Tanzanian-Tax: TRA to Obtain House Rent Tax Through Tenants

If the new law is enacted, tenants will now withhold 10% of their payable house rent to be deducted as tax.

Tanzanian-tax administration as part of its efforts to expand the scope of tax payment will now authorize tenants to withhold 10% of house rent in both private and commercial houses. This move is coming from the Tanzania Revenue Authority (TRA).

Once this law is passed, the house owners will be the ones to remit the house rent tax to the government. This is part of the TRA’s strategy to facilitate the collection of Sh23.65 trillion in tax by the end of the financial year 2022/23.

This plan has however been greeted with mixed reactions as some taxpayers don’t agree with it.

While speaking to journalists on the tax body’s tactics to ensure the collection target as part of the government’s budget of Sh41.48 trillion, the authority’s Taxpayer Services and Education director, Mr. Richard Kayombo revealed that the change will see tenants remit 10% of their rent to TRA, unless in cases where there is an agreement that the house owners themselves will go and pay at TRA.

He mentioned that unlike in the past when only tenants in commercial buildings were paying the tax, private tenants will now be required to do this as well. He also said that there will be a contract between a tenant and the landlord which will be the basis for the submission of the tax and once it is paid, they will be given certificates.

This is a follow-up to the government’s implementation of property tax collection through the purchase of electricity tokens. Landlords have, however, chosen to remit the tax themselves instead of letting their tenants do so.

Tanzanian-Tax: House Owners’ reactions

One of the landlords in Dar es Salaam reacted that rather than having the tenants remit the tax which will lead to house owners receiving a deducted rent, the government should devise a means that forces landlords to pay it.

He also lamented over the 10% tax, stating that this was a high price that he couldn’t afford. He then advised the government to reduce the percentage and put in place better procedures that will help them collect these taxes.

Another landlord, Ms. Margret Moses who lives in Segerea said she has already been doing that by instructing her tenants to pay her through the bank where she has been directly remitting the 10% tax to TRA without any issue.

She stated that this development had already been in existence before now but lack of awareness has led to many not observing it.

Tanzanian-Tax: Tenant’s reaction

A resident of Mbezi, Mr. Moses Amani stated that although this initiative is a great idea, it might generate animosity between landlords and tenants, as he believes the payment of tax should be the responsibility of the landlord, not the tenant.

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