall be
included in the person’s chargeable income from any
employment, business or investment for the year of
income; and
“unrelieved foreign income tax” of a resident person means
foreign income tax paid by the person with respect to the
person’s taxable foreign income -
(a) for which a foreign tax credit has not been granted
under subsection (1) as a result of the limitation in
subsection (2); and
(b) that has not been relinquished under subsection (4). [s. 77]
99.

granted
under subsection (1) as a result of the limitation in
subsection (2); and
(b) that has not been relinquished under subsection (4). [s. 77]
99.

A resident person, other than a partnership, who carries
out business or investment in both Mainland Tanzania and
Tanzania Zanzibar, may claim a tax credit for year of income
for any income tax paid by the person in relation to the person’s
taxable income from business or investment carried out in
Mainland Tanzania or Tanzania Zanzibar. [s. 77A]
Tax credit for
business or
investment
operating in
both Mainland
Tanzania
and Tanzania
Zanzibar
Act No. 5 of 2022 s. 67

or Tanzania Zanzibar. [s. 77A]
Tax credit for
business or
investment
operating in
both Mainland
Tanzania
and Tanzania
Zanzibar
Act No. 5 of 2022 s. 67

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E. 2023]
652
PART VII
TAX PAYMENT PROCEDURE
Division I: General Obligations
100.–(1) Tax payable under this Act means-
(a) income tax imposed under section 4(1), including
amounts payable by a withholding agent or withholdee
under Division II, by an instalment payer under
Division III and on assessment under Division IV of
this Part;
(b) interest and penalties imposed by assessment under
Division I of Part VIII;
(c) an amount required to be paid to the Commissioner in
collection from a tax debtor under sub-Part (b) of Part
IX of the Tax Administration Act; and
(d) an amount required to be paid to the Commissioner
in respect of a tax liability of a third party under sub-
Part (c) of Part IX of the Tax Administration Act. (2) Tax shall be paid to the Commissioner in the form and
at the place as may be prescribed. [s. 78]
101.

c) of Part IX of the Tax Administration Act. (2) Tax shall be paid to the Commissioner in the form and
at the place as may be prescribed. [s. 78]
101.

Subject to section 66 of the Tax Administration Act, tax
shall be payable-
(a) in the case of income tax payable by withholding, at the
time provided for in section 109;
(b) in the case of income tax payable by instalment, on
the date by which the instalment is to be paid under
sections 113 or 115; and
(c) in the case of income tax payable on an assessment
under section 120, on the date by which the return of
income must be filed. [s. 79]
102–103. [Repealed by Act No.10 of 2015 s.120.]
[ss. 80-80A]
Types of tax
and methods of
payment
Cap. 438
Cap. 438
Time for payment
of tax
Act No. 10 of 2015 s. 119
Cap. 438
Repealed

of 2015 s.120.]
[ss. 80-80A]
Types of tax
and methods of
payment
Cap. 438
Cap. 438
Time for payment
of tax
Act No. 10 of 2015 s. 119
Cap. 438
Repealed

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.653
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
Division II: Income Tax Payable by Withholding
Subdivision A: Withholding Obligations
104.–(1) A resident employer who makes a payment that is
to be included in calculating the chargeable income of an
employee from the employment shall withhold income tax
from the payment at the rate provided for in paragraphs 1 and
4(a) of the First Schedule. (2) The obligation of an employer to withhold income tax
under subsection (1) shall not be reduced or extinguished
because the employer has a right or is under an obligation to
deduct and withhold any other amount from the payment or
because of any other law that provides that an employee’s income
from employment shall not be reduced or subject to attachment. [s.

rom the payment or
because of any other law that provides that an employee’s income
from employment shall not be reduced or subject to attachment. [s.

81]
105.–(1) Where a resident person-
(a) pays a dividend, interest, natural resource payment,
rent or royalty; and
(b) the payment has a source in the United Republic and is
not subject to withholding under section 104,
the person shall withhold income tax from the payment at the
rate provided for in paragraph 4(b) of the First Schedule. (2) This section shall not apply to-
(a) payment made by individuals unless made in
conducting a business;
(b) interest paid to a resident financial institution;
(c) payments that are exempt amounts;
(d) rent paid to a resident person for the use of an asset
other than aircraft, land or buildings;
(e) interest payable to a non-resident bank by a strategic
investor except for interest payable on any loan taken by a
strategic investor from an associated or related company; or
(f) interest paid to holder of corporate or municipal bonds
issued and listed at the Dar es Salaam Stock Exchange
with effect from 1st July 2022. [s. 82]
Withholding by
employers
Act No. 2 of 2014 s. 38
Withholding
from investment
returns
Acts Nos. 15 of 2004 s. 32
8 of 2012 s. 28
2 of 2016 s. 27
5 of 2022 s. 68
7 of 2023 s. 26

Act No. 2 of 2014 s. 38
Withholding
from investment
returns
Acts Nos. 15 of 2004 s. 32
8 of 2012 s. 28
2 of 2016 s. 27
5 of 2022 s. 68
7 of 2023 s. 26

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E. 2023]
654
106.–(1) Subject to subsection (2), a resident person who-
(a) is conducting business of extractive industry in mining,
oil or gas pays a service fee to another resident person in
respect of management or technical services provided
wholly and exclusively for the business;
(b) pays to a non-resident an insurance premium with a
source in the United Republic;
(c) pays to-
(i) a non-resident a service fee with a source in
United Republic; or
(ii) a resident person a service fee for provision of
professional services; or
(d) pays-
(i) money transfer commission to a money transfer
agent;
(ii) fee, commission or any other charge to a
commercial bank agent; or
(iii) fee, commission or any other charge to a digital
payment agent. (e) is a buyer of precious metals, gemstones and other
precious stones supplied by the holder of a primary
mining licence or artisanal miner;
(f) makes payment to a resident person in respect of
verified carborn emission reduction.”.

the holder of a primary
mining licence or artisanal miner;
(f) makes payment to a resident person in respect of
verified carborn emission reduction.”.

(2) This section shall not apply to-
(a) payments made by individuals unless made in
conducting a business; or
(b) payments that are exempt amounts. (3) For the purposes of subsection (1),
“digital payment agent” means a person who renders digital
payment services at a fee, commission or any other
charges. (4) For purposes of subsection (1)(c)(ii), “professional
service” means services rendered by a person licensed as
a practitioner by any recognised professional body and
shall include other services or activities of an independent
Withholding
from service fees
and contract
payments
Acts Nos. 4 of 2013 s. 23
2 of 2014 s. 39
2 of 2016 s. 28
8 of 2020 s. 35
7 of 2023 s. 27

ependent
Withholding
from service fees
and contract
payments
Acts Nos. 4 of 2013 s. 23
2 of 2014 s. 39
2 of 2016 s. 28
8 of 2020 s. 35
7 of 2023 s. 27

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.655
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
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:
Provided that, where the service referred in subsection
(1)(c)(ii) involves construction works, the payment which is
subject to withholding shall be based on the ratio of 3:2 for
materials and services respectively. [s. 83]
107.–(1) Subject to subsection (2), a resident corporation
which makes a payment in respect of goods supplied by a
resident person in the course of conducting business shall
withhold income tax at the rate provided for under paragraph
4(c) of the First Schedule. (2) This section shall apply to a resident corporation whose
budget is wholly or substantially financed by Government
budget subvention. [s. 83A]
108.

(2) This section shall apply to a resident corporation whose
budget is wholly or substantially financed by Government
budget subvention. [s. 83A]
108.

[Repealed by Act No. 10 of 2021 s. 4]
[s. 83B]
Subdivision B: Procedure Applicable to Withholding
109.–(1) A withholding agent shall pay to the Commissioner
within seven days after the end of each calendar month
any income tax that has been withheld in accordance with
Subdivision A during the month. (2) A withholding agent shall file with the Commissioner,
within seven days of the month following the month to which
the tax relates, a withholding tax statement for the calendar
month in the manner and form prescribed, specifying-
(a) payments made by the agent during the period that are
subject to withholding under Subdivision A;
Withholding of
income tax for
goods
Acts Nos. 13 of 2008 s. 15
15 of 2010 s. 16
4 of 2013 s. 24
Repealed
Statements and
payments of
tax withheld
or treated as
withheld
Act No. 3 of 2021 s. 24

Nos. 13 of 2008 s. 15
15 of 2010 s. 16
4 of 2013 s. 24
Repealed
Statements and
payments of
tax withheld
or treated as
withheld
Act No. 3 of 2021 s. 24

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E. 2023]
656
(b) the name and address of the withholdee;
(c) Taxpayer Identification Number of the withholdee;
(d) income tax withheld from each payment; and
(e) any other information that the Commissioner may
prescribe. (3) A withholding agent who fails to withhold income tax in
accordance with Subdivision A must nevertheless pay the tax
that should have been withheld in the same manner and at the
same time as tax that is withheld. (4) Where a withholding agent fails to withhold income tax
from a payment as required by Subdivision A-
(a) the withholdee shall jointly and severally, be liable with
the withholding agent for the payment of the tax to the
Commissioner; and
(b) the tax shall be payable by the withholdee within seven
days after the end of the calendar month in which the
payment is received.

mmissioner; and
(b) the tax shall be payable by the withholdee within seven
days after the end of the calendar month in which the
payment is received.

