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.
How it works
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 yearsWorked examples
Example
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.
Frequently asked questions
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.
Reviewed by the Calculator editorial team · Last updated 19 September 2026
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