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Depreciation Calculator

Work out the depreciation charge year by year for an asset, by straight line, declining balance or sum of years' digits — or use the Tanzanian Income Tax Act classes if you need the tax allowance rather than the accounting charge.

Filed under Business & VAT

Depreciation, year 1
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TSh 2,000,000
The same 2,000,000 TZS a year for 5 years.
Rate applied—
Total depreciation over the lifeTSh 10,000,000
Written-down value at the endTSh 0
Year 1TSh 2,000,000
Year 2TSh 2,000,000
Year 3TSh 2,000,000
Year 4TSh 2,000,000
Year 5TSh 2,000,000

Key facts

  • Class 1: 37.5%; Class 2: 25%; Class 3: 12.5%.
  • Class 6: 5%; Class 8: 100%.
  • Class 7: 1 ÷ useful life.
  • Tax depreciation is pooled; accounting depreciation is separate.
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How Depreciation is calculated

Accounting depreciation is a policy choice: straight line charges the same amount each year, declining balance charges a fixed percentage of what is left and so falls over time, and sum of years' digits front-loads the charge. Tax depreciation in Tanzania is not a choice — the asset goes into an Income Tax Act class pool and attracts that class's rate: 37.5% for computers, cars and construction equipment, 25% for heavy vehicles, aircraft and manufacturing plant, 12.5% for office equipment, 20% and 5% for qualifying buildings, and 100% for agricultural plant and electronic fiscal devices.

Straight line = (cost − salvage) ÷ life · Declining balance = rate × opening book value · Sum of years = (cost − salvage) × remaining life ÷ Σ years

Tanzania tax depreciation classes

Income Tax Act, Third Schedule. Classes 1, 2, 3, 5, 6 and 8 are pooled on a declining balance; Class 7 is written off over its useful life.
ClassRateTypical assets
Class 137.5%Computers and data handling equipment; automobiles, buses and minibuses seating under 30 passengers; goods vehicles under 7 tonnes; construction and earth-moving equipment.
Class 225%Buses seating 30 or more; heavy trucks, trailers and containers; railroad cars and locomotives; vessels, barges and tugs; aircraft; plant and machinery used in agriculture or manufacturing; specialised utility plant.
Class 312.5%Office furniture, fixtures and equipment, and any asset not included in another class.
Class 520%Buildings, structures and similar permanent works used in agriculture, livestock farming or fish farming.
Class 65%Buildings, structures and similar permanent works other than those in Class 5.
Class 8100%Plant and machinery including windmills, electric generators and distribution equipment used in agriculture; an electronic fiscal device bought by a trader not registered for VAT; equipment for prospecting and exploring minerals or petroleum.
Class 71 ÷ useful lifeIntangible assets, written off over their useful life

Depreciation worked examples

  • A 10,000,000 TZS asset with a five-year life

    Hamisi runs a haulage firm in Mbeya and bought a 10,000,000 TZS trailer for it.

    A 10,000,000 TZS asset over 5 years costs 2,000,000 TZS a year on the straight-line method, and 2,500,000 TZS in the first year on a 25% declining balance — less each year after that. For tax in Tanzania you do not choose: the asset goes into an Income Tax Act class pool and attracts that class's rate.

  • The same asset written down over eight years

    Hamisi's same trailer over a longer accounting life, which changes the annual figure but not the tax class.

    A 10,000,000 TZS asset over 8 years costs 1,250,000 TZS a year on the straight-line method, and 2,500,000 TZS in the first year on a 25% declining balance — less each year after that. For tax in Tanzania you do not choose: the asset goes into an Income Tax Act class pool and attracts that class's rate.

Depreciation: assumptions and limits

What it assumes

  • Straight-line spreads the cost equally; declining balance applies a fixed percentage to the reducing book value.
  • For tax in Tanzania the method is not a choice: the asset falls into an Income Tax Act class pool and attracts that class's rate.

Where the result does not apply

  • Accounting depreciation and tax depreciation are different figures, and a set of accounts may show both.
  • Does not calculate a capital allowance claim or a balancing charge on disposal.
  • Where an asset is used partly for private purposes, the allowable proportion is a matter for the tax computation.

Depreciation FAQs

What is the difference between straight line and declining balance?

Straight line spreads the same amount over every year of the asset's life. Declining balance charges a fixed percentage of the remaining book value, so the charge is highest in year one and falls each year after.

What depreciation rates does Tanzania use for tax?

The Income Tax Act sets them by class: 37.5% (Class 1), 25% (Class 2), 12.5% (Class 3), 20% (Class 5), 5% (Class 6) and 100% (Class 8), with Class 7 intangible assets written off over their useful life.

Does the tax allowance apply to each asset separately?

No. Classes 1, 2, 3, 5, 6 and 8 are pooled: like assets are depreciated together as a pool on a declining balance, which is why the tax figure can differ from the accounting charge on a single asset.

Where does salvage value fit?

The depreciable amount is the cost less the salvage value, and the schedule trues up in the final year so the book value lands on the salvage figure you entered.

Results are estimates provided for information only and do not constitute financial, legal or tax advice. Consult a qualified professional before making financial decisions.

Delta Tech Solutions prepared this page. No external tax, accounting or legal professional reviewed it — the figures were checked against the sources listed above, and you should confirm anything you rely on with the authority that sets it.

Sources: The Income Tax Act, Cap. 332 R.E. 2023, Third Schedule paragraph 1 — published by TRA

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

Read the guides:

Depreciation Methods and Tanzania Tax Classes →Presumptive Tax in Tanzania for Small Traders →

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