(5) A withholding agent who withholds income tax under
Subdivision A and pays the tax to the Commissioner shall be
treated as having paid the amount withheld to the withholdee
for the purposes of any claim by the withholdee for payment
of the amount withheld. (6) A withholding agent who fails to withhold income tax
under Subdivision A but pays the tax that should have been
withheld to the Commissioner in accordance with subsection (3)
shall be entitled to recover an equal amount from the withholdee. [s. 84]
110.–(1) A withholding agent shall prepare and serve on a
withholdee-
(a) separately for each period referred to in subsections (2)
and (3);
(b) at the time referred to in those subsections; and
(c) in the form prescribed,
a withholding certificate setting out the amount of payments
made to the withholdee and income tax withheld from those
payments under Subdivision A by the agent during the period. Withholding
certificates

yments
made to the withholdee and income tax withheld from those
payments under Subdivision A by the agent during the period. Withholding
certificates

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.657
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
(2) Subject to subsection (3), a withholding certificate shall
cover a calendar month and shall be served within thirty days
after the end of the month. (3) In the case of income tax withheld under section 104, a
withholding certificate-
(a) shall cover the part of the calendar year during which
the employee shall be employed; and
(b) shall be served by 30th January after the end of the year
or, where the employee has ceased employment with the
withholding agent during the year, no more than thirty
days from the date on which the employment ceased. [s.

employee has ceased employment with the
withholding agent during the year, no more than thirty
days from the date on which the employment ceased. [s.

85]
111.–(1) For purposes of this Act, the following are final
withholding payments-
(a) dividends paid by-
(i) a resident corporation; or
(ii) non-resident corporation to a resident individual,
other than a dividend received by-
(aa) an individual in conducting a business; or
(bb) an individual referred to in section 6(2);
(b) interest paid by financial institution to a resident
individual where the interest is paid with respect to a
deposit held with the institution, other than-
(i) interest received by the individual in conducting a
business; or
(ii) foreign source interest paid to an individual
referred to in section 6(2);
(c) rent paid to a resident individual under a lease of land or a
building and associated fittings and fixtures, other than -
(i) rent received by an individual in conducting a
business; or
(ii) foreign source rent paid to an individual referred
to in section 6(2);
(d) service fees paid to a resident person that are subject to
withholding under section 106(1)(a) and (d);
Final withholding
payments
Acts Nos. 6 of 2006 s. 15
4 of 2013 s. 25
4 of 2017 s. 23
5 of 2022 s. 69
7 of 2023 s. 28

under section 106(1)(a) and (d);
Final withholding
payments
Acts Nos. 6 of 2006 s. 15
4 of 2013 s. 25
4 of 2017 s. 23
5 of 2022 s. 69
7 of 2023 s. 28

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E. 2023]
658
(e) payments made to non-resident persons other than
through a domestic permanent establishment of
the person that are subject to withholding under
Subdivision A or would be so subject if section 106(1)
(a) is not applied; and
(f) interest paid to a unit trust. (g) payment for purchase of minerals made to a primary
licence holder or artisanal miner;
(h) payment made to resident person in respect of verified
carborn emission reduction
(2) Income tax-
(a) withheld from a final withholding payment under
Subdivision A of Division II of this Part; or
(b) paid with respect to a final withholding payment in
accordance with section 109(3) or (4), satisfies the
withholdee’s income tax liability under section 4(1)(c)
with respect to the payment.

g payment in
accordance with section 109(3) or (4), satisfies the
withholdee’s income tax liability under section 4(1)(c)
with respect to the payment.

(3) Subject to the provisions of subsection (4), where a
final withholding payment is not subject to withholding tax
whether by reason of section 106(2)(a) or that the payer is
non-resident-
(a) the recipients income tax liability under section 4(1)
(c) with respect to the payment shall be payable by way
of assessment under Division IV of this Part as though
that liability were a liability under section 4(1)(a); and
(b) where the payment is a foreign source payment, a
foreign tax credit shall be available under section 98 for
any foreign income tax imposed on the payment and
the credit shall be calculated as though the payment
were taxable foreign income. (4) Where-
(a) a resident individual the “landlord” receives rent
during a year of income in respect of residential
premises situated in the United Republic that are leased
by another individual as the residence of that other
individual;

me in respect of residential
premises situated in the United Republic that are leased
by another individual as the residence of that other
individual;

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.659
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
(b) the rent is not received by the landlord in conducting a
business; and
(c) the total of the rent received by the landlord under the
lease and any other lease meeting the requirements of
paragraphs (a) and (b) during the year of income does
not exceed five hundred thousand shillings,
then the landlord shall not have tax liability under section
4(1)(c) with respect to receipt of the rent. [s. 86]
112. The withholdee of a payment that is not a final withholding
payment shall be treated as having paid any income tax-
(a) withheld from the payment under Subdivision A of
Division II of this Part; or
(b) paid with respect to the payment in accordance with
section 109(3) or (4);
and the withholdee is entitled to a tax credit in an amount
equal to the tax treated as paid for the year of income in which
the payment is derived. [s.

d the withholdee is entitled to a tax credit in an amount
equal to the tax treated as paid for the year of income in which
the payment is derived. [s.

87]
Division III: Income Tax Payable by Instalment
113.–(1) A person an “instalment payer” who derives or expects
to derive any chargeable income during a year of income-
(a) from a business or investment; or
(b) from an employment where the employer is not
required to withhold tax under section 104 from
payments received by the person that are included in
calculating the person’s income from the employment,
shall pay income tax for the year of income by quarterly
instalments as provided for by this section. (2) An instalment payer shall pay instalments of income
tax-
(a) in the case of a person whose year of income is a twelve
month period beginning at the start of a calendar
month, on or before the last day of the third, sixth,
ninth and twelfth months of the year of income; or
Credit for non-
final withholding
tax
Payment of
income tax
by quarterly
instalment
Act No. 4 of 2017 s. 24

d twelfth months of the year of income; or
Credit for non-
final withholding
tax
Payment of
income tax
by quarterly
instalment
Act No. 4 of 2017 s. 24

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E. 2023]
660
(b) in any other case, at the end of each three month period
commencing at the beginning of the year of income
and a final instalment on the last day of the year of
income unless it coincides with the end of one of the
three month periods.

of the year of income
and a final instalment on the last day of the year of
income unless it coincides with the end of one of the
three month periods.

(3) Subject to subsection (4), the amount of each instalment
of income tax payable by an instalment payer for a year of
income is calculated according to the following formula:
[A – C]
--------------------
B
Where-
A is the estimated tax payable by the instalment payer for
the year of income at the time of the instalment under
section 114;
B is the number of instalments remaining for the year of
income including the current instalment; and
C is the sum of any-
(a) income tax paid during the year of income, but
prior to the due date for payment of the instalment,
by the person by previous instalment under this
section or section 115;
(b) income tax withheld under Subdivision A of
Division II during the year of income, but prior to
the due date for payment of the instalment, from
payments received by the person that are included
in calculating the person’s income for the year of
income; and
(c) income tax paid in accordance with section
106(3) or (4) with respect to a payment of the kind
referred to in paragraph (b) that shall be paid to
the Commissioner by the withholding agent or the
withholdee during the year of income but prior to
the due date for payment of the instalment.

paid to
the Commissioner by the withholding agent or the
withholdee during the year of income but prior to
the due date for payment of the instalment.

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.661
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
(4) Where an instalment shall be payable at a time when an
instalment payer’s estimated tax payable for a year of income is
fifty thousand shillings or less or the amount of an instalment
calculated under subsection (3) is twelve thousand five hundred
shillings or less, the amount of the instalment shall be nil. (5) Where an instalment payer is a resident person who
conducts agricultural business involving seasonal crops in
the United Republic during a year of income and conducts no
other business instalments for the year of income shall be nil. (6) An instalment payer shall be entitled to a tax credit for
a year of income in an amount equal to the income tax paid by
way of instalment for the year of income under this section. [s.

led to a tax credit for
a year of income in an amount equal to the income tax paid by
way of instalment for the year of income under this section. [s.

88]
114.–(1) Subject to the provisions of subsection (7) and
section 48 of the Tax Administration Act, every person who
is an instalment payer for a year of income under section 113
shall file with the Commissioner-
(a) in the case of a resident person to whom section
113(5) applies, by the end of September, of the year of
income; and
(b) in any other case, by the date for payment of the first
tax instalment an estimate of tax payable for the year of
income. (2) An estimate of tax payable of a person for a year of
income shall, subject to any instructions by the Commissioner
to the contrary-
(a) be in the manner and form prescribed estimating-
(i) the person’s chargeable income for the year of
income from each employment, business and
investment and the source of that income;
(ii) the person’s total income for the year of income
and the income tax to become payable with
respect to that income under section 4(1)(a);
(iii) in the case of a domestic permanent establishment
of a non-resident person, the permanent
establishment’s repatriated income for the year
Statement of
estimated tax
payable
Act No. 10 of 2015 s. 121
Cap.438

on-resident person, the permanent
establishment’s repatriated income for the year
Statement of
estimated tax
payable
Act No. 10 of 2015 s. 121
Cap.438

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E. 2023]
662
of income and the income tax to become payable
with respect to that income under section 4(1)(b);
and
(iv) any other information that the Commissioner
may prescribe. (b) be signed by the person and includes a declaration that,
to the best of that person’s knowledge and belief, the
estimate is full and true; and
(c) have attached to it any other information that the
Commissioner may prescribe. (3) Subject to the provisions of subsections (6) and (9), the
sum of the income tax referred to in subsection (2)(a)(ii) and
(iii) shall be the person’s estimated tax payable for the year of
income. (4) In estimating income tax payable for a year of income
under subsection (2)(a)(ii) and, in particular, calculating any
foreign tax relief to be claimed under section 98, a person may
take account of foreign income tax only if the person has paid
such tax or the person reasonably estimates that such tax shall
be paid during the year of income.

t of foreign income tax only if the person has paid
such tax or the person reasonably estimates that such tax shall
be paid during the year of income.

