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Taxation Terms: Double Irish With A Dutch Sandwich

Definition of ‘Double Irish With A Dutch Sandwich’

A tax avoidance  technique employed by certain large corporations, involving the use of a  combination of Irish and Dutch subsidiary companies to shift profits to low or  no tax jurisdictions. The double Irish with a Dutch sandwich technique involves  sending profits first through one Irish company, then to a Dutch company and  finally to a second Irish company headquartered in a tax haven. This technique  has allowed certain corporations to dramatically reduce their overall corporate  tax rates.

The double  Irish with a Dutch sandwich technique is just one of a class of similar  international tax avoidance schemes. Each involves arranging transactions  between subsidiary companies to take advantage of the idiosyncrasies of varied  national tax codes. These techniques are most prominently used by tech companies  because these firms can easily shift large portions of profits to other  countries by assigning intellectual property rights to subsidiaries abroad.

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Tanzania Individual Income Tax Rates with effect from 1/7/2012

Resident Individual Income Tax Rates with effect  from 1/7/2012 as per Finance Bill of 2012
Monthly Income Tax Rate
Where total income does not exceed shs 170,000/= NIL
Where total income exceeds shs 170,000/= but does not exceed 360,000/= 14% of the amount in excess of shs 170,000/=
Where total income exceeds shs. 360,000/= but does not exceed 540,000/= 26,600/= plus 20% of the amount in excess of shs 360,000/=
Where total income exceeds 540,000/= but does not exceed 720,000/= Shs 62,600/= plus 25% of the amount in excess of shs 540,000/=
Where total income exceeds shs 720,000/=

Shs 107,600/= plus 30% of the amount in excess of shs 720,000/=

1.      The monthly income include basic salary, overtime, bonus, commission, allowances e.g. house allowance or transport allowance  and benefits in kind received in lieu of employment but after deducting the contribution to the approved retirement Fund (NSSF or PPF)      2. Threshold per annum: Income Shs 2,040,000 /=       3. Rates applicable to Zanzibar: The Minister may in consultation with the Minister responsible for finance of the Revolutionary Government of Zanzibar, determine the rates applicable in Tanzania Zanzibar 

 
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Posted by on July 31, 2012 in Finance,Taxation and Investment

 

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Tanzania LGAs Revenues: City Service Levy

Every March, June, September and December my company pays 0.3% of Total Turnover to the municipal for City service Levy.And All Companies operating in Tanzania should be doing the same.

Service Levy is one of the sources of Local Government Own Revenues. LGAs tax collections is the responsibility of the councils and is completely separated from the central government.

In District Councils Revenue collection is organised around 3 levels; Council Headquaters, the wards and Village levels.

City Service Levy is imposed to Corporates at a rate 0.3% of turnover payable quaterly.

My Question; Do all Companies operating in Tanzania pay City Service Levy? In Time? I bet most of them do not even know this tax exist.

 

 

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Kutoka Bungeni : Zitto on Government Budget

MFblog Inaendelea kuleta matukio yanayoendelea Mjini Dodoma katika kipindi hiki cha kikao cha Bunge cha bajeti. “ALL EYES ON DODOMA-BUNGENI”

Mh. Zitto Kabwe

Mh. Zitto Kabwe

WAZIRI Kivuli wa Fedha Kabwe Zitto amewasilisha bungeni bajeti mbadala ya Kambi ya Upinzani kwa mwaka wa fedha 2012/2013.
Zitto amebainisha kasoro nyingi zilizopo katika bajeti ya Serikali iliyowasilishwa bungeni Alhamisi iliyopita.
Bajeti ya Zitto ilitanguliwa na hotuba ya Msemaji  Mkuu wa Kambi ya Upinzani kuhusu Ofisi ya Rais – Mipango, Christina  Mughwai ambaye pia alibainisha alichokiita udhaifu wa Serikali  katika kuitekeleza mipango yake ya kiuchumi.
Zitto ambaye pia ni Naibu Kiongozi wa Upinzani Bungeni katika hotuba yake  alisema mapato ya Serikali yanaweza kuongezwa kwa Sh2.885 trilioni,  hivyo kupunguza utegemezi wa mikopo ya kibiashara ambayo imekuwa  ikiligharimu taifa kiasi kikubwa cha fedha. Vyanzo vya kodi na  kiasi cha fedha kwenye mabano alivyopendekeza ni marekebisho ya kodi za  misitu ukiwemo mkaa (Sh130.8 bilioni), kupunguza misamaha ya kodi,  kuzuia ukwepaji kodi na udanganyifu wa biashara ya nje (Sh742.74  bilioni), mauzo ya hisa za Serikali (Sh415.55 bilioni), Marekebisho ya  kodi Sekta ya Madini na asilimia 25 ya Mauzo ya Madini Nje (Sh578.36  bilioni) na Marekebisho ya Kodi na Usimamizi bora wa Mapato Kampuni za  Simu (Sh502.26 bilioni).

