TAX LAW UPDATE: THE TANZANIA REVENUE AUTHORITY DIRECTS THAT TAX IDENTIFICATION NUMBER IS MANDATORY TO ALL EMPLOYEES

• All employers are directed to include employee’s Tax Identification Number (TIN) upon filing returns for Pay as You Earn (PAYE)
• Employers are required to put TIN numbers for all employees who had already been registered for TIN and show the amount remitted to TRA
• Employees who do not have TIN are required to apply for the same before 31 December, 2020

Content of the Notice

On 18^th August 2020, the Tanzania Revenue Authority issued a public notice informing all employers to comply with online system for filing tax returns (See our article posted on the 25^th August 2020). The Online system has been introduced by TRA on 6^th August, 2020. The essence of this directive is sourced from the provisions of Section 22 of Tax Administration Act, [Cap 438 R.E 2019]. The said provision requires all tax payers to have TIN numbers.

Commencement

The notice states that the directives given shall take effect from 18^th August, 2020.

Compliance Issues

All employers and employees are required to comply with the following directives;

1. That the employers are now required to remit PAYE of each employee through the current introduced online tax return filing system.
2. Each employee must now have a TIN number for purposes of filing PAYE returns.
3. For employees who had already been registered with TIN prior to the introduction of the current online filing, employers are required to provide their TIN in the returns and show the amount that has been remitted to TRA.
4. All Employees who do not have a TIN are required to apply online using their National ID number (NIN) or NIDA card number. For those with neither a NIN nor NIDA card can still register for TIN by physically visiting TRA offices for taking of their fingerprints and photo.
5. Amid application for TIN for employees who do not have, employers can temporarily use TIN No. 999 999 999 for purposes of remitting PAYE.

 

Remarks on the Notice

The Tax Law Department at Breakthrough Attorneys commends the initiatives taken by TRA to integrate the income tax payment system with individuals’ tax identity. This will ensure a seamless taxing system with a transparent collection for all taxing components; be it, withholding agent (employer) and the taxpayer, in this case the employee. It is a requirement of the law that all tax payers (including employees) must be TIN registered. The introduction of online system of filing returns and this notice with regards to compliance on reveals a move towards modernization of revenue collection system that will ensure efficiency, compliance, and easy regulation.