(5) An instalment payer’s estimate under subsections (1)
and (2) shall remain in force for the whole of the year of income
unless the person files with the Commissioner a revised
estimate, in the form and specifying the information referred
to in subsection (2), together with a statement of reasons for
the revision. (6) Subject to subsection (8), a revised estimate filed by
a person under subsection (5) is the person’s estimated tax
payable for the year of income, but only for the purposes of
calculating instalments payable under section 88 for the year
of income after the date the revised estimate is filed with the
Commissioner. (7) The Commissioner may-
(a) specify by notice in writing that an instalment payer or
class of instalment payers are not required to submit an
estimate under subsection (1); or

a) specify by notice in writing that an instalment payer or
class of instalment payers are not required to submit an
estimate under subsection (1); or

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.663
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
(b) extend the time for filing such an estimate in accordance
with section 48 of the Tax Administration Act. (8) Where an instalment payer fails to file an estimate for a
year of income as required by subsection (1), or an instalment
payer shall not be required to submit an estimate by reason of
subsection (7), the Commissioner shall-
(a) make an estimate of the person’s estimated tax payable
for the year of income, which may take into account the
income tax payable under section 4(1)(a) and (b) for
the previous year of income; and
(b) serve on the instalment payer a written notice stating
the Commissioner’s estimate, and the manner in which
it is calculated. (9) Where the Commissioner serves an instalment payer
with a notice under subsection (8), then for the purposes of
section 113 the estimated tax payable by the person for the year
of income shall be the amount estimated by the Commissioner. [s.

for the purposes of
section 113 the estimated tax payable by the person for the year
of income shall be the amount estimated by the Commissioner. [s.

89]
115.–(1) Where a person an “instalment payer” derives a gain
in conducting an investment from the realisation of an interest
in land, petroleum or mineral rights or buildings situated in
the United Republic licence or concessional right on reserved
land shares or securities held in resident entity that the person
shall pay income tax by way of single instalment equal to-
(a) in the case of a resident person, ten percent of the gain;
(b) in the case of a resident person who realises an interest
in land or building and does not have records of costs
of assets, three percent of the incomings or approved
value of the asset, whichever is greater;
(c) in the case of realisation of mineral rights under section
73, thirty percent and petroleum right under section
82, thirty percent; or
(d) in the case of a non-resident person, twenty percent of
the gain. Cap. 438
Single instalment
at time of
realisation or
receipt
Acts Nos. 5 of 2011 s. 16
8 of 2012 s. 29
2 of 2016 s. 29
4 of 2017 s. 25
8 of 2020 s. 36
7 of 2023 s. 29

instalment
at time of
realisation or
receipt
Acts Nos. 5 of 2011 s. 16
8 of 2012 s. 29
2 of 2016 s. 29
4 of 2017 s. 25
8 of 2020 s. 36
7 of 2023 s. 29

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E. 2023]
664
(2) A person referred to under subsection (1) shall, within
fourteen days from the date of realisation of the interest, report
to the Commissioner. (3) The instalment referred to in subsection (1) shall be
paid within thirty days or such other period determined by
the Commissioner from the date of realisation of an interest. (4) The appropriate authorities for registration, transfer
or approval shall not register transfer of the interest or
change of name without the production of a certificate by the
Commissioner certifying that the instalment has been paid or
that no instalment is payable.

nge of name without the production of a certificate by the
Commissioner certifying that the instalment has been paid or
that no instalment is payable.

(5) This subsection applies where -
(a) a non-resident person, an “instalment payer”, receives
a payment in conducting a business of land, sea or air
transport operator or charterer;
(b) no part of that business is conducted through a
permanent establishment of the person situated in the
United Republic; and
(c) the payment is received in respect of-
(i) the carriage of passengers who embark or cargo,
mail or other moveable tangible assets that are
embarked in the United Republic, other than as a
result of transhipment; or
(ii) rental of containers and related equipment which
are supplementary or incidental to carriage
referred to in paragraph (a). (6) Subsection (5) shall not apply to payment received in
respect of carriage of fish or horticulture products by a foreign
aircraft. (7) Where subsection (5) applies the person shall pay
income tax by way of single instalment equal to five percent of
the gross payment. (8) A tax certificate issued by the Commissioner showing
that the instalment referred to in subsection (6) has been paid
is necessary before the vehicle, ship or aircraft in respect of
which the payment shall be received shall be permitted to clear

tion (6) has been paid
is necessary before the vehicle, ship or aircraft in respect of
which the payment shall be received shall be permitted to clear

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.665
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
customs and leave the United Republic and the proper officer
of Customs by whom customs clearance may be granted shall
refuse clearance until such a certificate is produced. (9) Civil or criminal proceedings shall not be instituted or
maintained against the proper officer of Customs or any other
authority in respect of a refusal of clearance under this section,
nor shall the fact that a vehicle, ship or aircraft is detained
under this section affect the liability of the owner, charterer or
agent to pay border, harbour or airport dues and charges for
the period of detention. (10) An instalment payer shall be entitled to a tax credit for
a year of income in an amount equal to the income tax paid
by way of single instalment for the year of income under this
section.

to a tax credit for
a year of income in an amount equal to the income tax paid
by way of single instalment for the year of income under this
section.

(11) For purposes of this section, “date of realisation of an
interest” means-
(a) the date of execution of contract for sale;
(b) the date of parting with possession, use or control of a
realised asset; or
(c) the date of payment of part or whole of the consideration
for the realised asset,
whichever comes earlier. [s. 90]
116.–(1) Where a non-resident person receives a payment that
has a source in the United Republic from an individual, other
than a payment made in the course of conducting business, in
respect of an electronic service, such person shall pay income
tax for payments received in a calendar month by way of single
instalment equal to two percent of the gross payment. (2) A person referred to under subsection (1) shall be liable
to pay income tax by filing a return to the Commissioner on or
before the twentieth day of the month following the month to
which the payment relates. (3) The Minister may, by regulations, prescribe procedures
for assessing and collecting income tax or giving effect to the
provisions of this section. Tax payment on
income realised
through digital
market place
Acts Nos. 5 of 2022 s. 70
7 of 2023 s. 30

giving effect to the
provisions of this section. Tax payment on
income realised
through digital
market place
Acts Nos. 5 of 2022 s. 70
7 of 2023 s. 30

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666
(4) For purposes of this section, “gross payment” means a
total amount of payment, excluding value added tax, derived
by a non-resident person from an individual, other than a
payment made in the course of conducting a business, in
respect of electronic services. [s. 90A]
Division IV: Income Tax Payable on Assessment
Subdivision A: Returns
117.–(1) Subject to sections 118 and 120 of this Act and 48 and
59 of the Tax Administration Act, 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.

very 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.

(2) A return of income of a person for a year of income
shall, subject to any instructions by the Commissioner to the
contrary-
(a) be in the manner and form prescribed specifying-
(i) the person’s chargeable income for the year of
income from each employment, business and
investment and the source of that income;
(ii) the person’s total income for the year of income
and the income tax payable with respect to that
income under section 4(1)(a);
(iii) in the case of a domestic permanent establishment
of a non-resident person, the permanent
establishment’s repatriated income for the year of
income and the income tax payable with respect
to that income under section 4(1)(b);
(iv) any income tax paid by the person for the year of
income by withholding, instalment or assessment for
which a tax credit is available under sections 87, 113,
115 of this Act or 58 of the Tax Administration Act;
(v) the amount of income tax still to be paid for the
year of income calculated as the sum of the tax
referred to in subparagraphs (ii) and (iii) less the
Returns of
income
Acts Nos. 10 of 2015 s. 122
2 of 2016 s. 30
4 of 2017 s. 26
Cap. 438
Cap. 438

x
referred to in subparagraphs (ii) and (iii) less the
Returns of
income
Acts Nos. 10 of 2015 s. 122
2 of 2016 s. 30
4 of 2017 s. 26
Cap. 438
Cap. 438

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.667
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
tax already paid referred to in subparagraph (iv);
and
(vi) any other information that the Commissioner
may prescribe;
(b) in the case of a corporation, be prepared or certified by
a certified public accountant in public practice;
(c) include a declaration that the return is complete and
accurate;
(d) be signed by -
(i) the person; and
(ii) a person specified in section 45(2)(a) of the Tax
Administration Act; and
(e) have attached to it-
(i) any withholding certificates supplied to the person
under section 110 with respect to payments
derived by the person during the year of income;
(ii) any statement provided to the person under
section 47(2) of the Tax Administration Act;
(iii) certified financial statements; and
(iv) any other information that the Commissioner
may prescribe. [s. 91]
118.

of the Tax Administration Act;
(iii) certified financial statements; and
(iv) any other information that the Commissioner
may prescribe. [s. 91]
118.