Mapendekezo mengine ni Marekebisho ya  Kodi ya Tozo ya Kuendeleza Stadi (Sh243.52 bilioni), mapato ya  wanyamapori (Sh61.64 bilioni), kuondoa msamaha wa ushuru wa mafuta kwa  kampuni za madini (Sh44.9 bilioni), Usimamizi wa mapato ya utalii  (Sh51.75 bilioni), Kuimarisha biashara Afrika Mashariki (Sh 114.15  bilioni).

Zitto alisema kama wapinzani wangekuwa madarakani  wangekusanya kiasi cha Sh15 bilioni sawa na ile ya Serikali, lakini  tofauti ni hatua ya kutenga asilimia 35 ya mapato ya ndani kwa ajili ya  utekelezaji wa miradi ya maendeleo na kupunguza utegemezi wa bajeti  kutoka asilimia 42.37 za Serikali hadi asilimia 21.3.

 

Amesema, Serikali haipaswi kuendelea kukopa, kwani taarifa rasmi za kibenki na  ukaguzi wa hesabu zinaonyesha kwamba deni hilo linakua kwa kasi tofauti  na maelezo ya Serikali kwamba linahimilika.

“Taarifa ya Mdhibiti na Mkaguzi Mkuu wa Hesabu za Serikali inaonyesha kuwa Deni la Taifa  linazidi kuongezeka kwa asilimia 38 kutoka Sh10.5 trilioni mwaka  2009/2010 hadi Sh14.4 trilioni 2010/2011. Kwa mujibu wa Waziri wa Fedha, Deni la Taifa limefikia Sh20.3 trilioni mpaka ilipofika mwezi Machi  mwaka 2012,”

alisema Zitto na kuongeza:       “Ukisoma taarifa ya Mwezi wa Mei 2012 ya Benki Kuu ya Tanzania, Deni la Taifa sasa limefikia Sh22 trillion. Suala hapa sio ustahmilivu wa Deni kama inavyodai Serikali,  bali ni kwamba tunakopa kufanyia nini?”

Alisema hesabu za bajeti ya Serikali ya 2012/13 inayopendekezwa zinaonyesha kwamba Serikali bado ina mpango wa kukopa kwa ajili ya kugharamia matumizi ya kawaida ambayo hayazalishi wala kutozwa kodi. “Hatutaki mikopo kwa ajili ya  matumizi ya kawaida ya posho, kusafiri, magari n.k. Tuchukue mikopo  kuwekeza kwenye miradi itakayokuza uchumi na kuzalisha kodi zaidi,”  alisema.

Kuhusu mfumuko wa bei, Zitto alikosoa hatua  zinazopendekezwa na Serikali kukabiliana nao, kwamba ni zile  zilizoshindwa katika mwaka wa fedha unaoishia Juni 30, mwaka huu. Alisema hatua hizo ambazo ni kutoa vibali kwa wafanyabiashara vya kuagiza  mchele na sukari bila kutoza kodi, haziwezi kusaidia kwa kuwa hatua kama hizo zilipochukuliwa awali zilisababisha bei ya bidhaa hizo kuongezeka. “Baada ya hatua hii bei ya sukari ilipanda kutoka Sh1,700 mpaka 2,800 kwenye  maeneo mengi nchini… Serikali inachukua hatua zile zile kwa tatizo lile  lile ikitegemea matokeo tofauti,” alisema Zitto.

