Tax is present almost everywhere in the entire world. It is a way for governments to make the country better. Therefore, it remains a very important topic in every working person’s life. Tax is enforced in a number of things. Even though many people have different thoughts about the subject, it is an unavoidable step.
Tax can be confusing to understand, but with The Shikana Group, you can get help to make the most out of your investment plans, business revenues, and profit. Shikana offers tax and regulatory services to those who wish to clear out their obligations.
What Is Tax Revenue?
Tax Tanzania and Tanzania tax revenue is the primary source for governments to earn money. This income comes from taxation methods.
These taxes can be imposed on a number of things such as income, expenses, royalties, public companies, and individuals. With this, governments can fund different projects and facilities for the country.
Types of Tax Revenue
1. Direct Tax:
Direct tax is a kind of tax that a company, organization, or individual directly pays to the group they are buying from. These taxes are then directly taken to the government as a part of revenue.
In Tanzania, this tax cannot be shifted to the responsibility of another being. Therefore, direct tax has been leveraged on two types of tax revenue:
● Corporation Tax:
Corporate Tax is the tax on the profits of a company. The company’s net profit purely pays it. It can be usually taken from the gross profit, which includes revenue, the cost of goods sold, and other expenses.
This tax can differ in other countries, but companies must prepare final accounts in Tanzania and present them to the approved auditors. The NBAA and TRA must recognize these auditors.
● Income Tax:
The government takes this particular tax from the individual incomes that companies provide. The tax can be deducted before issuing the payment to the recipient. People are informed of this before settling contracts and deals with their employers.
Income tax can be taken from workers’ salaries, wages, commissions, investments, and other business expenses. According to Tanzanian laws, regulations, and taxation rules, people can be taxed at a rate of 8% to 30%. However, nonresident individuals can be charged 20% of their total income.
2. Indirect Tax:
Unlike direct tax, indirect taxes allow the entity to pass on the tax to another being, individual, company, or group. The one who collects the tax will take it onwards to the government as tax revenue.
This is different from direct tax as the one who files the tax directly sends it to the government itself. Tanzanian laws use Value Added Tax (VAT) as a way of indirect taxation:
● Value Added Tax:
This particular tax strategy is placed on viable goods that people pay for. This allows the group handling it to impose the tax on secondary beings. Value Added Tax is a way for companies to increase their prices on the goods to make up for the tax amount.
In this way, customers would be paying slightly more for the products. It is then calculated after measuring the cost of goods sold, revenue, and profit values. In Tanzania, all the goods pertaining to this law is kept at a tax rate of 18%.
How Shikana Can Help
Tax Tanzania and Tanzania tax revenue can be very difficult and daunting, which is why we advise you to get professional guidance from Shikana Group. We advise clients on the appropriate ownership structure for the business they want to set up. Including corporations, partnerships, limited liability companies, and joint ventures, we analyze the benefits, costs, and risks associated with the choice of a particular business entity based on our extensive experience assisting foreign investors coming into the African marketplace.
We also provide a full range of services related to immigration and labor law, including liaising with relevant Government authorities for work permits, investor permits, and related matters. We use our unmatched experience to deliver efficient and transparent legal and investment advisory support for our clients.
Our firm offers services in the following domains:
- International trade and taxation
- Commercial and business law
- Compliance
- Venture Capital and Private Equity advisory services
Contact us for legal advice you can believe in.