Unless requested by the Commissioner by notice in
writing served on the person and subject to a right of the
person to elect to file a return, no return of income for a year
of income shall be required under section 117 from-
(a) a resident individual-
(i) who has no income tax payable for the year of
income under section 4(1)(a); or
(ii) whose income for the year of income consists
exclusively of either or both of the following:
(aa) income from any employment where the
employer is required to withhold tax under
section 104 from payments made to the
Cap. 438
Cap. 438
Return of income
not required
Act. No. 5 of 2022 s. 71

loyer is required to withhold tax under
section 104 from payments made to the
Cap. 438
Cap. 438
Return of income
not required
Act. No. 5 of 2022 s. 71

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668
individual that are included in calculating the
individual’s income from the employment; or
(bb) gains of the type referred to in section 115(1);
or
(b) a non-resident person other than one with a domestic
permanent establishment who has no income tax
payable for the year of income under section 4(1)(a) or
whose income tax payable for the year of income under
section 4(1)(a) consists exclusively of gains of the type
referred to in section 115(i) or 116. [s. 92]
119. [Repealed by Act No.10 of 2015 s.124.]
[s. 93]
Subdivision B: Assessments
120.–(1) Where an entity files a return of income for a year of
income, an assessment shall be treated as made on the due date
for filing the return of-
(a) the income tax payable by the person for the year of
income under section 4(1)(a) and (b) in the amount
shown in the return; and
(b) the amount of that tax still to be paid for the year of
income in the amount shown in the return the “tax
payable on the assessment”.

return; and
(b) the amount of that tax still to be paid for the year of
income in the amount shown in the return the “tax
payable on the assessment”.

(2) Where an entity fails or is not required to file a return of
income for a year of income then, until such time as a return
shall be filed, an assessment shall be treated as made on the
due date for filing the return that -
(a) the income tax payable by the person for the year of
income shall be equal to the sum of any income tax
withheld from payments derived by the person during
the year of income under Division II and any income
tax paid by the person by instalment for the year of
income under Division III of this Part; and
(b) there is no tax payable on the assessment. Repealed
Self-assessment
Acts Nos. 6 of 2006 s. 16
10 of 2015 s. 123

der Division III of this Part; and
(b) there is no tax payable on the assessment. Repealed
Self-assessment
Acts Nos. 6 of 2006 s. 16
10 of 2015 s. 123

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.669
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
(3) Where an individual files a return of income, the
Commissioner shall assess the tax as expeditiously as possible
after the expiry of the time allowed for the filing of a return of
income. (4) Where an individual has filed a return of income, the
Commissioner may-
(a) accept such return and make assessment on the basis of
the return; or
(b) where the Commissioner has reasonable cause to
believe that such return is not true and correct,
determine, according to the best of his judgement, the
amount of the income of that individual and assess the
tax accordingly. (5) Where an individual has not filed a return for any
year of income, whether or not he has been required by the
Commissioner so to do, and the Commissioner considers that,
that individual has income chargeable tax for such year, the
Commissioner may determine, according to the best of his
judgement, the amount of the income of that individual and
assess the tax accordingly.

r, the
Commissioner may determine, according to the best of his
judgement, the amount of the income of that individual and
assess the tax accordingly.

(6) Subject to the provisions of subsections (1) and (2), the
Commissioner may make an assessment under subsections
(3), (4) or (5), at any time prior to the expiry of three years
following the year of income to which the assessment relates:
Provided that -
(a) where any fraud or wilful neglect has been committed
by or on behalf of any person in connection with or in
relation to any tax for any year of income, an assessment
in relation to such year of income may be made at any
time; and
(b) in the case of payment referred to in subsections (4) and
(5) of section 7, an assessment in relation thereto may
be made at any time prior to the expiry of three years
following the year of income in which the payment is
received.

sessment in relation thereto may
be made at any time prior to the expiry of three years
following the year of income in which the payment is
received.

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670
(7) Subsection (5) shall not affect any liability otherwise
incurred by that individual under this Act in consequence of
the failure to file a return. [s. 94]
121-153. [Repealed by Act No. 10 of 2015 s.124]
[ss. 95-127]
PART X
ADMINISTRATION
Official Documentation and Registration
154.–(1) To the extent that the terms of an international
agreement to which the United Republic is a party are
inconsistent with the provisions of this Act, apart from
subsection (5) and Subdivision B of Division II of Part III, the
terms of the agreement prevail over the provisions of this Act. (2) This subsection applies where the Commissioner
receives a request pursuant to an international agreement from
the competent authority of another country for the collection
in the United Republic of an amount payable by a person
otherwise referred to as the “tax debtor” under the tax laws of
the other country.

collection
in the United Republic of an amount payable by a person
otherwise referred to as the “tax debtor” under the tax laws of
the other country.

(3) Where subsection (2) applies, the Commissioner may,
by service of a notice in writing, require the tax debtor to pay
the amount to the Commissioner by the date specified in the
notice and for transmission to the competent authority. (4) This subsection applies where an international agreement
provides that the United Republic shall exempt income or a
payment or subject income or a payment to reduced tax. (5) Where subsection (4) applies, the exemption or
reduction shall not be available to any entity that meets the
following conditions:
(a) the entity is, for the purposes of the agreement, a
resident of the other contracting State; and
(b) fifty percent or more of the underlying ownership
of the entity is held by persons, being individuals
Repealed
International
agreements

State; and
(b) fifty percent or more of the underlying ownership
of the entity is held by persons, being individuals
Repealed
International
agreements

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.671
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
or entities in which no individual holds part of the
underlying ownership, that are not, for the purposes of
the agreement, residents of the other contracting State
or the United Republic. (6) For purposes of this section, “international agreement”
means a treaty or other agreement with a foreign government
that has entered into force in the United Republic providing
for -
(a) relief of international double taxation and the
prevention of fiscal evasion; or
(b) reciprocal administrative assistance in the enforcement
of tax liabilities. [s. 128]
155. The Minister may make regulations for the better carrying
into effect of the principles, purposes and provisions of this
Act. [s. 129]
156-166. [Repealed by Act No. 10 of 2019 s.124.]
[ss. 130-140]
PART XI
TRANSITIONAL PROVISIONS
167.–(1) [Repeals the Income Tax Act No.

Act. [s. 129]
156-166. [Repealed by Act No. 10 of 2019 s.124.]
[ss. 130-140]
PART XI
TRANSITIONAL PROVISIONS
167.–(1) [Repeals the Income Tax Act No.

33 of 1973.]
(2) The applicable regulations, rules, orders or notices
made under the Repealed Income Tax Act, and in force shall
continue to be in force, so far as may be, as if they have been
made as regulations, rules, orders or notices under this Act
until such time as they are amended or revoked by regulations,
rules, orders or notices made under this Act. [s. 141]
168.–(1) Subject to subsections (6) and (8), the repealed
legislation continues to apply for years of income commencing
prior to the date on which this Act comes into effect. Regulations
Act No. 4 of 2018 s. 27
Repealed
Repeal
Transition
Act No. 15 of 2004 s. 33

mencing
prior to the date on which this Act comes into effect. Regulations
Act No. 4 of 2018 s. 27
Repealed
Repeal
Transition
Act No. 15 of 2004 s. 33

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E. 2023]
672
(2) All appointments made under the repealed legislation
and subsisting at the date this Act comes into effect shall be
deemed to be appointments made under this Act. (3) An international agreement made by the Government
of the United Republic that is effective at the time this Act
comes into effect shall continue to have effect under this Act. (4) All blank forms and other documents used in relation to
the repealed legislation may continue to be used under this Act
and all references in those forms and documents to provisions of
and expressions appropriate to the repealed legislation are taken to
refer to the corresponding provisions and expressions of this Act.

provisions of
and expressions appropriate to the repealed legislation are taken to
refer to the corresponding provisions and expressions of this Act.

(5) A reference in this Act to -
(a) a previous year of income includes, where the context
requires, a reference to a year of income under the
repealed legislation; or
(b) this Act or to a provision of this Act includes, where the
context requires, a reference to the repealed legislation
or to a corresponding provision of the repealed
legislation, respectively. (6) Subject to section 20(4), (6), (7) and (8), a person whose
year of income under the repealed legislation is, at the time
the repealed legislation ceases to have effect, a period of twelve
months other than the calendar year shall be treated as having
been granted approval by the Commissioner under section
20(3) to use that year of income under this Act. (7) Interest derived by a person from long-term bonds of
not less than three years maturity period issued and listed on
the Dar es Salaam Stock Exchange in the fiscal year 2002/2003
shall be exempted under this Act. (8) The provisions of sections 7(2) and 9(2) and Division II
of Part V shall apply for the year of income commencing on or
after 1st January, 2005. [s.

8) The provisions of sections 7(2) and 9(2) and Division II
of Part V shall apply for the year of income commencing on or
after 1st January, 2005. [s.

142]
169.–(1) Subject to subsection (2), where the Government of
the United Republic has concluded a binding agreement with
a person whether before or after the commencement of this
Agreements and
certificates for
fiscal stability

blic has concluded a binding agreement with
a person whether before or after the commencement of this
Agreements and
certificates for
fiscal stability

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.673
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
Act such that certain provisions of the repealed legislation or
provisions of this Act that are later repealed will continue to
apply or not be altered to the detriment of the person-
(a) the provisions of the repealed legislation shall continue
to apply-
(i) to the extent provided for in the agreement, for
the duration of the agreement; or
(ii) until such time as the person relinquishes the
right to apply those provisions; and
(b) in calculating the tax liability of the person during the
application period referred to in paragraph (a), the
Commissioner may, in the Commissioner’s discretion-
(i) continue to apply other provisions of the repealed
legislation that the Commissioner considers are
associated with or that have an application that
is consequential upon the provisions mentioned
in paragraph (a) instead of applying the
corresponding provisions under this Act; and
(ii) disapply any provisions in this Act that have
no corresponding provision in the repealed
legislation.

orresponding provisions under this Act; and
(ii) disapply any provisions in this Act that have
no corresponding provision in the repealed
legislation.