Alirejea  pendekezo la mwaka jana kwa Serikali kutoa vivutio kwa wakulima wadogo  kuzalisha chakula kwa wingi akisema kuwa hatua hiyo pekee ndiyo  itapunguza mfumuko wa bei. “Hakuna mbadala wa kudhibiti mfumuko  wa bei zaidi ya kuongeza uzalishaji wa chakula na kuwekeza kwa wananchi  wetu.

Serikali inafikiria uzalishaji utaongezeka kwa kusaidia wakulima  wakubwa ambao watageuza wananchi wetu kuwa manamba na vibarua ndani ya  nchi yao,” alisema na kuongeza: “Tuwekeze kwa watu wetu vijijini ili waongeze uzalishaji na kwa kufanya hivyo mfumuko wa bei ya chakula  utakuwa historia. Hakuna mwarobaini wa kupanda kwa bei za vyakula  isipokuwa kilimo”.

MF: Well done Zitto; Tunaendelea Kufuatilia yanayoendelea Dodoma kwa Ukaribu.

 

 
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Posted by on June 19, 2012 in Tanzania News

 

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New VAT rate for Selected VAT Relieved Beneficiaries

Dodoma, Tanzania
Ministry of Finance has proposed an introduction of a new VAT rate of 10 per cent for selected VAT relieved beneficiaries.

This measure will compel all beneficiaries enjoying special relief under the third schedule of the Value Added Tax Act to pay VAT for their taxable supplies requirements at a reduced rate of 10 per cent instead of 18 per cent.
The Finance Minister, Dr Mgimwa said those who would be affected, among others, are private companies, individuals and TIC Certificate holders except those who are enjoying exemptions under the existing agreements.
 Ministry For Finance Dr. Mgimwa presenting the Budget in Dodoma
Furthermore, it will affect Non Governmental Organizations (NGOs) except those which are providing donations such as food supplies and medicaments to children and orphanage care centers and schools.
Also, Dr Mgimwa asked the house to approve, amending item 19 of the second schedule to the VAT Act in order to include “Electronic Fiscal Devices” in the list of exempt items.
“The measure intends to make the product affordable to the business community and encourage its use for the improvement of compliance,” the finance minister said.
A report dubbed one billion question: How Can Tanzania Stop Losing So Much Tax Revenue, estimates that Tanzania one of the poorest countries in the world is losing around 1 billion US dollars (1.6tr/-) in tax revenue annually mostly through tax evasion, capital flight and tax incentives.
Also, the minister wants to exempt VAT on various equipments (Compressed Natural Gas and Piped Natural Gas) that will be used for storage, transportation, and distribution of natural gas.
This measure is intended to promote the usage of natural gas in various sectors of the economy including motor vehicles, domestic and industrial use.
“The measure is also expected to preserve forests, reduce environmental degradation and encourage production of gas cookers in the country,’ Dr Mgimwa said.

Meanwhile, Minister for Finance and Economic Affairs said yesterday in a bid to implement effectively new finance bill 2012/13 all unproductive and unnecessary expenditures should be avoided.
Dr William Mgimwa said therefore it is important for the ministries, departments, regions and local authorities to give opportunities to the private sector to contribute in building the economy.
“…every citizen is called upon to participate effectively in the utilization of available opportunities by providing services and engaging in productive activities in order to increase income,” the minister told the Parliament when reading the budget.
He said this budget directs investment of national resources in few priority areas with a view to accelerate economic growth and reduction of poverty.
The minister caution follows the fact that in 2011/12 domestic revenues, including revenues from Local Authorities, were below target and donor commitment to budget basket is not delivered on time.

Data show that total collection up to this April reached 5.68tr/- equals to 80 per cent of estimates of collecting shillings 7.13tr/- for year 2011/12.

 
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Posted by on June 16, 2012 in Uncategorized

 

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Serikali ya Tanzania Yatangaza Bajeti ya mwaka 2012/2013

Dr. Mgimwa - Waziri Wa Fedha Tanzania akionyesha mkoba wa bajeti ya serikali kwa mwaka 2012/13

Dr. Mgimwa – Waziri Wa Fedha Tanzania akionyesha mkoba wa bajeti ya serikali kwa mwaka 2012/13

Dodoma, Tanzania:  SERIKALI imetangaza bajeti ya shilingi trilioni 15 kwa mwaka wa fedha 2012/2013.

