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2.1ÌýÌýÌýÌý Withholding of income tax

FA 2024 did not introduce new tax rates, maintaining the existing rate structure.

The withholding tax system in respect of income from employment under the Income Tax Act is described as Pay As You Earn (PAYE).

A resident employer or a non-resident employer with a permanent establishment (5.3.2) in Tanzania who makes a payment that is included in calculating chargeable employment income of the employee is obliged to be registered for PAYE and withhold income tax from the payment at the rate prescribed in the Income Tax Act (see below for tax rates).

The monthly pay of an employee includes basic salary, allowances and benefits-in-kind and any other allowances received by the employee in respect of their employment or services performed.

Monthly tax is calculated by multiplying monthly pay by 12, applying the appropriate tax rate for the year and dividing the resulting amount by 12. If an employee's income changes during the calendar year and the original tax proves not to be correct under the new circumstances, then an adjustment in