ARRANGEMENT OF SECTIONS
1. Short title.
IMPOSITION OF AND LIABILITY TO VALUE ADDED TAX
3. Imposition of VAT.
4. Scope of VAT.
5. Taxable supplies.
6. Time of supply.
7. Place of supply.
8. Rate of VAT.
11. Special reliefs.
12. Amendment of the Schedules.
13. Taxable value.
14. Taxable value of imported goods or services.
16. Tax deductions and credits.
17. Payment and repayment of tax.
REGISTRATION AND DEREGISTRATION
20. Certificate of Registration and Taxpayer Identification Numbers, etc.
21. Cancellation of registration.
22. Business carried on in divisions or branches or by unincorporated bodies, etc.
23. Changes in business circumstances.
ACCOUNTING FOR TAX AND LODGING OF RETURNS
24. Accounting for tax.
25. Records and accounts.
26. Tax returns.
27. Late lodgement of returns.
28. Interest on overdue tax and repayment.
29. Tax invoices and receipts.
30. Special methods of accounting.
FAILURE TO PAY VAT
31. Recovery of tax, penalties, and interest.
32. Attachment of debts.
33. Requirement to make early payment
34. Recovery of debts by distress.
36. Taking of samples.
37. Furnishing of information and production of documents.
38. Access to official information.
39. Power to enter, inspect, etc.
40. Obstruction of an officer.
41. Impersonation of an officer.
42. Limitation of liability of officers and staff.
43. Assessment of tax.
OFFENCES AND PENALTIES
44. Failure to register, etc.
45. Failure to pay tax or lodge returns.
46. False returns and statements.
47. Fraudulent evasion or recovery.
48. Publication of list of persons who commit offences.
49. Compounding of offences.
50. Detention of goods.
51. Offence by body corporate.
52. Functions, responsibilities, and powers of the Commissioner-General and Commissioner.
53. Authorised officers to have protection of police officers, and power of arrest.
54. Powers in respect of imported and export goods.
58. Tax shown on an invoice.
60. VAT representatives.
61. Supplies by bankrupt or deceased, etc.
62. Transfer of a going concern.
63. Advertised prices to include VAT.
64. Tax adjustments of contracts.
65. Priority of VAT debts in bankruptcy.
66. Evidence by certificate.
67. Schemes for obtaining undue tax benefits.
68. Service of notices, etc.
70. Repayments and remissions.
71. Transitional arrangements.
72. [Repeal and savings.]
73. [Amendment of Cap. 105.]
74. [Amendment of Cap. 104.]
75. [Amendment of Cap. 189.]
THE VALUE ADDED TAX ACT
An Act to make provision for the imposition of a tax to be known as the Value Added Tax (VAT) on supplies of goods and services and for related matters.
[1st July, 1998]
[1st January, 1998]
[1st March, 1998]
24 of 1997
2 of 1998
8 of 1998
10 of 1999
12 of 1999
11 of 2000
15 of 2000
14 of 2001
10 of 2002
18 of 2002
24 of 1999
PRELIMINARY PROVISIONS (ss 1-2)
This Act may be cited as the Value Added Tax Act.
In this Act, unless the context requires otherwise–
"agent" means a person who acts on behalf of another person in business;
"Appeals Tribunal" means the Value Added Tax Appeals Tribunal established under section 54;
"authorised officer" means any officer acting under the authority of the Commissioner-General for the purposes of this Act;
"authority" means the Tanzania Revenue Authority;
"business" includes any form of trade or commercial activity;
"Certificate of Registration" means a certificate issued under section 20 of this Act;
"Commissioner" means a person appointed as such under section 51;
"Commissioner General" means the Commissioner-General of the Tanzania Revenue Authority;
"Company" means a company as defined in the Companies Act *;
"Customs Laws" includes the East African Customs and Transfer Tax Management Act and any enactment relating to the customs or to the importation, exportation, or carriage coastwise, of goods, and any subsidiary legislation made under the authority of those Acts or those enactments;
"due date" means the date on which returns are due for lodgement or any tax, penalty, or other amount payable under this Act, or other date prescribed by the Commissioner, for lodgment of returns or payment of tax, penalty or any other amount;
"exempt supplies" means supplies of goods or services described in the Second Schedule to this Act;
"export" has the meaning assigned to it under First Schedule;
"gaming machine" means a machine in respect of which the following conditions are satisfied–
(a) it is constructed or adapted for playing a game of chance by means of it; and
(b) a player pays to play the machine (except where he has an opportunity to play without payment as the result of having previously played successfully), either by inserting a coin or token into the machine or in some other way; and
(c) the element of chance in the game is provided by means of the machine;
"Government" means the Government of the United Republic and includes Local Authorities in Mainland Tanzania;