Kwa mujibu wa Waziri wa Fedha, Dk William Mgimwa, pamoja na mambo mengine, bajeti hiyo imelenga kudhibiti mfumuko wa bei kwa kutangaza kutoa vibali vya kuingiza chakula kutoka nje, na kuwabana matajiri kwa kuongeza kodi ya bidhaa zisizokuwa za lazima.

Akisoma bajeti hiyo bungeni mjini Dodoma jana, Dk Mgimwa pia alitangaza kwamba Serikali imepanua wigo wa Kodi ya Mishahara (Paye) na sasa itawagusa wafanyakazi wenye kipato cha kuanzia Sh170,000 badala ya Sh135,000 ya awali.

Amesema, Serikali pia imerejesha mafunzo ya Jeshi la Kujenga Taifa (JKT) kwa kutenga Sh7 bilioni kwa ajili ya kuchukua vijana 5,000.

Dk Mgimwa amelieleza Bunge kuwa, Serikali imeongeza kodi za bidhaa mbalimbali, zikiwemo, bia, soda, sigara, juisi zinazoingizwa kutoka nje na kufuta msamaha wa ushuru wa bidhaa kwa magari kwa wote waliokuwa wananufaika na msamaha huo.

Alifafanua kwamba kodi ya vinywaji baridi imepanda kutoka Sh69 kwa lita hadi Sh83 na mvinyo unaotengenezwa kwa zabibu inayozalishwa nchini kwa kiwango kinachozidi asilimia 75, imeshuka kutoka Sh425 kwa lita hadi 145 kwa lita.

Wabunge wameelezwa kuwa, kodi ya mvinyo unaotengenezwa kwa zabibu inayozalishwa nje ya nchi kwa kiwango kinachozidi asilimia 25, imepanda kutoka Sh1,345 kwa lita hadi 1,614 kwa lita.

Dk Mgimwa amesema, kodi ya vinywaji vikali imepanda kutoka Sh1,993 kwa lita hadi Sh2,392 kwa lita, bia inayotengenezwa nchini kwa nafaka na ambayo haijaoteshwa, kodi yake imepanda kutoka Sh248 kwa lita hadi Sh310 kwa lita. Bia nyingine zote kodi imepanda kutoka Sh420 hadi Sh525 kwa lita.

Kuhusu ushuru wa bidhaa za sigara, Dk Mgimwa alisema, sigara zote zisizo na kichungi na zinazotengenezwa kwa tumbaku inayozalishwa nchini, kiwango cha angalau asilimia 75, kodi imepanda kutoka Sh6,820 hadi Sh 8,210 kwa sigara 1,000.

Alisema Sigara zenye kichungi na zinazotengenezwa kwa tumbaku inayopatikana nchini kwa kiwango cha angalau asilimia 75, kodi imepanda kutoka Sh16,114 hadi Sh19,410 na sigara nyingine zenye sifa tofauti na makundi hayo, kodi imepanda kutoka Sh29,264 hadi Sh35,117 kwa sigara 1,000.

Alisema tumbaku ambayo ipo tayari kutengenezwa sigara (cut filler) kodi yake imepanda kutoka Sh14,780 hadi Sh17,736 kwa bunda la sigara 1,000 wakati ushuru wa cigars unabaki kuwa asilimia 30.

Katika bajeti hiyo, Waziri Dk Mgimwa alisema muda wa maongezi (airtime) kwenye simu za mkononi umeongezeka kutoka asilimia 10 hadi 12.

Alisema lengo la hatua hiyo ni kuoanisha ushuru wa bidhaa unaotozwa na huduma hiyo katika nchi za Jumuiya ya Afrika ya Mashariki (EAC), kwa kipindi hiki ambacho nchi zipo katika Soko la Pamoja.

Alisema hatua hizo za ongezeko la ushuru wa bidhaa kwa pamoja, zinatarajiwa kuongeza mapato ya Serikali kwa kiasi cha Sh144,054.9 milioni.

Waziri huyo alipendekeza kufanyika marekebisho kwenye sheria husika za kodi ya matangazo ya Serikali yanayotoa msamaha wa kodi kwenye magari kwa walengwa mbalimbali ili kuweka ukomo wa umri wa miaka minane kwa magari hayo badala ya miaka 10.