(2) An agreement referred to in subsection (1) has no
effect on the application of this Act until such time as it shall
be incorporated in a register to be kept by the Minister and
known as the Register of Tax Agreements. (3) A person seeking the benefit of an agreement referred to
in subsection (1) shall apply to the Minister for inclusion of the
agreement in the Register of Tax Agreements. (4) For purposes of this section, an agreement concluded by
the Government of the United Republic includes a certificate
issued by the Tanzanian Investment Centre under the Tanzania
Investment Act. [s. 143]
170.–(1) Subject to the provisions of subsection (2), the
following provisions shall apply in calculating the cost of assets
owned and net incomings of liabilities owed-
Cap. 38
Assets and
liabilities

2), the
following provisions shall apply in calculating the cost of assets
owned and net incomings of liabilities owed-
Cap. 38
Assets and
liabilities

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E.

nt of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E.

2023]
674
(a) the net cost of a depreciable asset or class of depreciable
assets for which capital allowances were available under
the repealed legislation is, at the commencement, the
residue of expenditure or written down value for the
asset or assets, as the case requires, under the repealed
legislation at the time the repealed legislation ceased to
have effect;
(b) the net cost of a depreciable asset for which capital
allowances were not available under the repealed
legislation is, at the commencement, the market value
of the asset at that time;
(c) the net cost of a business asset or investment asset
that is an interest in any premises or a financial asset
within the meaning of section 13 of the Income Tax
Act, is, at the commencement, the lower of the asset’s
cost determined under section 13 of the Income Tax
Act, and adjusted for inflation and devaluation to the
date of commencement of this Act only and the market
value of the asset at that time of commencement;
(d) the net cost of a business asset or investment asset,
other than an asset referred to in paragraph (c), is, at
the commencement, the market value of the asset at
that time of commencement; and
(e) the net incomings of a liability of a business is, at
the commencement, the market value of the liability
expressed in a positive amount at that time.

the net incomings of a liability of a business is, at
the commencement, the market value of the liability
expressed in a positive amount at that time.

(2) The net cost of an asset for which a deduction or
immediate expensing was available under the repealed
legislation is, at the commencement, nil. [s. 144]
171. [Repealed by Act No. 2 of 2016 s. 31.]
[s. 145][]
Act No. 33 of 1973
Act No. 33 of 1973
Repealed

gislation is, at the commencement, nil. [s. 144]
171. [Repealed by Act No. 2 of 2016 s. 31.]
[s. 145][]
Act No. 33 of 1973
Act No. 33 of 1973
Repealed

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.675
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
FIRST SCHEDULE
(Made under section 4(6))
TAX RATES
1.–(1) Subject to subparagraphs (2), (3) and (4) of this paragraph and
paragraph 2, the total income of a resident individual for a year of
income shall be taxed at the following rates:
TOTAL INCOME RATE PAYABLE
1. Where the total income does not
exceed 3,240,000 NIL
2. Where the total income exceeds
3,240,000/= but does not exceed
Tshs.6,240,000/=
8% of the amount in excess of Tshs. 3,240,000/=
3. Where the total income exceeds
6,240,000/= but does not exceed
9,120,000/=
Tshs.240,000/= plus 20% of the
amount in excess of 6,240,000/=
4. Where the total income exceeds
9,120,000/= but does not exceed
12,000,000/=
Tshs. 816,000/= plus 25% of the
amount in excess of 9,120,000/=
5. Where the total income exceeds
12,000,000/=
Tshs.1,536,000/= plus 30% of the
amount in excess of 12,000,000/=
(2) Subparagraph (3) shall apply where -
(a) the total income of a resident individual for a year of income
exceeds Tshs.

nt in excess of 12,000,000/=
(2) Subparagraph (3) shall apply where -
(a) the total income of a resident individual for a year of income
exceeds Tshs.

3,240,000/=; and
(b) any of the following (the “gains”) are included in calculating
the individual’s income-
(i) net gains from the realisation of investment assets but
not exceeding the amount calculated as:
A – B
Where-
A is any gain from the realisation of shares and securities in the
United Republic; and
B is losses on the realisation of assets referred to in A used in
calculating the net gains; and
(ii) a commuted pension from an approved retirement fund. (3) Where this subparagraph applies-
(a) the greater of-
(i) the individual’s total income less the gains; or
(ii) Tshs. 3,240,000/=,
shall be taxed at the rates specified in subparagraph (1) as though it
were the only total income of the individual; and
Rates of income
tax for individuals
Acts Nos. 15 of 2004 s. 34
13 of 2005 s. 10
6 of 2006 s. 19
16 of 2007 s. 16
13 of 2008 s. 18
15 of 2010 s. 21
8 of 2012 s. 31
15 of 2015 s. 15
2 of 2016 s. 32
4 of 2018 s. 28
8 of 2020 s. 37
3 of 2021 s. 25
5 of 2022 s. 72
7 of 2023 s. 31

. 18
15 of 2010 s. 21
8 of 2012 s. 31
15 of 2015 s. 15
2 of 2016 s. 32
4 of 2018 s. 28
8 of 2020 s. 37
3 of 2021 s. 25
5 of 2022 s. 72
7 of 2023 s. 31

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E. 2023]
676
(b) the balance of the total income shall be taxed at the rate of
ten percent. (4) The total income of a non-resident individual for a year of
income shall be taxed at the rate of thirty percent. (5) The total income of a person from conducting mining operations
shall be taxed at the rate of thirty percent. (6) The total income of a person from conducting petroleum
operations shall be taxed at the rate of thirty percent. (7) The Minister may, in consultation with the Minister responsible
for finance of the Revolutionary Government of Zanzibar, determine
the rate applicable in Tanzania Zanzibar.

onsultation with the Minister responsible
for finance of the Revolutionary Government of Zanzibar, determine
the rate applicable in Tanzania Zanzibar.

2.–(1) Where a resident individual meets the following requirements
for a year of income the individual’s income tax payable with respect to
section 4(1)(a) for the year of income shall be equal to the amount of
presumptive income tax provided in subparagraph (3)-
(a) the individual’s income for a year of income consists
exclusively of income from a business not including
income independent professions and providers of technical,
management, construction and training services having a
source in the United Republic;
(b) the turnover of the business does not exceed the threshold in
subparagraph (2); and
(c) the individual does not elect to disapply this provision for
the year of income. (2) The threshold referred to in subparagraph (1)(b) is 100,000,000
shillings. (3) The amount of presumptive income tax referred to in
subparagraph (1) is-
Presumptive
income tax for
individuals
Acts Nos. 15 of 2004 s. 34
8 of 2012 s. 31
2 of 2014 s. 40
15 of 2015 s. 15
8 of 2019 s. 9
5 of 2022 s. 72
TURNOVER
TAX PAYABLE WHERE
SECTION 43 OF TAX
ADMINISTRATION ACT IS
NOT COMPLIED WITH
TAX PAYABLE WHERE
SECTION 43 OF TAX
ADMINISTRATION ACT IS
COMPLIED WITH
Where turnover does not
exceed Tshs.

X
ADMINISTRATION ACT IS
NOT COMPLIED WITH
TAX PAYABLE WHERE
SECTION 43 OF TAX
ADMINISTRATION ACT IS
COMPLIED WITH
Where turnover does not
exceed Tshs.

4,000,000/= NIL NIL
Where turnover exceeds Tshs. 4,000,000/= but does not
exceed Tshs. 7,000,000/=
Tshs. 100,000/= 3% of turnover in excess of
Tshs. 4,000,000/=
Where turnover exceeds Tshs. 7,000,000/= but does not
exceed Tshs. 11,000,000/=
Tshs. 250,000/=
Tshs. 90,000/= plus 3% of
turnover in excess of Tshs. 7,000,000/=
Turnover of Tshs. 11,000,001/=
but does not exceed Tshs. 100,000,000/=
3.5% of turnover

s. 90,000/= plus 3% of
turnover in excess of Tshs. 7,000,000/=
Turnover of Tshs. 11,000,001/=
but does not exceed Tshs. 100,000,000/=
3.5% of turnover

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.677
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
(4) The Minister may, in consultation with the Minister responsible
for finance of the Revolutionary Government of Zanzibar, determine
the presumptive rate applicable in Tanzania Zanzibar.

with the Minister responsible
for finance of the Revolutionary Government of Zanzibar, determine
the presumptive rate applicable in Tanzania Zanzibar.

