Capital: Dodoma
Population: (2022 est.) 61,791,000
Monetary Unit: Tanzanian shilling (TZS)
Language(s): Swahili, English
Tanzania, East African country situated just south of the Equator. Tanzania was formed as a sovereign state in 1964 through the union of the theretofore separate states of Tanganyika and Zanzibar. Mainland Tanganyika covers more than 99 percent of the combined territories’ total area.
The public holidays in Tanzania are as follows;
Date Holiday
- 1 Jan New Year’s Day
- 12 Jan Zanzibar Revolutionary Day
- 7 Apr Good Friday
- 7 Apr Karume Day
- 10 Apr Easter Monday
- 21 Apr Eid al-Fitr
- 22 Apr Eid al-Fitr Holiday
- 26 Apr Union Day
- 1 May Labour Day
- 28 Jun Eid al-Hajj
- 7 Jul Saba Saba
- 8 Aug Nane Nane
- 27 Sep Prophet Muhammad’s Birthday
- 14 Oct Nyerere Day
- 9 Dec Republic Day
- 25 Dec Christmas Day
- 26 Dec Boxing Day
An employee may be employed on probation for up to six months, although highly qualified individuals may be subject to a probationary period for up toa
There is no explicit provision in the Employment and Labor Relations Act 2004 about probation period. However, this act implicitly requires a probationary period of 6 months by saying that a worker with less than 6 months of employment may not bring an unfair termination claim against the employer.
12 months.
A worker is entitled to 28 days paid annual leave, inclusive of any public holidays that may fall during the period of leave.
Female workers are entitled to at least twelve weeks (84 days) of fully paid maternity leave or 100 consecutive days (in case of multiple births) within a leave cycle of 36 months. A worker is entitled to 84 days paid maternity leave within a leave cycle if the newborn dies within a year of birth.
Employment and Labor Relations Act 2004 provides for paid paternity leave of at least 3 days (in a leave cycle of 12 months) for a new father if this leave is taken within the 7 days of the birth of a child. The employer may require reasonable proof of birth of child prior to paying for paternity leave.
In accordance with Employment and Labor Relation Act 2004, every worker certified by a medical practitioner is entitled to paid sick leave (sickness benefit) for a period of 126 days in a leave cycle of 36 months.
Worker is entitled to the severance pay if he/she has completed at least a year of a service with the employer. Severance pay in Tanzania is equal to at least 7 days’ basic wage for each completed year of employment up to a maximum of ten years.
13th / 14th Month Pay: There is no statutory requirement to pay the 13th or the 14th month salary. Employees receive a generous leave of 28 days. There is no evidence that it is customary to give bonuses.
Foreign nationals wishing to be employed in Tanzania must obtain both a work permit and a residence permit. Work permits enable foreign nationals to work in Tanzania. The residence permits allow foreign nationals to live in Tanzania for specific purposes, including employment. The permits are issued initially for a period of up to two years and are renewable after two years up to a maximum period of 60 months. In exceptional cases, an extension can be granted beyond this period if the company proves it has an investment of great value to Tanzania.
The foreign assignee must apply for the work permit and residence permit separately before entering Tanzania, with the application for work permit being the basis for the residence permit. Work permit and residence permit applications must be accompanied by a succession plan for training a local to fill the position of the foreign national once the foreign national ceases to be employed in Tanzania.
Class A work permits accompanied by residence permits are available to foreign investors. Applicants for Class A work permits must be foreign nationals intending to enter or remain in Tanzania to engage and invest in any of the following:
- A trade, business or profession
- Agriculture or animal husbandry
- Mineral prospecting
- Manufacturing
- The applicant’s investment in Tanzania must be at least USD500,000.
- The applicant must have a strong financial background.
Class B work permits accompanied by a residence permit are available to foreign nationals engaged in prescribed professions, which include medical and health care professionals, experts in oil and gas, and university lecturers in science and mathematics.
Class C work permits accompanied by residence permits are available to foreign nationals with specific offers of employment in Tanzania. The applicant must be a member of a profession recognized by Tanzania, and the government must be satisfied that the applicant possesses the necessary qualifications and skills and that his or her employment will benefit the country.
All Class of work permits are valid for 2 years and can be renewed.