Alisema magari yenye umri wa zaidi ya miaka minane yatatozwa ushuru wa bidhaa wa asilimia 20. Lengo la hatua hiyo ni kupunguza wimbi la uingizaji magari chakavu na kulinda mazingira.

Alitangaza pia marekebisho katika ushuru wa forodha, ikiwemo kufuta msamaha wa ushuru wa forodha katika vitu mbalimbali vikiwemo magari yenye ujazo wa CC 3000 huku pia ushuru wa forodha ukifutwa katika bidhaa nyingine nyingi muhimu.

Alisema katika kuhamasisha na kuchochea ukuaji wa sekta ya ufugaji wa nyuki, vifaa vinavyotumika katika ufugaji na kurina asali vimepewa msamaha wa ushuru wa forodha vinavyoingizwa kutoka nje ya nchi na wafugaji wa nyuki.

Alisema msamaha wa ushuru wa forodha kwenye migahawa ya majeshi ya ulinzi utaendelea kutolewa kwa kipindi cha mwaka mmoja.

Alisema kumefanyika marekebisho katika Sheria ya Forodha ya Jumuiya ya Afrika ya Mashariki ya mwaka 2004 ili kutoa msamaha wa ushuru wa forodha kwa wazalishaji wa vyakula vinavyotengenezwa mahsusi kwa lishe ya watoto wenye utapiamlo na watu wanaoishi na Virusi Vya Ukimwi.

Alisema kuwa katika Bajeti hiyo, pia wametoa msamaha wa ushuru wa forodha kwenye malighafi zinazotumika katika kutengeneza vifaa vya kufanyia uchunguzi wa magonjwa (medical diognastic kits) kwa kuwa vifaa hivyo hutozwa asilimia sifuri vinapoagizwa kutoka nje ya nchi.

Katika marekebisho hayo, utatolewa msamaha kwenye mitambo (machinery) na vipuri vyake vinavyotumika kwenye uchimbaji wa madini lakini hautahusisha vipuri vya magari vitakavyoagizwa na makampuni yanayojihusisha na uchimbaji wa madini.

Katika bajeti hiyo, pia umetolewa msamaha wa ushuru wa forodha kwenye vyuma vinavyowekwa kwenye kingo za barabara na lengo lake ni kutoa unafuu katika ujenzi wa miundombinu ya barabara.

Alisema ushuru wa forodha umepunguzwa kwa ving’amuzi kutoka asilimia 25 hadi asilimia sifuri ili kuwezesha mabadiliko katika teknolojia ya analogia na kwenda katika teknologia ya digitali.

Alisema katika Bajeti hiyo, pia ushuru wa ngano umeondolewa kuwa asilimia 0 badala ya asilimia 35.

Alisema Serikali pia imesamehe VAT katika mashine za kutolea stakabadhi (electronic fiscal devices), ili kupunguza bei yake na kuwezesha wafanyabiashara wengi kuwa nazo, kuhamasisha matumizi yake na hivyo, kuongeza mapato ya Serikali.

Katika eneo hilo, Serikali imeondoa VAT kwa vifaa mbalimbali vya kuhifadhia, kusafirisha na kusambaza gesi asilia ili kuongeza matumizi ya nishati hiyo katika sekta mbalimbali za kiuchumi, kwenye magari, majumbani na viwandani.

Wafanyabiashara ambao mapato yao hayazidi Sh3,000,000 hawatalipa kodi kuanzia Julai Mosi, mwaka huu. Dk Mgimwa alisema mpango huo umefanywa kulinda mapato ya Serikali.

Kabla ya msamaha huo, wafanyabiashara hao ambao mapato yao hayazidi Sh3,000,000 walikuwa wanalipa Sh35,000.

Marekebisho mengine ya kodi ya mapato ni kuwa wenye mapato kati ya Sh3 milioni –Sh7.5 milioni watalipa Sh100,000 badala ya Sh95,000.

Waziri Mgimwa alisema Bajeti hiyo imejielekeza katika Kukuza Pato la Taifa kwa asilimia 6.8 mwaka 2012 ikilinganishwa na ukuaji wa asilimia 6.4 mwaka 2011.

