Introduction

The Tax Consultancy is a professional like other professionals who are guided by rules and principles which include the provision of quality services to clients, to be honest, sincere and truthful in all practices. M/S Nshishi Attorneys & Tax Consultants as a newly established firm has decided to go a millage further by providing tax education to the taxpayers and the public at large aiming to assist the nation in enhancing the level of voluntary tax compliance.

In view of the above, we start with the Article 1 which discusses the obligation of taxpayers to file tax returns to the Tax Authority (TRA)

What is a return?

The return for tax purposes is simply a document for declaration of income, sales, tax withheld and other details made by or on behalf of the taxpayer.

Therefore the tax return In relation to income tax is referred to the following:-

  • Is a statement of tax withheld or treated as withheld filed under S.84 of Income Tax Act of 2004
  • A statement of estimated tax payable filed under S.89 of the Income Tax Act 2004
  • A return of income filed under section 91 if the income tax Act 2004

Other tax returns are returns which cater for Value Added Tax (VAT), Skills Development Levy (SDL), Gaming tax and Excise Duty

Who is required to prepare and sign the tax returns?

The Tax Administration Act 2015 provides the obligation of the taxpayer to prepare the tax return and file within the prescribed time to the Tax Authority. However in accordance to Section 37 of the Tax Administration Act 2015 the all returns of an Individual shall be signed by himself/herself and declare that it is complete & accurate while the income tax return of an entity (e.g. Companies) are required to be signed by both the Manager or Director of the Company and the Certified Public Accountant ( CPA) who is in public practice and Registered by National Board of Accountants and Auditors (NBAA) declaring that the return is complete and accurate . According to the same Law other returns such as VAT can be signed by the Manager or Director of that Company.

When tax returns are required to be submitted to the Tax Authority?

The due dates for filling the tax returns vary depending mainly on the tax type as follows:-

  1. Income Tax
    • Every withholding agent shall file with the Commissioner within thirty days after the end of each six-month calendar period a statement of tax withheld or treated as withheld filed under Section .84 of the Income Tax Act, 2004
    • In case of estimated tax payable under Section .89 of the Income Tax Act, 2004 shall be filled at the date for payment of the first tax installment an estimate of tax payable for the year of income with exception of a resident person who is conducting agricultural business shall file at the end of September, of the year of income.
    • In case of final return shall be filled with the Commissioner not later than six months after the end of each year of income as provided for under Section 91 of the Income Tax Act, 2004
  2. Value Added Tax (VAT)
    1. The Value Added Tax is a consumption tax (Indirect tax) which is applicable on supply of taxable goods and services. A taxable person shall file a VAT return on the 20th day of a month after the end of the tax period to which it relates.
    2. According to Section 66(7) of the Value Added Act, 2014 provides that where the 20th day falls on a Saturday, Sunday or a public holiday, the value added tax return shall be filled on the first working day following a Saturday, Sunday or public holiday.
    3. The VAT Law strictly requires that, whether or not the taxable person has a net amount of value added tax payable for that period shall comply to file the tax return on the due date
  3. Skills Development Levy (SDL)
    Section 16 of the Vocational Education and Training Act,1994 (VETA Act) requires the employers to file the return with the Commissioner on or before the 7th day of each month following the month which relates showing the total gross monthly emoluments payable and the levy with respect thereto
  4. Excise Duty
    1. Section 137 of the Excise (Management and Tariff) Act (Cap 147) provides the due date of filling the return for every manufacturer of scheduled articles or provider of excisable services which is not later than the last working day of the month following the month to which the return relates
    2. Every manufacturer of the scheduled article or provider of excisable services shall, within 21 days of commencing manufacturing of the scheduled article or providing excisable service; or of an article manufactured or excisable service provided by him becoming liable to duty, whichever is the earliest, submit to the Commissioner General a return giving details of the manufactured scheduled articles or excisable service provided by him, its price and all other particulars as may be prescribed.

Can the taxpayer be allowed to make corrections on the already filled tax Return?

A tax return which has been filed shall not be amended or corrected by the taxpayer unless as specified under the relevant tax law. A good exception is provided in Section 66(3) of the Value Added Tax Act 2014 where a taxable person who has filed a value added tax return may, on application in the prescribed manner and not later than three years after the end of the tax period to which the returns relates, request the Commissioner General to amend the returns to correct any genuine omission or incorrect declaration made in the returns.

Can the taxpayer be allowed to file the return after the due date?

The answer is YES; Section 39 of the Tax Administration Act 2015 provides that a person who is required to file a tax return under a tax law may apply to the Commissioner General for an extension of the time to file the return. The application shall be in writing within fifteen days before the due date for filling the return. The person will be served with a written notice of the decision. However the extension of filling the return will not alter the date of payment as per return and the extension of time will not exceed 30 days.

What are the consequences for failure to file tax return on time?

  • Section 40 of the Tax Administration Act 2015 deem late filled returns to be Ineffective returns: The same Section empowers the Commissioner General to make an assessment of tax liability of the person as required by the tax law, including by way of adjusted assessment, and may use any information in the his possession
  • Section 78 of Tax Administration provides that any person who fails to file a tax return on due date as required by a tax law is liable for a penalty for each month or part of a month during which the failure continues. The penalty is:-
    1. 2.5% of the amount of tax assessable with respect to the tax return less tax paid by the start of the period towards that amount
      OR
    2. In the case of an individual, 5 currency points or in the case of a body corporate, 15 currency points, whichever is higher ( 1 currency point = TZS 15,000)

What are the two methods of filling tax returns?

  • There are two methods of submitting tax returns to the tax authority which are electronically and manually
  • In addition to the VAT returns that are submitted electronically, the following tax returns forms with effect from August 2020 are also improved and submitted electronically;-
    • Statement of Estimated Tax Payable by Individual Businesses other than Mining or Petroleum Operations
    • Statement of Estimated Tax Payable by Installments for the Entity Businesses other than Mining or Petroleum, Insurance or Banking
    • Return of income made on behalf of the Entity Businesses other than Mining or Petroleum, Insurance or Banking
    • Return of income for Individual Businesses other than Mining or Petroleum
    • Monthly SDL return
    • Monthly PAYE statement (to enable payment of monthly PAYE deduction)
  • The below is a list of returns which are submitted manually
    • SETPI on behalf of an Entity for Mining or Petroleum Operations
    • SETPI by an individual for Mining or Petroleum Operations
    • Return of Income on behalf of the Entity for Mining or Petroleum Operations
    • Return of Income by an individual for Mining or Petroleum Operations
    • Return of income on behalf of a Partnership
    • Excise duty monthly return
    • Airport Service charge monthly return
    • Port Service charge monthly return
    • Half year Statement and payment of taxes withheld paid for employees
    • Half year Statement and payment of taxes withheld paid for other payments

NOTE: This article briefly explains the obligation of taxpayers to file tax returns to Tax Authority and it is not a substitute to the Tax laws. Therefore, in case of any contradictions in itself the Laws shall prevail and the author will not be responsible for any losses caused by misinterpretations of the relevant tax laws

For more help and details please visit us (M/S Nshishi Attorneys & Tax Consultants) at our office,  Ushirika Towers, 7th floor, Old wing, Lumumba St, Dar es Salaam, or call us through our mobile number 255736306201. We can help you on all Tax matters