Corporate tax rate.
The income tax rate for resident and non-resident companies is 30%. (No discrimination)
There is a reduced rate of 25% which is charged for three years to newly listed companies with Dar es Salaam Stock Exchange, with at least 35% of equity share issued to the public.
100% capital allowance in agriculture.
Investors in agriculture enjoy 100% capital allowance on expenditure incurred on plant and machinery, including windmills, electric generators and distribution equipment used solely in Agriculture.
50% Initial capital allowance.
The 50% allowance is granted on expenditure of plant and machinery that is used in manufacturing and installed in the factory or providing services to tourists and fixed in a hotel. Other rates for capital allowances range from 37.5% for items like computers and earthmoving equipment to 5% for buildings dams, water reservoir etc.
Withholding tax exemption
The law provides exemption of withholding tax chargeable by foreign banks on interests payable to strategic investors as defined by Tanzania Investment Act. This is one of the measures devised to encourage investment in the country.
The income tax law provides for tax credit in case the tax was paid abroad on the same income, which was assessed in respect to resident person (Individual or entity).
100% Deduction in mining operations.
Theinvestments in mining operations get special treatment in Tanzanian tax system. The whole expenditure incurred for the year (both capital and revenue expenditure) is deducted when calculating taxable income.
Income Tax exemption under Export Processing Zone (EPZ)
As per Income tax Act, 2004 the following amounts are exempted from income tax:-
- Income derived from investment or business conducted within the Export Processing Zone and Special Economic Zone, during the initial period of ten years.
- Payment of withholding tax in respect of foreign loan granted to an investor licensed under in the Export Processing Zone and Special Economic Zone during the initial period of ten years.
- Payment of withholding tax on dividend arising from investment in the Export Processing Zone and Special Economic Zone during initial period of ten years.
- Payment of withholding tax on rent payable by an investor licensed under the Export Processing Zone and Special Economic Zone during initial period of ten years.