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What is Income Tax Act in Tanzania?

What is Income Tax Act in Tanzania?

The Income Tax Act requires every individual who is liable to pay tax in the United Republic of Tanzania, to maintain all documents necessary to enable an accurate determination of the tax payable.

Who makes tax regulations in Tanzania?

All central government taxes are administered by the Tanzania Revenue Authority (TRA). The authority has three tax departments (Domestic Revenue, Customs and Excise, and Large Taxpayers (in respect of all taxes). TRA is headed by a Commissioner General in charge of tax collection and day to day administration.

What are the 3 aspect of taxation?

The levying of taxes can be divided into three successive phases: (1) assessment, or the definition of the exact amount subject to taxation under the statute; (2) computation or calculation; and (3) enforcement.

What is a permanent establishment certificate?

A permanent establishment is an international tax concept, which means a business could be subject to tax in foreign countries where they conduct business. There are a few common types of permanent establishments, including fixed place of business, sales agents, and service.

What are the 4 types of income taxes?

In a broader term, there are two types of taxes namely, direct taxes and indirect taxes. The implementation of both taxes differs. You pay some of them directly, like the cringed income tax, corporate tax, wealth tax, etc., while you pay some of the taxes indirectly, like sales tax, service tax, value added tax, etc.

What are the types of taxes in Tanzania?


  • Digital service tax. A non-resident involved in digital transactions (i.e. providing electronic services) is required to account for tax of 2% on the turnover (excluding VAT).
  • Value-added tax (VAT)
  • Customs duty.
  • Excise duty.
  • Fuel levy.
  • Petroleum levy.
  • Stamp duty.
  • Railways Development Levy (RDL)

What are the 4 criteria for taxation?

In The Wealth of Nations (1776), Adam Smith argued that taxation should follow the four principles of fairness, certainty, convenience and efficiency. Fairness, in that taxation, should be compatible with taxpayers’ conditions, including their ability to pay in line with personal and family needs.

What are the types of income tax?

Here is a list of 3 various kinds of income taxes-

  • Wealth Tax. If you want to know about the different types of income tax, start with the wealth tax.
  • Corporate Tax. As per the IT Act of 1961, national as well as international corporate organisations are also required to pay corporate tax.
  • Capital Gains Tax.

What are the four principles of taxation?

Why no permanent establishment certificate is required?

Similarly, in case the non resident does not have a permanent establishment in India, the business profits would not be liable to tax in India. In such cases as well, no PE Certificate is required to be obtained by the Indian payor, to apply Nil rate of tax applicable to such payments.

How many types of permanent establishment are there?

three types

There are three types of permanent establishment under Indian law: Fixed Place PE, Agency PE, and Service PE.

What are the 5 sources of income?

5 Heads of Income for Computation of Income Tax

  • Salaries.
  • House Property.
  • Profits and Gains of Business or Profession.
  • Capital Gains.
  • Other Sources.

What are the 3 types of income?

In this article, we will have a closer look at the three types of income as well as their impact on the financial health of a person.

  • Income #1: Earned Income.
  • Income #2: Investment Income.
  • Income #3: Passive Income.

What are the 4 types of tax?

Digressive Tax.

  • Tax Type # 1. Progressive Tax:
  • Tax Type # 2. Proportional Tax:
  • Tax Type # 3. Regressive Tax:
  • Tax Type # 4. Digressive Tax:

What are the 2 principles of taxation?

These are: (1) the belief that taxes should be based on the individual’s ability to pay, known as the ability-to-pay principle, and (2) the benefit principle, the idea that there should be some equivalence between what the individual pays and the benefits he subsequently receives from governmental activities.

What are types of tax?

Some important Direct taxes include:

  • Income tax.
  • Wealth tax.
  • Gift tax.
  • Capital Gains tax.
  • Securities Transaction tax.
  • Corporate tax.

What are the 5 types of income tax?

Let us understand these tax heads of income one by one in detail.

  • Income from Salary.
  • Income from House Property.
  • Income from Profits and Gains from Business or Profession.
  • Income from Capital Gains.
  • Income from Other Sources.

What are the 3 primary sources of tax law?

There are three basic types of authoritative documents: statutory, administrative and judicial. remained fixed with the Code until the Tax Reform Act of 1986 replaced it with “1986.”

Does a bank account create a permanent establishment?

For companies forming in a country for the purpose of opening a bank account, permanent establishment is generally not created unless a place of business is obtained.

What is permanent establishment in Tanzania?

Under the ITA-2004, a non-resident entity can have a permanent establishment (PE) in Tanzania if it carries on business in Tanzania, including a place where a person: (1) is carrying on business through a dependent agent; (2) has used or installed, or is using or installing, substantial equipment or machinery; and (3) …

What are the 7 types of income?

Aside from diversification, there are other ways to generate income known as the seven streams of income;

  • Earned Income.
  • Profit Income.
  • Interest Income.
  • Dividend Income.
  • Rental Income.
  • Capital Gains Income.
  • Royalty Income.

What are the 8 types of income?

8 Types of Income Streams

  • Earned Income.
  • Profit Income.
  • Interest Income.
  • Residual Income.
  • Rental Income.
  • Royalty Income.
  • Dividend Income.
  • Capital Gains.

What are the 7 sources of income?

What are the 4 sources of income?

Different Streams of Income

  • Earned income: This is your day job and most people’s primary source of income.
  • Business income: You own a business.
  • Interest income: This is income you make from lending your money out.
  • Dividend income: This is money that’s distributed as a result of owning shares of a company.

What are the 3 types of income tax?