How to Manage Your Estimated Taxes When Starting Your Business in Tanzania
If you’re unsure about your tax obligations, it is important to ask to TRA Officer in charge or your Tax advisor to give you more clarification.
When you start a business in Tanzania, you have to know that paying taxes in the end of the year, you are supposed to be able to complete paying your estimated tax. The TRA breaks down its tax payments into four instalments per year in each after three months. March, July, September and December are tax payment months for businessmen if you can't afford to pay annually in one payment. But, how can we afford to pay our estimated taxes?
Understand the Tax System You’re In
To avoid underpaying and overpaying, it is important to know our tax system that we are as whether it is in presumptive tax (business paying a fixed amount based on turnover, annually) or an actual accounting tax system (business paying based on annual income)
Calculate Your Income
Don’t just guess your yearly income. It is important to for sales trends, market conditions, and seasonal demand and calculate the yearly income so that we to make our own decisions on how much we can so that we to spread our yearly tax payment instalments.
Set aside a Tax Percentage from Every Sale
It is important to have a habit of saving for tax after each profit from your sale, so that when you want to pay your tax, it will be easy for you not to draw money from your capital, leading to your business failing. It is important to name these savings apart from other savings.
Documented your sale
It is important to keep a record of each of your sales so that it can be used in a referral or to show proof when you are negotiating with the Tanzania Revenue Authority about your tax compliance.
Pay in Instalments
Since TRA allow you to pay in instalments, it is better to do so because paying in instalments can not destabilize your capital and make your operations fail and keep your cash flow healthy.
Adjust Your Estimates if Business Changes
If your income changes significantly during the year either up or down you can update your estimate with TRA. If your business rises up you have to make changes to avoid penalties, but if it goes down, adjust to get tax relief.
Consult a Tax Advisor or TRA Officer
If you’re unsure about your tax obligations, it is important to ask to TRA Officer in charge or your Tax advisor to give you more clarification. Also, you should consider seeking taxpayer education programs on the TRA Website or Social media so as to avoid tax-paying mistakes.
It is important to manage our estimated taxes by planning ahead, keeping records, and making regular payments. So as to prevent financial shocks, avoid penalties, and keep our business on good terms with TRA.