Presumptive Tax in Tanzania for Small Traders

Who the regime covers

It covers individual traders — sole proprietors — whose annual turnover does not exceed 200 million TZS. A company is outside it. The appeal for a small trader is that no audited accounts are required unless the trader elects to keep them, because the tax is assessed from turnover.

The turnover bands

TRA publishes two columns: the tax when the trader keeps complete records, and a flat amount when records are incomplete. Keeping records is therefore not only good practice, it is usually cheaper: at 5 million TZS of turnover a trader with records pays 3% of the amount above 4 million, while one without records pays a flat 100,000 TZS.

Transport operators pay a flat rate instead

If you carry passengers or goods, the tax is a fixed annual amount that depends on the vehicle rather than on what it earns. A taxi pays 180,000 TZS a year, a ride-hailing car 350,000, ride-sharing 450,000 and a special hire vehicle 750,000. Passenger service vehicles are banded by seat count, tour vehicles by the number of tourists, and goods vehicles by carrying capacity in tonnes.

The relief for a new business

A new taxpayer whose turnover falls between 4 million and 200 million TZS pays no tax for the first 12 months of business, provided the conditions the Commissioner sets are met. It is a genuine relief rather than a deferral, but it applies once — the year after, the normal bands apply.

What Musa pays on 30,000,000 TZS of turnover

An individual trader with 30,000,000 TZS of annual turnover and complete records pays 1,200,000 TZS under the presumptive regime. A taxi operator on the flat schedule pays 180,000 TZS a year and a ride-hailing driver 350,000 TZS, whatever the vehicle earns. Above 200 million TZS the regime stops applying altogether and the trader files a full income tax return instead, so there is no band to look up at that point.

Musa keeps a shop in Kiteto and keeps proper records, which puts him in the graduated band of the presumptive regime rather than the flat transport schedule.

How and when the tax is paid

Presumptive tax is paid through TRA's channels with the return for the period. The payment cycle and the current due dates are set by TRA, so confirm them on the presumptive-tax page or at a TRA office rather than relying on a remembered date. Keep the payment receipts with the turnover records: they are the evidence that the period was filed and paid.

What records to keep

The two columns in TRA's table are the point of the records: a trader with complete records pays the turnover-based amount, and one without them pays the flat amount prescribed for the band. Keep the sales records, purchase invoices and a simple cash book that support the turnover declared. The records do not have to be audited accounts, but they do have to reconcile to the figure on the return.

Presumptive tax is not the only charge

Presumptive tax is an income tax; it does not replace the service levy or VAT. The service levy is a local-government charge on turnover, and VAT applies once taxable turnover passes the registration threshold. A trader can be in the presumptive regime for income tax and still be liable for those charges. Keep the income-tax receipt separate from the service-levy and VAT receipts, and confirm the current thresholds with TRA and the relevant local authority rather than assuming one payment covers all three.

Common mistakes

The recurring errors are treating turnover as profit, assuming the new-business relief repeats every year, using the wrong transport class, and staying in the presumptive regime after turnover passes 200 million TZS. A trader above the threshold moves to the ordinary income tax regime and may also cross the VAT registration threshold, so the exit from presumptive tax is a change of regime rather than a bigger band.

Related guides

Presumptive Tax in Tanzania for Small Traders FAQs