Withholding Tax in Tanzania: Rates and Rules
Withholding tax is income tax collected at the source: the payer deducts it from a payment and remits it to TRA, and the payee receives the net amount. Tanzania's schedule sets a different rate for each kind of payment, and often a different rate again when the payee is not resident.
The short answer: Withholding tax is deducted by the payer and remitted to TRA. Commercial rent and interest are 10%; service fees are 5% for residents and 15% for non-residents; VAT withholding is 3% on goods and 6% on services.
Filed under Business & VAT
Maintained by David M at Delta Tech Solutions · Figures last checked 19 September 2026 · Next check due 19 March 2027
Content updated 24 October 2026
Tanzania Withholding Tax Calculator
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The idea: tax collected before the money moves
Rather than waiting for a payee to declare income and pay tax on it later, TRA requires the payer to withhold a percentage at the moment of payment. The obligation sits with the payer, not the payee — a business that fails to withhold can be held liable for the tax it should have deducted.
The rates depend on what is being paid
Each payment type carries its own rate, and several differ by the payee's residency:
- Commercial rent, interest and royalties — 10%, resident or not.
- Dividends — 10%, falling to 5% where a resident corporation holds 25% or more of a listed payer.
- Service fees — 5% to a resident, 15% to a non-resident.
| Payment | Resident payee | Non-resident payee |
|---|---|---|
| Commercial rent | 10% | 10% |
| Interest and royalties | 10% | 10% |
| Dividends (other than 25%+ listed holdings) | 10% | 10% |
| Service fees | 5% | 15% |
| Technical service fees (mining) | 10% | 15% |
| Hiring a motor vehicle | 10% | Not applicable |
VAT withholding is a separate obligation
A withholding agent buying goods or services from a supplier also withholds VAT under section 5(5) of the VAT Act — 3% on goods and 6% on services. It appears in the same schedule but it is not income tax on the supplier's profit: it is VAT being paid over early, and it is credited against the supplier's VAT return rather than their income tax.
What the payee still has to do
Being withheld is not the end of the matter for a resident payee. The income is still declared, and the tax already withheld is claimed as a credit against the final liability — so a payer's failure to issue a withholding certificate creates a real problem, which is why certificates matter more than they look.
What a tenant withholds from 1,000,000 TZS rent
A commercial landlord receiving 1,000,000 TZS has 100,000 TZS withheld at 10%, because the tenant remits it to TRA. A non-resident providing services is withheld at 15% (150,000 TZS on the same amount), where a resident service provider is withheld at 5%. The calculator below covers every payment type in TRA's schedule, including the rows that apply only to residents or only to non-residents.
The landlord in this example rents a commercial property in Kariakoo and never handles the tax himself — his tenant withholds it and pays it over.
Remitting and filing
The payer remits the withheld tax to TRA and files the return for the period. The current due dates are set by TRA; the common schedule is the 7th of the following month for payment and the 15th for the return, but confirm the current dates before relying on them. Keep the payment reference and the return acknowledgement with the payment records.
Withholding certificates
A payer should issue a withholding certificate to the payee showing the payment, the rate and the tax withheld. The payee needs it to claim the tax as a credit against the final liability. A missing certificate does not make the income tax-free; it makes the credit harder to prove, which is why the certificate is part of the obligation rather than an optional courtesy.
Penalties, refunds and tax treaties
Late remittance or a missing return can attract fines and interest; confirm the current penalty with TRA. If too much was withheld, the payee claims the excess through the return rather than asking the payer to correct it informally. A non-resident's rate may be reduced by a tax treaty, but the payer should not apply the treaty rate without the documentation TRA requires.
Results are estimates provided for information only and do not constitute financial, legal or tax advice. Consult a qualified professional before making financial decisions.
Related guides
Withholding Tax in Tanzania: Rates and Rules FAQs
Who is responsible for withholding tax?
The payer. They deduct it from the payment and remit it to TRA, and they can be held liable if they fail to withhold.
What is the withholding rate on commercial rent?
10% of the rent. The tenant withholds it and remits it to TRA.
Why are some rates higher for non-residents?
Because a non-resident may have no other Tanzanian tax presence, so the withheld amount is often the final tax. Service fees, for example, are 5% for a resident and 15% for a non-resident.
Is the VAT withholding part of income tax?
No. The 3% on goods and 6% on services is VAT paid over early under section 5(5) of the VAT Act and credited against the supplier's VAT return.