Tanzania Presumptive Tax: Rates, Who Qualifies and the New TZS 200 Million Ceiling

If you run a small shop, salon or wholesale business in Tanzania and your turnover crept past TZS 100 million this year, you used to have to drop presumptive tax and start keeping audited accounts. That's changed. Individual traders can now use presumptive tax all the way up to TZS 200 million in annual turnover.

The trade-off: the tax rate on the top band rose from 3.5% to 4%. Both changes have applied since the Finance Act 2026 took effect on 1 July 2026.

Brand-new businesses also get a 12-month tax holiday if the Commissioner approves their application. All figures below are checked against the Tanzania Revenue Authority's (TRA) own current rate table as of November 2026.

What is presumptive tax and who qualifies

Presumptive tax is a flat percentage of your business turnover, not your profit. TRA created it so small traders don't need an accountant or audited books just to file taxes. You qualify if, per TRA's own rules:

1. You're a resident individual for the tax year.
2. All your income comes from a business with a source in Tanzania (no salary or investment income mixed in).
3. Your annual business turnover doesn't exceed TZS 200 million.
4. You haven't chosen to opt out and be assessed on actual profit instead.

If you tick all four, TRA taxes you on turnover using the bands below. If you don't, for example you also earn a salary, or your turnover is higher, you're assessed the normal way: keep books, work out your profit, and pay tax on that.

One group is excluded regardless of turnover: people providing professional services, running a construction business, or working as trainers. TRA's official rate guide specifically keeps these out of presumptive tax, so if that's you, you pay on actual profit no matter how small your turnover is.

If you're still choosing what to sell, our guide to the best businesses to start in Tanzania has real setup costs for six options, each with turnover you can check against these bands.

Tanzania presumptive tax rates for 2026

Source: TRA, Income tax for individuals, checked November 2026. The TZS 200 million ceiling and the 4% top rate take effect under the Finance Act 2026, in force from 1 July 2026 (EY tax alert; Clyde & Co).

Once your turnover passes TZS 11 million, there's no "no records" option: TRA requires you to issue a proper fiscal receipt for every sale from that point, and the flat 4% applies to the whole band.

What changed on 1 July 2026

• The ceiling doubled. The upper turnover limit for presumptive tax went from TZS 100 million to TZS 200 million. A trader turning over, say, TZS 150 million who previously had to register as a "medium taxpayer," keep audited financial statements and pay tax on profit can now stay on presumptive tax and pay a flat 4% of turnover instead.
• The top rate rose. Turnover above TZS 11 million now attracts 4%, up from 3.5% before the Act. If your turnover sits in that band, your bill went up even though nothing else about your business changed.
• The audit threshold moved with it. Individuals no longer need audited financial statements until their turnover passes TZS 200 million, up from the old TZS 100 million cut-off (PwC Tanzania tax summary, reviewed September 2026). That's the real saving for traders in the TZS 100-200 million range: no accountant's audit fee every year, on top of a lower, predictable tax bill.
• New businesses get a 12-month break. If you're registering for a TIN to start a business for the first time, and you expect turnover between TZS 4 million and TZS 200 million, you can apply to pay nil tax for your first 12 months. The Commissioner has to be satisfied you'll operate entirely under presumptive tax for that period, and you'll need to submit a statutory declaration, a description of the business and a projected turnover statement. Thirty days before the 12 months end, you must also declare your actual turnover for that period (TRA, Income tax for individuals, as above).

How presumptive tax is calculated: a worked example

Say Amina runs a hardware shop in Mwanza and keeps proper sales records. Her turnover for the year comes to TZS 60,000,000, well inside the 11-200 million band.

That's it. Amina doesn't need to work out her profit, deduct expenses or hire an accountant to file. She pays TZS 2,400,000 for the year and that's her full income tax liability on the business.

