VAT Registration Requirements In Tanzania
A value-added tax (VAT) is a consumption tax that is levied on a product repeatedly at every point of sale at which value has been added.
VAT Registration Requirements In Tanzania
Registration for VAT is mandatory for every person upon attaining the registration threshold of 200 million in the period of twelve months and above.
This condition applies to all types of registration except for professional service providers, Government entity or institution that carries on economic activity, and intending traders after fulfillment of sufficient evidence such as contracts, tenders, building plans, business plans, and bank financing.
A person who is required to be registered shall make an application to Commissioner General within thirty days (30) but an intending trader may make such application at any time.
If the Commissioner General is satisfied that a person is required to be registered with VAT and there is a good reason including protection of Government revenue but has not applied for it, shall register and notify such person not later than 14 days after the day on which registration is done regardless of the turnover.
Registration process.
Application for VAT registration manually by filling form ITX245.02.E Application for Registration for VAT.
VAT Registration Certificate.
Upon registration, a taxpayer shall be issued with a Certificate of Registration stating the name and principal place of business of the taxable person, the date on which the registration takes effect, his Taxpayer Identification Number, and his VAT registration number.
A person shall show his Taxpayer Identification Number and his VAT registration number in any return, notice of appeal, or other documents used for official VAT purposes and display his certificate of registration in a noticeable position at his principal place of business.
What are the challenges facing VAT in Tanzania?
Amongst the challenges highlighted were: high levels of poverty; limited employment opportunities; continued slow growth of the agricultural sector; and a narrow tax base (with a low domestic revenue to GDP ratio (of almost 15%) as compared with the Sub-Saharan African country average (17%).
How VAT is calculated in Tanzania?
VAT calculation in Tanzania is based on the taxable value. Let us say that the taxable value is TZS 10,000 and the VAT rate is 18%. This denotes that 18% of TZS 10,000 will be VAT added on top of the taxable value. This is the total that needs to be paid.