(5) The rates of income tax referred to in section 85 shall be as
follows:
Category of Vehicles Tax Payable
Category A : Goods Vehicle
Load Vehicle between 0 - 1 Tonne 180,000
Load Vehicle between 1 - 5 Tonnes 450,000
Load Vehicle between 6 - 10 Tonnes 720,000
Load Vehicle between 11 - 15 Tonnes 1,710,000
Load Vehicle between 16 - 20 Tonnes 2,430,000
Load Vehicle between 21 - 25 Tonnes 2,610,000
Load Vehicle above 25 Tonnes 2,790,000
Category B : Passenger Vehicle
Bus and other similar vehicle with seating capacity below 10
passengers
180,000
Bus with seating capacity above 10 but below 16 passengers 450,000
Bus with seating capacity from 16 up to 30 passengers 720,000
Bus with seating capacity up to 32 passengers 1,710,000
Ordinary bus 2,430,000
Semi-luxury bus 2,610,000
Luxury bus 2,790,000
3.–(1) The total income of a corporation, trust, unapproved retirement
fund or domestic permanent establishment of a non-resident person
for a year of income shall be taxed at the rate of thirty percent.

proved retirement
fund or domestic permanent establishment of a non-resident person
for a year of income shall be taxed at the rate of thirty percent.

(2) Notwithstanding subparagraph (1)-
(a) a newly listed company with the Dar es Salaam Stock
Exchange with at least thirty percent of its equity ownership
issued to the public shall be taxed at a reduced corporate rate
of twenty five percent for three consecutive years from the
date of listing;
(b) a corporation with a newly established plant for assembling
motor vehicles, tractors, fishing boats or out boats engine
and having a performance agreement with the Government
shall be taxed at a reduced corporate rate of ten percent for
five consecutive years from the year of commencement of
production;
Rates of income
tax for entities
Acts Nos. 6 of 2006 s. 19
13 of 2008 s. 18
4 of 2009 s. 14
8 of 2012 s. 31
4of 2013 s. 27
4 of 2017 s. 27
4 of 2018 s. 28
8 of 2019 s. 9

for entities
Acts Nos. 6 of 2006 s. 19
13 of 2008 s. 18
4 of 2009 s. 14
8 of 2012 s. 31
4of 2013 s. 27
4 of 2017 s. 27
4 of 2018 s. 28
8 of 2019 s. 9

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678
(c) a newly established entity dealing in manufacture of
pharmaceuticals or leather products and having a
performance agreement with the Government of the
United Republic shall be taxed at a reduced corporate tare
of twenty percent for five consecutive years from the year of
commencement of production; and
(d) an entity dealing in manufacture of sanitary pads and having
a performance agreement with the Government of the
United Republic shall be taxed at a reduced corporate rate of
twenty five percent for two consecutive years from the 1st July
2019 to 30th June 2021. (3) Income of a corporation with perpetual unrelieved loss for three
consecutive years shall be taxed at the rate of 0.5 percent of the turnover
of the third year of perpetual unrelieved loss. (4) The repatriated income of a domestic permanent establishment
of a non-resident person for a year of income shall be taxed at the rate
of ten percent. 4.

e repatriated income of a domestic permanent establishment
of a non-resident person for a year of income shall be taxed at the rate
of ten percent. 4.

Income tax to be withheld from payments under Division II of Part
VII shall be withheld at the following rates:
(a) payments to which section 104 applies -
(i) in the case of a resident withholdee - at the rates
prescribed in regulations;
(ii) in the case of a non-resident withholdee - fifteen percent;
and
(iii) in the case of director’s fees referred to in section 7(2)
(h) - fifteen percent;
(b) payments to which section 105 applies -
(i) in the case of dividends -
(aa) of a corporation listed on the Dar es Salaam Stock
Exchange or to which subsection (2) of section 54
applies– five percent; or
(bb) of any other corporation – ten percent;
(ii) in the case of interest, rent or a commuted pension paid
to a resident withholdee or interest or rent paid to a non-
resident withholdee – ten percent;
(iii) in the case of royalty referred to in paragraph (c) of the
definition of the term “royalty” –ten percent; or
(iv) in the case of other payments - fifteen percent; and
(c) payments to which section 106 applies -
(i) in the case of service fee referred to in section 106(1)
(a), - five percent for a resident and fifteen percent for a
non-resident;
Rates of
withholding tax
Acts Nos.

ervice fee referred to in section 106(1)
(a), - five percent for a resident and fifteen percent for a
non-resident;
Rates of
withholding tax
Acts Nos.

8 of 2012 s. 31
4 of 2013 s. 27
2 of 2014 s. 40
4 of 2017 s. 27
5 of 2022 s. 72

8 of 2012 s. 31
4 of 2013 s. 27
2 of 2014 s. 40
4 of 2017 s. 27
5 of 2022 s. 72

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.679
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
(ii) in the case of insurance premium referred to in section
106(1)(b), - five percent;
(iii) in the case of service fee referred to in section 106(1)
(c), - five percent for a resident and fifteen percent for a
non-resident;
(iv) in the case of money transfer commission referred to in
section 106(1)(d),- ten percent; and
(v) in the case of payment referred to under section 107, -
two percent. 5.–(1) Where an order relating to tax rates is in force under the
Provisional Collection of Taxes and Duties Act, with respect to any year
of income, the rates of tax referred to in this Schedule shall, so long as
the order remains in force, be construed in accordance with the order.

year
of income, the rates of tax referred to in this Schedule shall, so long as
the order remains in force, be construed in accordance with the order.

(2) Subject to subparagraph (1), where the rates of tax specified
under paragraph 1, 2, 3 or 4 are changed for a year of income without
specifying the precise date from which the change takes effect then -
(a) in the case of tax rates under paragraphs 1, 2 and 3, the
change shall be treated as having effect from the start of the
calendar year specified or if no year is specified from the start
of the calendar year after the Act changing the rate receives
Presidential assent; and
(b) in the case of tax rates under paragraph 4, the change shall
be treated as having effect from the start of the calendar
year specified or if no year is specified from the date the Act
changing the rate receives Presidential assent.

effect from the start of the calendar
year specified or if no year is specified from the date the Act
changing the rate receives Presidential assent.

(3) Where a tax rate specified under paragraphs 1, 2 or 3 changes
and the change takes effect on a date other than the start of a person’s
year of income then for the year of income in which the change takes
place -
(a) the person’s total income shall be apportioned between the
part of the year of income occurring before the change and
the remaining part according the number of days in each
part;
(b) the total income attributable to the part of the year of
income occurring before the change shall be taxed at the
rate applicable before the change and that attributable to the
remaining part shall be taxed at the rate applicable after the
change; and
(c) in the case of a resident individual, the thresholds referred
to in paragraph 1(1), both before and after change, shall
be reduced in proportion to the part of the year of income
occurring before the change and the remaining part. Change of rate
Cap. 153

r change, shall
be reduced in proportion to the part of the year of income
occurring before the change and the remaining part. Change of rate
Cap. 153

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nt of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E.

2023]
680
SECOND SCHEDULE
EXEMPT AMOUNTS
(Made under section 10)
1.– (1) The following amounts are exempt from income tax:
(a) amounts derived by the President of the United Republic or
the President of the Revolutionary Government of Zanzibar
from salary, duty allowance and entertainment allowance
paid or payable to the President from public funds in respect
of or by virtue of the office as President;
(b) amounts derived by the Government including Executive
Agency established under the Executive Agencies Act or any
local authority of the United Republic or by the Revolutionary
Government of Zanzibar or any local authority of Zanzibar
except amounts derived from business activities that are
unrelated to the functions of Government;
(c) amounts derived by any person entitled to privileges under
the Diplomatic and Consular Immunities and Privileges Act
to the extent provided in that Act or in regulations made
under that Act;
(d) amounts derived by an individual from employment in
the public service of the Government of a foreign country
provided -
(i) the individual is a resident person solely by reason of
performing the employment or is a non-resident person;
and
(ii) the amounts are payable from the public funds of the
country;
(e) foreign source amounts delivered by -
(i) an individual who is not a citizen of the United Republic
and who is referred to in paragraph (d); or
(ii) a spouse or child of an individual referred to in
subparagraph (i) where the spouse is resident in the
United Republic solely by reason of accompanying the
individual on the employment;
(f) amounts derived by -
(i) the East African Development Bank;
(ii) the Price Stabilisation and Agricultural Inputs Trust;
(iii) the Investor Compensation Fund under the Capital
Markets Regulatory Authority;
(iv) the Bank of Tanzania;
(v) Dar es Salaam Stock Exchange; and
(vi) African Development Bank from the sale of bonds and
securities in the capital market;
Acts Nos.

f Tanzania;
(v) Dar es Salaam Stock Exchange; and
(vi) African Development Bank from the sale of bonds and
securities in the capital market;
Acts Nos.

6 of 2006 s. 20
13 of 2008 s. 19
5 of 2011 s. 17
8 of 2012 s. 32
2 of 2014 s. 41
16 of 2015 s. 16
2 of 2016 s. 33
4 of 2018 s. 29
8 of 2019 s. 9
8 of 2020 s. 38
3 of 2021 s. 26
5 of 2022 s. 73
Exempt amounts
Cap. 245
Cap. 356

s. 41
16 of 2015 s. 16
2 of 2016 s. 33
4 of 2018 s. 29
8 of 2019 s. 9
8 of 2020 s. 38
3 of 2021 s. 26
5 of 2022 s. 73
Exempt amounts
Cap. 245
Cap. 356

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THE INCOME TAX ACT [CAP. 332 R.E.

f Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.681
THE INCOME TAX ACT [CAP. 332 R.E.

