The Finance Act, 2021 has amended the Local Government Authorities (Rating) Act, CAP 289 and the Tax Administration Act, 2015 to affect property tax in Tanzania.
The Finance Act, 2021 has amended the Local Government Authorities (Rating) Act, Cap 289 to impose property rate on all buildings on a single plot, previously, in the case of a plot with more than one building, property tax was imposed on one building only. All buildings in actual occupation in a plot including improvements on, in or under such buildings are now regarded as rateable property for purposes of property tax in district councils. The reason for this broad definition is to expand the tax base and enhance compliance.
The Finance Act, 2021 has amended the Local Government Authorities (Rating) Act, Cap 289 to increase property rate on city council, municipal council, and town council areas from TZS 10,000 to TZS 12,000 and from TZS 50,000 to TZS 60,000 for ordinary buildings and each storey in a storey building respectively. Further to that the property rate on district council areas has been increased from TZS 10,000 to TZS 12,000 and TZS 20,000 to TZS 60,000 for ordinary buildings and each storey in a storey building respectively. In addition, the Finance Act, 2021 has specified that 15% of property rate collections will be remitted to the Ministry responsible for Local Government Authorities (LGA), prior to this change, the allocation was based on the LGAs budget.
To ensure compliance, the Finance Act 2021 has introduced changes to the Tax Administration Act (TAA), 2015 on the manner of paying taxes specifically Property Tax/Rate. The amendments are basically meant to enable payment of property rate/tax at the time when one makes a payment for electricity bill. This move is aimed at simplifying collection of property rate tax and reduce compliance cost.
Considering the above, the Tanzania Revenue Authority (TRA) issued a PUBLIC NOTICE that the commencement of implementation of the said amendments shall be effectively from the 20th of August 2021 in collaboration with The Tanzania Electric Supply Company Limited (TANESCO) for all electricity meters.
Therefore, to facilitate this amendment, the Tenants and Landlords need to set forth terms for the compensation of the property tax paid by tenants on behalf of landlords while purchasing electricity bill.
Furthermore, the tricky aspect of this amendment is that for most leased buildings for both residential and commercial usages, tenants are the ultimate payers of electricity bill.
These regulations have enhanced compliance and have enforced obligations on the licensees to moderate and establish measures that ensure that their contents are protected, safe, not prohibited, do not contravene any provision of the laws and their contents have measures to enhance protection of children online.
In addition, the regulations confer the TCRA with power to order content take down (removal). The online content licensees shall ensure that contents are removed upon notification by the Authority or affected party. There is no any appeal mechanism or any remedial measures for orders of takedown (removal) set by these regulations.
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