Withholding Tax in Tanzania: What Is Withheld and by Whom
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.
Reviewed by the Calculator editorial team · Last updated 19 September 2026
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 are 10% for both residents and non-residents; dividends are 10%, falling to 5% where a resident corporation holds 25% or more of a listed payer; service fees are 5% to a resident and 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.
A worked example
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.
Tanzania Withholding Tax Calculator
Try it with your own numbers:
Results are estimates provided for information only and do not constitute financial, legal or tax advice. Consult a qualified professional before making financial decisions.
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Frequently asked questions
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.