"Government Agency" means any Ministry or Department of the Union Government, Tribunal, specially appointed Commission, extra-Ministerial organ, any Local Government Authority, any organisation designated by an establishing statute to be an agency of the Government or any organisation whose running costs are funded by the Government;
"import" means to bring, or to cause to be brought into Mainland Tanzania;
"input tax" has the meaning assigned to it under section 16;
"Minister" means the Minister responsible for finance;
"output tax" means the tax chargeable on a taxable supply;
"prescribed accounting period" means such accounting period as may be prescribed in section 26 or by regulations;
"proper officer" means any officer whose right or duty is to require the performance of, or to perform, the act referred to him under this Act;
"public officer" includes every officer vested with responsibilities of performing duties of a public nature, whether under the immediate control of the President or not, and includes an officer under the control of a department of Government local authority, or public corporation;
"recipient" in relation to any supply of goods or services, means the person to whom the supply is made;
"residential buildings" means dwellings built or used to accommodate persons for private and not business purposes;
"tax" means the Value Added Tax imposed by this Act;
"tax invoice" means a document issued in accordance with section 29 and regulations made under this Act;
"taxable person" means person registered or required to be registered under the provisions of this Act;
"taxable supplies" has the meaning assigned to it under section 5 and does not include exempt supplies;
"taxable turnover” means that part of the turnover of a business applicable to taxable supplies;
"taxable value" means the value of a supply as determined in accordance with section 13, 14 and 15;
"VAT" means the Value Added Tax imposed by this Act.
IMPOSITION OF AND LIABILITY TO VALUE ADDED TAX (ss 3-15)
(1) There shall be charged in accordance with the provisions of this Act, a tax known as the Value Added Tax on the supply of goods and services in Mainland Tanzania and on the importation of goods or services from any place outside Mainland Tanzania made on and after the 1st day of July, 1998.
(2) Where in respect of any taxable supply the tax has been paid in Tanzania Zanzibar pursuant to the law for the time being in force in Tanzania Zanzibar at the same rate as the rate applicable in Mainland Tanzania, the tax shall be deemed to have been paid on the taxable supply in accordance with the provisions of this Act and no tax shall be payable on its importation to Mainland Tanzania.
(3) Where in respect of any taxable supply, the tax has been paid in Tanzania Zanzibar at the rate lower than the rate applicable in Mainland Tanzania under this Act, the tax difference shall be deemed to have not been paid and shall be payable on its importation to Mainland Tanzania in accordance with the provisions of this Act.
(4) Where in respect of any taxable supply, the supply is made directly by a taxable person in Mainland Tanzania to a recipient in Tanzania Zanzibar, the Authority shall collect the tax on behalf of the Tanzania Zanzibar Treasury and remit it to the Tanzania Zanzibar Treasury.
(5) The provisions of subsection (4) shall apply to products manufactured in Tanzania Mainland only.
(1) The VAT shall be charged on any supply of goods or services in Mainland Tanzania where it is a taxable supply made by a taxable person in the course of or in furtherance of any business carried on by him.
(2) The VAT on a taxable supply of goods or services shall be payable by a taxable person at the end of a prescribed accounting period or at any time which the Commissioner may prescribe.
(3) The VAT on the importation of taxable goods or services from any place outside Mainland Tanzania shall be charged and payable in accordance with this Act and the procedures applicable under the Customs Laws for imported goods shall apply in respect of VAT imports.
(1) For the purpose of this Act, and unless otherwise provided in this Act or regulations made under it, "taxable supplies" means supply of goods or services made by a taxable person in the course or in furtherance of his business after the start of the VAT and includes–
(a) the acceptance of a wager or stake in any form of betting or gaming including lotteries, bingo, and gaming machines;
(b) the making of gifts or loans of goods;
(c) the leasing or letting of goods on hire;
(d) the appropriation of goods for personal use or consumption by the taxable person or by any other person;
(e) barter trade and exchange of goods.
(2) Where a person produces goods by processing or treating the goods of another person the supply shall be regarded as a supply of goods.
(3) The supply of any form of power, heat, or ventilation shall be regarded as a supply of goods.
(4) Unless otherwise provided in this Act or regulations made thereunder, anything which is not a supply of goods, but is done for a consideration, including the granting, assignment or surrender of all or part of any right is a supply of services.