Now take Joseph, who runs a small electronics wholesale business in Arusha. His turnover sits above the old ceiling but under the new one, so July 2026 changed what he owes and how he files:

On a turnover of TZS 150,000,000, Joseph's presumptive bill is a flat TZS 6,000,000. Whether that beats his old profit-based bill depends on his margins, but he's dropped the audit fee and the paperwork either way.

If your turnover falls in the lower bands and you don't keep records, the fixed amounts apply instead. A trader turning over TZS 6,000,000 with no bookkeeping pays a flat TZS 100,000 for the year; one turning over TZS 10,000,000 pays a flat TZS 250,000.

Should you keep records or not

Below TZS 11 million, TRA gives you a choice: a fixed, no-questions-asked amount if you don't keep records, or a slightly lower turnover-based charge if you do. Run the numbers for your own turnover before you decide. Here's what a trader with TZS 6,000,000 in turnover pays either way:

Keeping even basic sales records usually costs you less once your turnover rises past the middle of each band.

Above TZS 11 million you don't get the choice. The 4% applies to your full turnover, and you must issue fiscal receipts.

Mistakes that cost small traders money

• Mixing business and salary income. If you earn a salary anywhere, you don't qualify for presumptive tax at all; your business income gets taxed on profit instead. Don't assume presumptive tax applies just because your shop's turnover is under TZS 200 million.
• Assuming the rate is still 3.5%. Plenty of older guides and even some accountants are still quoting the pre-July 2026 rate. If you're above TZS 11 million turnover, it's 4% now.
• Not applying for the new-business holiday in time. The relief isn't automatic. You have to apply when you register for your TIN and get the Commissioner's approval before you start trading, not after your first year is already over.
• Forgetting to declare turnover at the end of a tax-holiday year. If you got the 12-month relief, you still have to file a turnover declaration 30 days before the period ends. Miss it and TRA can treat you as if you never had the relief.
• Ignoring the professional-services exclusion. Consultants, construction contractors and trainers can't use presumptive tax regardless of how small their turnover is. If that's your business, budget for profit-based tax and proper books from day one.

If you haven't registered the business itself yet, our guide to registering with BRELA covers the cost and the online steps before you get to tax. And if you're comparing this against what you'd pay as an employee rather than a trader, our breakdown of PAYE tax bands in Tanzania shows how employment income is taxed differently from business turnover. For more on running a business in the country, see our Tanzania hub.

Frequently asked questions

What is the presumptive tax rate in Tanzania for 2026?

It depends on your turnover band. Up to TZS 4 million is nil. Between TZS 4 million and TZS 11 million, you pay a fixed amount or a small percentage above the band's starting point, depending on whether you keep records. Above TZS 11 million and up to the new TZS 200 million ceiling, it's a flat 4% of turnover.

Who is eligible for presumptive tax in Tanzania?

Resident individuals whose entire income comes from a Tanzanian business, with turnover of TZS 200 million or less, who haven't opted to be assessed on profit instead. Professionals, construction businesses and trainers can't use presumptive tax at all, whatever their turnover.

How do I calculate presumptive tax on my turnover?

Work out your annual turnover, find which band it falls in, then apply that band's rate. Above TZS 11 million, multiply your turnover by 4%. For example, TZS 50,000,000 in turnover gives you TZS 2,000,000 in presumptive tax for the year.

Can a new business get a tax holiday under the 2026 rules?

Yes. If you're registering for your first TIN and expect turnover between TZS 4 million and TZS 200 million, you can apply for 12 months of nil tax, subject to the Commissioner's approval and a declaration of your projected turnover.

What happens if my turnover goes above TZS 200 million?

You no longer qualify for presumptive tax. You'll need to keep full accounts, get audited financial statements prepared, and pay tax on your actual annual profit using the standard individual income tax rules instead. You'll usually also need to register for VAT once you cross that same TZS 200 million line; see our guide to VAT in Tanzania for the rate and how registration works.

Do I still need to issue receipts under presumptive tax?

Yes, once your turnover reaches TZS 11 million you must issue a fiscal receipt for every sale. Below that, a manual receipt with the buyer's details is accepted.