2023]
(g) amounts derived during a year of income by a primary co-
operative society -
(i) registered under the Co-operative Societies Act;
(ii) solely engaged in activities as a primary co-operative in
one of the following fields:
(aa) agricultural activities, including activities related to
marketing and distribution;
(bb) construction of houses for members of the
cooperative;
(cc) distribution trade for the benefit of the members of
the cooperative; and
(dd) savings and credit society; and
(iii) whose turnover for the year of income does not exceed
one hundred million shillings;
(h) pensions or gratuities granted in respect of wounds or
disabilities caused in war and suffered by the recipients of
such pensions or gratuities;
(i) a scholarship or education grant payable in respect of tuition
or fees for full-time instruction at an educational institution;
(j) amounts derived by way of alimony, maintenance or child
support under a judicial order or written agreement;
(k) amounts derived by way of gift, bequest or inheritance,
except as required to be included in calculating income
under sections 7(2), 8(2) or 9(2);
(l) [deleted]
(m) amounts derived by way of foreign living allowance by any
officer of the Government that are paid from public funds
and in respect of performance of the office overseas;
(n) income derived from gaming by a gaming licensee who has
paid gaming tax under Gaming Act;
(o) income derived from investment or business conducted
within the Export Processing Zone, and Special Economic
Zone during initial period of ten years:
Provided that, this paragraph shall not apply to category B investor
in the Special Economic Zone as provided in the Special Economic
Zones Act;
(p) income derived from investments exempted under any
written laws for the time being in force in Tanzania Zanzibar;
(q) amounts derived by a crop fund established by farmers under
a registered farmers cooperative society, union or association
for financing crop procurement from its members;
(r) [deleted]
(s) the fidelity fund established under the Capital Markets and
Securities Act;
Cap.

on
for financing crop procurement from its members;
(r) [deleted]
(s) the fidelity fund established under the Capital Markets and
Securities Act;
Cap.

211
Cap.41
Cap. 420
Cap. 79

211
Cap.41
Cap. 420
Cap. 79

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E. 2023]
682
(t) interest on bonds issued by the East African Development
Bank which are listed in the Dar es Salaam Stock Exchange;
(u) amounts derived from gains on realisation of asset by a unit
holder on redemption of a unit by a unit trust;
(v) interest, fees or other financing charges paid by the
Government to a non-resident bank, financial institution,
other government or representative of other government
arising from a loan agreement that entitles such non-
resident entity to a tax exemption for purposes of financing
Government projects;
(w) amounts paid to persons entitled to benefits granted pursuant
to the provisions of Part V of the Political Service Retirement
Benefits Act
(x) interest derived by a person from government bonds of not
less than three years issued and listed on the Dar es Salaam
Stock Exchange from 1st July, 2021.

rest derived by a person from government bonds of not
less than three years issued and listed on the Dar es Salaam
Stock Exchange from 1st July, 2021.

(y) amount derived from gain on realisation or transfer of
mineral rights and mineral information to a partnership
entity formed between the Government and an investor;
(z) amount derived from gain on realisation or transfer of
free carried interest shares from a partnership entity to the
Government;
(aa) amount derived from gain on realisation or transfer
of shares to the Government through the Treasury
Registrar. (2) The provisions of item (v) of subparagraph (1) shall be deemed
to have come into operation on the 1st June, 2017. (3) The provisions of item (w) shall be deemed to have come into
operation on the 1st day of July, 2016. THIRD SCHEDULE
DEPRECIABLE ASSETS, ALLOWANCES AND INCLUSIONS
(Made under section 17)
1.–(1) Depreciable assets are classified as follows:
CLASS DEPRECIABLE ASSETS
1. Computers and data handling equipment together with
peripheral devices; automobiles, buses and minibuses with a
seating capacity of less than thirty passengers, goods vehicles
with a load capacity of less than seven tonnes; construction
and earth-moving equipment. Cap. 225
Acts Nos. 15 of 2004 s. 35
8 of 2012 s. 33
4 of 2013 s. 28
2 of 2016 s. 34
4 of 2017 s.

even tonnes; construction
and earth-moving equipment. Cap. 225
Acts Nos. 15 of 2004 s. 35
8 of 2012 s. 33
4 of 2013 s. 28
2 of 2016 s. 34
4 of 2017 s.

28
Classification
and pooling of
depreciable assets

28
Classification
and pooling of
depreciable assets

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.683
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
CLASS DEPRECIABLE ASSETS
2. Buses with a seating capacity of thirty or more passengers,
heavy general purpose or specialised trucks, trailers and
trailer-mounted containers; railroad cars, locomotives,
and equipment; vessels, barges, tugs, and similar water
transportation equipment; aircraft; other self-propelling
vehicles; plant and machinery used in agriculture or
manufacturing; specialised public utility plant, equipment, and
machinery irrigation installations and equipment. 3. Office furniture, fixtures and equipment; any asset not
included in another Class. 4. [Deleted.]
5. Buildings, structures and similar works of a permanent nature
used in agriculture, livestock farming or fishing farming. 6. Buildings, structures and similar works of permanent nature
other than those mentioned in Class 5. 7. Intangible assets. 8.

ing or fishing farming. 6. Buildings, structures and similar works of permanent nature
other than those mentioned in Class 5. 7. Intangible assets. 8.

Plant and machinery including windmills, electric generators
and distribution equipment used in agriculture and electronic
fiscal device purchased by a non value added tax registered
trader, equipment used for prospecting and exploration of
minerals or petroleum.

lectronic
fiscal device purchased by a non value added tax registered
trader, equipment used for prospecting and exploration of
minerals or petroleum.

(2) Each depreciable asset owned and employed by a person during a
year of income wholly and exclusively in the production of the person’s
income from a particular business shall be, at the time the asset is first
owned and so employed, placed in a pool -
(a) in the case of a Class 1, 2, 3, 5 or 8 depreciable asset other
than one referred to in paragraph (c), with all other assets of
the same Class so owned and employed by the person in that
business;
(b) in the case of a Class 7 depreciable asset, of its own separately
from other assets of that Class or any other Class; and
(c) in the case of a moveable tangible asset used by a person who
conducts a business of land, sea or air transport operator
or charterer to carry passengers, mail, livestock or other
moveable tangible assets between different countries, of its
own separately from other assets of any Class,
and those pools are referred to as the person’s pools of depreciable
assets for the year of income.

its
own separately from other assets of any Class,
and those pools are referred to as the person’s pools of depreciable
assets for the year of income.

(3) To the extent not otherwise provided, expenditure incurred by a
person wholly and exclusively in the production of the person’s income
from a business in respect of natural resource prospecting, exploration
and development shall be treated as if it were incurred in securing the
acquisition of an asset that is used by the person in that production.

oration
and development shall be treated as if it were incurred in securing the
acquisition of an asset that is used by the person in that production.

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684
2.–(1) Subject to this paragraph, an allowance is granted to a person for
each item of plant or machinery -
(a) that is used -
(i) in manufacturing processes and fixed in a factory;
(ii) in fish farming; or
(iii) for providing services to tourists and fixed in a hotel;
and
(b) that is added to the person’s Class 2 or 3 pools of depreciable
assets for a business of the person in accordance with
paragraph 1(2). (2) The amount of the allowance granted for each asset under
subparagraph (1) is calculated as fifty percent of the net cost of the asset
at the time it is added to the pool.

lowance granted for each asset under
subparagraph (1) is calculated as fifty percent of the net cost of the asset
at the time it is added to the pool.

(3) The allowance granted to a person under subparagraph (1) shall
be available in two portions as follows-
(a) the first portion shall be available in the year of income in
which the asset is added to the person’s pool of depreciable
assets; and
(b) the remaining portion shall be available during the year of
income following that in which the first portion is added, but
not if the pool has been dissolved under paragraph 4 in the
meantime. 3.–(1) Subject to this paragraph, an allowance shall be granted to a
person for a year of income for each of the person’s pools of depreciable
assets equal to the depreciation for the year of income of each pool
calculated in accordance with subparagraphs (2), (7) or (8).

pools of depreciable
assets equal to the depreciation for the year of income of each pool
calculated in accordance with subparagraphs (2), (7) or (8).

(2) Depreciation for a year of income for each of a person’s pools of
depreciable assets shall be calculated:
(a) in the case of Class 1, 2 and 3 pools, according to the
diminishing value method; and
(b) in the case of Class 5, 6 and 7 pools, according to the straight
line method,
using the following formula:
A x B x C/365
Where -
A is the depreciation basis of the pool at the end of the year of
income;
B is the depreciation rate applicable to the pool; and
C is the number of days in the person’s year of income. (3) The depreciation basis of a Class 1, 2, 3 or 8 pool of depreciable
assets of a person at the end of a year of income is the total of-
(a) the depreciation basis of the pool at the end of the previous
year of income, if any, after deducting depreciation for that
Initial allowance
Depreciation
allowance

on basis of the pool at the end of the previous
year of income, if any, after deducting depreciation for that
Initial allowance
Depreciation
allowance

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.685
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
pool calculated under subparagraphs (2), (7) or (8) for that
year of income; and
(b) amounts added to the depreciation basis of the pool during
the year of income under subparagraph (5) in respect of
additions to the cost of assets in or added to the pool,
reduced, but not below zero, by incomings for the assets in the pool or
that have been in the pool derived during the year of income. (4) The depreciation basis of a Class 5, 6 or 7 pool of depreciable
assets of a person at the end of a year of income shall be the total of -
(a) the depreciation basis of the pool at the end of the previous
year of income; and
(b) amounts added to the depreciation basis of the pool during
the year of income under subparagraph (5) in respect of
additions to the cost of assets in or added to the pool,
reduced, but not below zero, by incomings for the assets in the pool
derived during the year of income.

to the cost of assets in or added to the pool,
reduced, but not below zero, by incomings for the assets in the pool
derived during the year of income.