Malengo mengine ni kuimarisha miundombinu ya uchumi, ikijumuisha umeme, barabara, reli na bandari, kuongeza upatikanaji wa huduma za kifedha na kuongezeka kwa mapato ya ndani yatakayofikia uwiano na Pato la Taifa wa asilimia 18 kwa mwaka 2012/13 kulinganisha na mwelekeo wa asilimia 16.9 mwaka 2011/12.

Dk Mgimwa alitaja malengo mengine kuwa ni pamoja na kuendelea kudhibiti mfumuko wa bei ili urudi kwenye viwango vya tarakimu moja na kuwa na kiwango tengemavu cha ubadilishaji wa fedha kitakachotokana na mwenendo wa soko la fedha.

Malengo mengine ni kukuza mikopo kwa sekta binafsi kwa kiwango cha asilimia 20 ya Pato la Taifa ifikapo mwishoni mwa Juni 2013, sambamba na jitihada za kudhibiti mfumuko wa bei, kuboresha mazingira ya wafanyabiashara wadogo na wa kati, kulinda na kuendeleza mafanikio yaliyopatikana katika sekta za huduma za jamii, kuimarisha utawala bora na uwajibikaji na kujenga uwezo wa nchi kukabiliana na misukosuko ya kiuchumi na kifedha pamoja na kushiriki kwa ufanisi katika ushirikiano kikanda na kimataifa.

Kuhusu matumizi ya maendeleo, Waziri Mgimwa alisema itazingatia vipaumbele vya miundombinu ya umeme – mkazo ukiwa upatikanaji wake kwa kuongeza uzalishaji, usafirishaji na usambazaji na jumla Sh498.9 bilioni zimetengwa.

 

 
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Posted by on June 15, 2012 in Business News, Tanzania News

 

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Taxation of Benefit In kind – Tanzania Income Tax Law

Kuna Mtu aliniuliza swali, amepewa nyumba ya kuishi pamoja na gari vya kampuni. Kila mwezi wanamkata kodi inajumuishwa kwenye PAYE haelewi kwa nini;

Benefit In kind inatokea pale muajiri anapofanya malipo kwa mahitaji binafsi ya muajiriwa kwa kumpatia bidhaa au huduma. (sio kwa kumpa pesa). Mfano ni Muajiri kumpatia muajiriwa Nyumba, kulipia ada za watoto wa muajiriwa,gari au kumpatia bidhaa au huduma bure au kwa bei ya chini.

Kuthaminisha kodi ya benefit in kind.

kwa ujumla kiwango cha benefit in kind kinapatikana kwa kulinganisha ile huduma uliyopatiwa na thamani yake kwenye soko. Kwa maana nyingine kama muajiri asingempa nyumba angeilipia kiasi gani?

Sheria ya Kodi tanzania inatoa maelekezo ya jumla ya kiasi cha pesa inayotakiwa kukatwa kodi kwa kupewa gari, Nyumba na Mikopo nafuu inayotokewa na kampuni kwa wafanyakazi wake.

Mfano wa Kuthaminisha Gari:  hii inategemea na saizi ya injini na umri wa gari. kiasi cha malipo kwa mwaka unagawa kwa miezi 12 na kukiongeza kwenye Taxable income of employment ya mwezi. ANGALIA CHATI CHINI.

Natumaini rafiki  umepata mwanga kwa ile kodi unayokatwa ya gari! kwa mifano zaidi ya jinsi ya kupata thamani ya riba kwa mikopo na nyumba tembelea tovuti ya TRA.

SAIZI YA INJINI YA GARI

KIASI   CHA MALIPO KWA MWAKA

XXXXXXXXXXXXXXXXXXXXXXXXX GARI CHINI YA MIAKA MITANO GARI ZAIDI YA MIAKA MITANO
ISIYOZIDI 1000CC SHS. 250,000 SHS. 125,000
ZAIDI YA 1000CC LAKINI ISIYOZIDI 2000CC SHS. 500,000 SHS. 250,000
ZAIDI YA 2000CC LAKINI ISIYOZIDI 3000CC SHS. 1,000,000 SHS. 500,000 
JUU YA 3000CC SHS. 1,500,000 SHS. 750,000
 

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