A Must File of Returns After Registration of Business Entity in Tanzania

All business entities in Tanzania are required to file tax returns to the Commissioner of Tanzania Revenue Authority (TRA) according to Section 91 of the Income Tax Act R.E 2019 and Section 46 of the Tax Administration Act R.E 2019. This includes filing Pay as You Earn (Payee), withholding, Skills development levy, VAT, and income tax. This requirement is mandatory, and failure to comply attracts penalties for the business.

Now business owners should be aware that tax returns are required to be filed regardless the business entity has not yet registered itself for a Tax Identification Number (TIN) and obtained Tax Clearance Certificate. This comes after a TRA public notice was issued to remind taxpayers of the duty to make the filings to avoid penalties and other encumbrances.

Business entities that are not operating or have ceased to carry out their usual work operations but are still recognized by TRA as existing taxpayers are required as well to make filing of tax returns. Those with no TIN or with TIN but the business is not in operation yet are not released from filing tax returns. A taxpayer must make sure tax returns are filed on time. To those unaware, this may attract a huge penalty in time.

The registration systems for TRA and the Business Registrations and Licensing Agency (BRELA) operate harmoniously. Once an entity is registered with BRELA, TRA receives the same updates for the existence of a business. Even if a taxpayer has not attended TRA, the authority still holds the business entity accountable for tax payment in Tanzania, as required under Section 3 of the Income Tax Act.

A taxpayer must comply to file returns because by the time penalty(s) accrues, he/she cannot proceed with other regulatory compliances such as obtaining of tax clearance certificate unless penalty(s) is cleared or settles with the commissioner for TRA. Business entities that have not yet complied with the filing of tax returns must strive to make sure the business is in compliance and has paid the required tax dues if any. When the filling process is stiff it’s important to resort to professional assistance.

Disclaimer:

This publication has been prepared for information purposes only, and it does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, Cymbell Attorneys, its partners, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.