Contents - Tanzania Revenue Authority

PART SEVEN
7.0 TYPES OF TAXES AND HOW TO CALCULATE THEM
7.1 VALUE ADDED TAX (VAT)
VAT is a consumption tax charged by VAT registered traders
on all taxable goods and services at a standard rate of 20%.
The VAT is a multistage tax levied at each stage of production
and distribution up to the retail stage. The tax is also levied on
taxable imports made by persons whether or not registered
for VAT.
All traders whose taxable turnover exceeds TZS 40 million per
annum (for Tanzanian Mainland) and TZS 20,000,000 (for
Zanzibar) are obliged to apply for VAT registration to the
respective Commissioners in their respective Tax Authority.
They are also required by law to keep records and books of
accounts of their business.
(a) VAT ACCOUNT
This shows, on one hand, a brief report of tax collection on
sales and any changes in tax collection and on the other hand
a brief report of taxes paid on purchases and any changes
made in taxes, which were paid. Thus the actual VAT paid or
remitted shall be realized.
You are supposed to keep VAT brief reports within the period
of VAT returns. Add the columns of VAT in your books of
account regularly, say weekly, and the sum should be written
in briefs under the following headings:-
Table no: 2 VAT ACCOUNT
S/N VAT ON PURCHASES VAT ON SALES
1. Internal purchases Sales
2. Imports of goods Goods for personal use
3. Errors of previous returns Errors on previous returns
Total Total
23