Residence Permit
To obtain a residence permit, after obtaining a work permit from the Ministry of Labor, a foreign national must file for review and approval a completed application pack with the Commissioner-General of Immigration. After the application is approved and payment of the government fee is made, the immigration office issues a residence permit. Applications are completed online and once approved, an applicant is notified regarding the collection of the permit.
The Immigration Department issued a public notice providing that, effective from 31 July 2019, it will stop accepting manual applications. A company that has its business registered with the Tanzania Investment Centre is granted a Certificate of Incentives, which entitles it to an automatic immigrant quota of up to five persons during the company’s start-up period.
Termination of employment can be initiated by any of the parties to a contract of employment. Lawful termination of employment under common law includes:
Termination Of Employment by Agreement: When the employer and employee agree to bring a contract of employment to an end in accordance with an agreement. For example, if there is a contract for a period of one year and the agreed period expires then the contract will obviously come to an end.
Automatic Termination: A contract of employment may be terminated automatically in circumstances such as death or loss of business of the employer.
Termination Of Employment by The Employee/Resignation: This happens when an employee due to material breach of the contract by the employer decides to resign from her employment.
Termination Of Employment by An Employer: An employer may also terminate the employment of an employee but there is a need to comply with the provisions of the law and contract relating to termination. Notice period lasts one week if it is served in one month of employment. After first month an employee working on daily basis should be served notice four days before termination and if an employee works on monthly basis, the notice period should be 28 days.
Worker is entitled to the severance pay if he/she has completed at least a year of a service with the employer. Severance pay in Tanzania is equal to at least 7 days’ basic wage for each completed year of employment up to a maximum of ten years.
According to the legislation, these benefits are required. These consist of the probationary term, yearly leave, federal holidays, sick leave, maternity leave, overtime pay, notice period, and severance compensation. Social Security payouts are statutory benefits as well.
According to the law, your normal working hours per day are 8 hours and these should not be more than 48 hours per week. By including the lunch and prayer time in hours of work, working hours should not be greater than 9 hours a day.
Overtime is compensated at 150% of the salary for anything over 48 hours or 200% for working on a designated holiday or rest day.
Notice period lasts one week if it is served in one month of employment. After first month an employee working on daily basis should be served notice four days before termination and if an employee works on monthly basis, the notice period should be 28 days.
Income tax is payable by individual’s resident in Tanzania (other than short-term residents) on their worldwide income. ‘Short-term residents’ and non-residents are taxable on income from a Tanzanian source. Personal services have a Tanzanian source if performed in Tanzania or performed outside Tanzania but where the payer is the government of Tanzania. The top marginal rate of tax for resident individuals is 30%. Non-resident individuals are subject to tax at a flat rate of 15% on employment income, which is final tax in Tanzania.
Resident rates
Taxable Income (TZS) Tax on Column 1 (TZS) Tax on Excess (%)
Over (column 1) Not over
0 to 270,000 – 0
270,000 to 520,000 – 8
520,000 to 760,000 20,000 20
760,000 to 1,000,000 68,000 25
1,000,000 and above 128,000 30
There is a state social security scheme known as the National Social Security Fund (NSSF), which every employer in the private sector must contribute to.
The employer’s contribution is 20% of the employee’s cash remuneration; however, the employer is entitled to recover up to half of this from the employee.
Similar contribution rates apply to the Public Service Social Security Fund (PSSSF) scheme, which is a special fund for the employer and employees in the public sector. In the PSSSF scheme, the contribution by employer and employee is 15% and 5%, respectively.
Employment Expenses: The only amount deductible from employment income is the employee’s statutory social security contribution (e.g., to the NSSF).
Personal Allowance: There are no personal allowances in Tanzania.
Business Deductions: Subject to certain exceptions, an individual may claim a deduction for expenses incurred wholly and exclusively in the production of income from business or investment.
The standard rate of VAT is 18%, but the export of goods and certain services is eligible for zero rating.
There are several sources of income that are subject to withholding taxes as follows:
Resident (%) Non-Resident (%)
Dividends: by resident companies to resident
companies controlling 25% of shares or more 5 N/A
From DSE listed companies 5 5
Other companies 10 10
Interest 10 10
Royalties 15 15
Technical and management service to mining
oil and gas companies 5 15
Rentals:
Land and buildings 10 15
Aircraft lease 10 10
Other Assets N/A 15