(5) The Minister may make regulations providing for any description of transaction to be treated as–
(a) a supply of goods; or
(b) a supply of services; or
(c) neither a supply of goods nor a supply of services.
(a) goods are neither supplied by a person to another person nor incorporated in other goods produced in the course of the business of the first person but are used by that person for the purposes of furtherance of his business; or
(b) a person in the course of his business does anything for the purposes of furtherance of his business which is not a supply of services but, if done for a consideration, would be a supply of services,
the goods or services are regarded for the purposes of this Act as being both supplied to him for the purpose of the business and supplied by him in the course of that business.
(1) For the purposes of this Act the time goods or services are supplied, shall be when–
(a) goods are removed from the premises of the supplier or from other premises where the goods are under his control to the person to whom they are supplied, or goods are made available to the person to whom they are supplied;
(b) a tax invoice is issued in respect of the supply; or
(c) payment is received for all or part of the supply, whichever time shall be the earliest;
(d) service is rendered or performed.
(2) Where, in respect of any supply referred to in subsection (1), payment is received or a tax invoice is issued in respect of part of a supply, paragraph (b) or (c) of that subsection shall apply to that part of the supply, and the tax on it shall be paid accordingly.
(3) Where supplies are measured by meter the time of supply shall be the date of the first meter reading following the introduction of VAT and subsequently at the time of each meter reading, except to the extent that a tax invoice is issued or payment is made in respect of the supply.
(4) VAT on imported goods shall be charged and payable at the time custom duty, tax or levy is payable in accordance with the Customs Law unless prescribed otherwise in the regulations made by the Minister.
(1) This section shall apply for determining whether goods or services are supplied in Mainland Tanzania.
(2) Goods shall be regarded–
(a) as supplied in Mainland Tanzania if their supply does not involve their removal from or to Mainland Tanzania;
(b) as supplied in Mainland Tanzania if their supply involves their installation or assembly at a place in Mainland Tanzania to which they are removed;
(c) as supplied outside Mainland Tanzania if their supply involves their installation or assembly at a place outside Mainland Tanzania to which they are removed.
(3) For the purposes of subsection (2) where goods, in the course of their removal from a place in Mainland Tanzania to another place in Mainland Tanzania, leave and re-enter Mainland Tanzania, the removal shall not be regarded as a removal from Mainland Tanzania.
(4) Services shall be regarded as supplied in Mainland Tanzania if the supplier of the services–
(a) has a place of business in Mainland Tanzania and no place of business elsewhere;
(b) has no place of business in Mainland Tanzania or elsewhere but his usual place of residence is in Mainland Tanzania; or
(c) has places of business in Mainland Tanzania and elsewhere but the place of business most concerned with the supply of the services is the place of business in Mainland Tanzania.
(1) VAT shall be charged at the rate of twenty (20) per centum of the taxable value.
(2) The Minister may vary the rate of tax prescribed in subsection (1) under the procedures contained in the Provisional Collection of Taxes and Duties as in the Public Finance Act *.
(1) A supply of goods or services is zero-rating by virtue of this subsection if the supply is of a description specified in the First Schedule to this Act.
(2) Where a taxable person supplies goods or services and the supply is zero-rated no VAT shall be charged on the supply, but it shall in all other respects be treated as a taxable supply.
(1) A supply of goods or services is an exempt supply if it is of a description specified in the Second Schedule to this Act.
(2) The VAT is not chargeable on an exempt supply, and deduction or credit of input tax is not allowable on purchases made in respect of the exempt supply.
The persons and organisations listed in the Third Schedule to this Act shall be entitled to relief from VAT within the limits and conditions prescribed in that Schedule subject to procedures which may be determined by the Minister.
The Minister may after consultation with the Authority by order published in the Gazette, amend, vary, add to replace the Schedule to this Act.
(1) Subject to the provisions of this Act, the value on which VAT shall be chargeable on a taxable supply shall be–
(a) where a supply is for a monetary consideration the amount of the consideration excluding VAT; or
(b) where the supply is not for monetary consideration, or is only partly for such a consideration, the open market value excluding the VAT; or
(c) where the supply is not the only matter to which a consideration in monetary terms relates, the supply shall be deemed to be for such part of the consideration as is properly attributed to it.
(2) For the purposes of paragraph (b) of subsection (1) the “open market value” of supply means the value which such goods or services would fetch in the ordinary course of business between the supplier and recipient or any other person concerned in the transaction completely independent of each other, and shall be determined on the following assumptions, that is to say–
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