(5) Additions to the cost of a depreciable asset included in a person’s
pools of depreciable assets are added to the depreciation basis of the
person’s relevant pool as follows:
(a) subject to item (b) of this paragraph at the time the asset is
added to the pool in accordance with subparagraph (2) of
paragraph 1 or the expenditure is incurred, whichever is
later; or
(b) in the case of an asset for which an initial allowance is granted
under paragraph 2, twelve months after the time referred to
in subparagraph (a). (6) The depreciation rates applicable to each pool referred to in
subparagraph (2) are-
CLASS RATE
1. 37.5%
2. 25%
3. 12.5%
4. [Deleted]
5. 20%
6. 5%
7. 1 divided by the useful life of the asset in the pool and rounded
down to the nearest half year
8. 100%
(7) Where the depreciation basis of a pool of depreciable assets at
the end of a year of income reduced by depreciation calculated under
subparagraph (2) produces an amount that is less than one million

iable assets at
the end of a year of income reduced by depreciation calculated under
subparagraph (2) produces an amount that is less than one million

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E. 2023]
686
shillings, additional depreciation of the pool shall be calculated as equal
to that amount. (8) The allowance granted to a person under subparagraph (1) for a
year of income with respect to a Class 5, 6 or 7 pool of depreciable assets
shall not exceed the depreciation basis of the pool at the end of the year
of income reduced by all other such allowances granted to the person in
any previous year of income in respect of the pool. (9) For the purposes of calculating the depreciation basis of a pool
of depreciable assets -
(a) amounts to be added under subparagraph (5) in respect of
an asset when it is added to the pool shall be reduced by any
initial allowance available under paragraph 2 in respect of
the asset, irrespective of the year of income for which the
initial allowance is available; and
(b) expenditure incurred in acquiring a road vehicle, other than
a commercial vehicle, to the extent that the expenditure
exceeds thirty million shillings the excess shall not be
recognised.

road vehicle, other than
a commercial vehicle, to the extent that the expenditure
exceeds thirty million shillings the excess shall not be
recognised.

(10) For the purposes of this paragraph, “commercial vehicle”
means-
(a) a road vehicle designed to carry loads of more than half a
tonne or more than thirteen passengers; or
(b) a vehicle used in a transportation or vehicle rental business. 4.–(1) The excess of-
(a) incomings derived by a person during a year of income for
any assets that are or have been in a Class 1, 2, 3, 5, 6 or 8 pool
of depreciable assets of the person during the year of income;
over;
(b) (i) or (ii), as appropriate -
(i) in the case of a Class 1, 2, 3 or 8 pool, the depreciation
basis of the pool at the end of the year of income
calculated under paragraph 3(3) but disregarding those
incomings; or
(ii) in the case of a Class 5 or 6 pool, the written down value
of the pool at the end of the year of income calculated
under subparagraph (4) but disregarding those
incomings,
shall be included in calculating the person’s income for that year of
income from the business in which the assets are or were employed.

se
incomings,
shall be included in calculating the person’s income for that year of
income from the business in which the assets are or were employed.

(2) Where the assets in a pool of depreciable assets of a person are
all realised by the person before the end of a year of income, the pool
shall be dissolved and -
(a) an amount is included in calculating the person’s income
for the year of income calculated in accordance with the
following formula:
Realisation of
depreciable assets

luded in calculating the person’s income
for the year of income calculated in accordance with the
following formula:
Realisation of
depreciable assets

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.687
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
A – B
or
(b) an allowance shall be granted to the person for the year of
income calculated in accordance with the following formula:
B – A
Where -
A is the person’s incomings derived during the year of income,
or to be derived, for the assets; and
B is the sum of-
(i) the written down value of the pool at the end of the
previous year of income;
(ii) any initial allowance otherwise available in respect of the
pool for the following year of income under paragraph 2;
and
(iii) expenditure added to the depreciation basis of the pool
during the year of income or to be added during the
following year of income under paragraph 3(5). (3) [Deleted].

o the depreciation basis of the pool
during the year of income or to be added during the
following year of income under paragraph 3(5). (3) [Deleted].

(4) For the purposes of this section, “written down value” of a pool
of depreciable assets at the end of a year of income means -
(a) in the case of a Class 1, 2, 3 or 8 pool, the depreciation
basis of the pool at the end of the year of income, if any,
after deducting depreciation for that pool calculated under
paragraph 3(2) and (7) for that year of income; or
(b) in the case of a Class 5, 6 or 7 pool, the depreciation basis
of the pool at the end of the year of income reduced by all
allowances granted to the person under paragraph 3(1) for
that year of income and any previous year of income in
respect of the pool. 5.–(1) The whole of depreciation allowance expenditure incurred in
respect of mineral or petroleum operations during a year of income
shall be placed in a separate pool. (2) Subject to subparagraph (1), the depreciation allowances
shall be granted with respect to each pool at the rates provided for in
subparagraph (3).

(2) Subject to subparagraph (1), the depreciation allowances
shall be granted with respect to each pool at the rates provided for in
subparagraph (3).

(3) Depreciation allowance shall be granted for expenditure pooled
under subparagraph (1) for a year of income at the following rates:
Year of Income Depreciation Allowance
First Year 20% of expenditure
Second Year 20% of expenditure
Third Year 20% of expenditure
Depreciation
allowances
for mineral
or petroleum
operations
Act No. 2 of 2016 s. 34

iture
Second Year 20% of expenditure
Third Year 20% of expenditure
Depreciation
allowances
for mineral
or petroleum
operations
Act No. 2 of 2016 s. 34

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.THE INCOME TAX ACT [CAP. 332 R.E. 2023]
688
Year of Income Depreciation Allowance
Fourth Year 20% of expenditure
Fifth Year 20% of expenditure
(4) The depreciation allowance granted with respect to a particular
year of income shall be taken in that year and shall not be deferred to a
later year(s) of income. (5) Where an asset for which depreciation allowance have been or
may be granted under this paragraph realised during a year of income
where-
(a) the incomings derived from the realisation of an asset(s),
exceed the written down value of the pool of depreciable
assets, the excess shall be included in calculating income
from the mineral or petroleum operations for the year; and
(b) the written down value of the pool of depreciable assets
exceed the incomings derived from realisation of all assets
in the pool, the excess of written down value in the pool of
assets may be granted for that year of income and the pool
shall be dissolved.

all assets
in the pool, the excess of written down value in the pool of
assets may be granted for that year of income and the pool
shall be dissolved.

(6) Where incomings are derived by a person during a year of
income with respect to a depreciable asset employed by the person in
mineral or petroleum operations but the asset is not realised at that
time in whole or in part, the incomings shall be included in calculating
income from the mineral or petroleum operations for the year. (7) In this paragraph-
“depreciation allowance expenditure” means-
(a) additions to the cost of depreciable assets owned and
employed by a person wholly and exclusively in mineral or
petroleum operations; and
(b) expenditure other than financial costs incurred in
respect of mineral operations wholly and exclusively on
reconnaissance, appraisal and prospecting or exploration
operations or in developing mineral or petroleum operations
and infrastructure, including as may be prescribed by
regulations, where-
(i) the expenditure is not directly deductible in calculating
income from the operations; and
(ii) does not otherwise fall to be included in the cost of an
asset;
“written down value of a pool of depreciable assets at a particular
time during a year of income” means-
(a) the written down value of the pool at the end of the previous
year of income; plus

ble assets at a particular
time during a year of income” means-
(a) the written down value of the pool at the end of the previous
year of income; plus

©2025 Government of Tanzania. All rights reserved. No part of this book may be reproduced or distributed without permission of OAG.689
THE INCOME TAX ACT [CAP. 332 R.E. 2023]
(b) expenditure incurred prior to the time, which is added to the
depreciation basis of the pool during the year of income or to
be added during the following year of income; less
(c) incomings derived during the year of income or to be derived
with respect to a realisation occurring prior to the time in
respect of assets that are or have been in the pool; and
“written down value of an asset” means the cost of the asset less all
depreciation allowances granted with respect to expenditure included
in that cost.
FOURTH SCHEDULE
(Made under section 133(5))
[Revoked by Act No.10 of 2015s.125.]
FIFTH SCHEDULE
(Made under section 27(1)(a))
QUANTIFICATION OF MOTOR VEHICLE BENEFITS
ENGINE SIZE OF
VEHICLE QUANTITY OF PAYMENT
Vehicle less than
5 years old
Vehicle more than
5 years old
Not exceeding 1000cc Tshs. 250,000 Tshs. 125,000
Above 1000cc but not
exceeding 2000cc Tshs. 500,000 Tshs. 250,000
Above 2000cc but not
exceeding 3000cc Tshs. 1,000,000 Tshs. 500,000
Above 3000cc Tshs. 1,500,000 Tshs. 750,000

ding 2000cc Tshs. 500,000 Tshs. 250,000
Above 2000cc but not
exceeding 3000cc Tshs. 1,000,000 Tshs. 500,000
Above 3000cc Tshs. 1,500,000 Tshs. 750,000

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