Withholding Tax on Rent Tanzania: What Tenants Withhold, File and Pay to TRA

Withholding tax on rent in Tanzania is a duty that falls on the tenant, not the landlord. A business paying rent keeps back part of the payment, sends it to the Tanzania Revenue Authority (TRA) and pays the rest to the landlord.

This guide is for the Mainland tenant who must withhold, with a separate section on Zanzibar. It also explains what a landlord should expect when the money arrives short. The landlord's own income tax on rent, including deductions and the annual return, is covered in our separate guide to rental income tax in Tanzania, and we do not repeat it here.

What the law says

The charge sits in the Income Tax Act, Cap. 332 R.E. 2023 (ITA), in the copy published by TRA. Section 2 of that copy states that the Act applies to Mainland Tanzania as well as Tanzania Zanzibar. Section 3 defines rent as any payment made by the lessee under a lease of a tangible asset. Section 9(2) counts rent as investment income of the landlord.

The withholding machinery is in Part VII of the Act. In the R.E. 2023 arrangement of sections, the provisions are:

• Section 105: withholding from investment returns, which covers rent. In the older 2004 numbering this was section 82.
• Section 109: statements and payments of tax withheld (formerly section 84).
• Section 110: withholding certificates (formerly section 85).
• Section 111: final withholding payments (formerly section 86).
• First Schedule, paragraph 4: the rates.

We confirmed these headings, and the cross-references to section 111 in sections 3 and 4(7), in the TRA copy of the R.E. 2023 text. Our copy did not render the operative subsections of Part VII, so the detailed wording described below comes from TRA guidance and named professional sources. Those points are flagged under Figures to confirm.

Two further rules matter. Section 27(2) measures a payment without reduction for tax withheld, so the 10% applies to the gross rent agreed. Section 28(2) says an amount in a foreign currency is converted at the Bank of Tanzania exchange rate applying when the amount is taken into account.

The penalties, interest and recovery rules are not in the ITA. They sit in the Tax Administration Act, Cap. 438 (TAA), which governs all tax laws. See our guide to TRA penalties and interest.

Who is affected

The duty falls on the person who pays the rent, called the withholding agent. TRA's withholding tax page describes the agent as a person required to withhold income tax from a payment made to a withholdee. The landlord is the withholdee.

Tenants that must withhold include:

• Companies, branches, partnerships and other entities that rent offices, shops, warehouses, factories, yards or land.
• Sole traders who rent business premises in the conduct of their business.
• NGOs, schools, hospitals and similar bodies that rent premises, even when their own income is exempt.
• Contractors that rent construction equipment or machinery for a project, since 1 July 2024.

The rule for individuals has moved twice. The Finance Act 2022 removed the exclusion for individuals, so tenants of houses and flats were expected to withhold. RSM Tanzania's Finance Bill 2022 alert reported that the Bill repealed the whole exemption. The Finance Act 2023 then reversed this. EY's Finance Act 2023 alert records the removal of rent paid by individuals for residential premises from the withholding obligation, from 1 July 2023.

KPMG's analysis of the Finance Act 2023 reads the change as exempting individuals unless they pay in the conduct of business. It adds that individuals paying rent for commercial buildings still need to withhold. An individual renting a family home therefore does not withhold. An individual paying for a shop or office should withhold.

TRA continues to enforce the duty. The Guardian reported on 17 January 2025 that a TRA officer in Kariakoo told tenants to withhold and remit 10% of rent.

What are the withholding tax rates on rent?

The rates come from paragraph 4 of the First Schedule to the ITA. The table uses Zatra's fee register, which records rates stated at 26 September 2026. Where the sources disagree, we say so.

The resident rate of 10% on land and buildings is settled: every source agrees. The non-resident rate on land and buildings is not settled in the published sources. TRA's Taxes and Duties at a Glance 2025/2026 lists 20%, and the Habib Advisory 2025/2026 tax guide follows it. TRA's own withholding page shows 10% for rental income for commercial purposes. PwC's Worldwide Tax Summaries, last reviewed on 9 September 2026, also shows 10%. A tenant paying a foreign landlord should confirm the rate with its TRA tax office before the first payment and keep the reply on file.

Construction equipment was added by the Finance Act 2024, Act No. 6 of 2024. Section 39 of that Act inserted the words "construction equipment or machinery" into the rent provision and defined the term. PKF Eastern Africa notes that it covers items such as scaffolding and tools rented by contractors, from 1 July 2024.

A tax treaty can reduce the rate for a non-resident landlord in some cases. Check the treaty and obtain the landlord's certificate of residence first. Our guide to Tanzania's double tax treaties explains the process.

Is the withholding final for the landlord?

Whether the tax withheld is the landlord's last word on that income depends on who the landlord is. Section 111 of the ITA lists the final withholding payments. TRA's withholding page explains the difference: on a final withholding the withholdee cannot claim a tax credit, while on a non-final withholding it can.

• Resident individual landlord, not in business. PwC states that rent on land and buildings paid to a resident individual is a final withholding payment, unless the rent is received in the course of conducting a business. The 10% is then the full tax on that rent.
• Resident company, or individual renting as a business. The withholding is non-final. The landlord includes the gross rent in its return and claims the tax withheld as a credit against its income tax.
• Non-resident landlord. The general rule in section 111 treats payments to non-residents as final, unless they are connected with a permanent establishment in Tanzania. We could not read the subsection text, so confirm the position for each foreign landlord.
• Construction equipment lessors. PKF describes the 10% as non-final.

For the tenant, the deduction is the same either way. The landlord needs the certificate to claim a credit or to show that its tax is settled.

When must the tenant pay and file?

TRA's withholding page states that every withholding agent shall pay to the Commissioner within seven days after the end of each calendar month. TRA's 2025/2026 booklet gives the same date, the 7th day of the following month, for withholding tax, PAYE and SDL.

The clock runs from the month in which the rent is paid, not the month the rent covers. Rent paid on 28 November is due to TRA by 7 December, even if it covers December to February.

The filing has changed. BDO East Africa reports that, from July 2021, withholding agents file a monthly withholding statement through e-filing. It replaced the old six-monthly statement. The statement is due on the same date as the payment, within seven days after the month ends.

The tenant files and pays through the TRA taxpayer portal, against a GePG control number.

The withholding certificate

Section 110 of the ITA requires a withholding certificate. TRA's page says certificates are obtained under Tax Payment in the taxpayer portal and can be printed after payment. PwC notes that TRA's IDRAS system generates the certificate and that the online certificate is used to claim credit. Send each certificate to the landlord with the payment advice.

What happens if the tenant does not withhold?

A tenant that pays gross rent without withholding does not escape the tax. The statute map in Zatra's legal desk notes that failing to withhold makes the payer liable for the tax, not the payee. The tenant then pays the 10% out of its own pocket, plus interest and penalties, and must try to recover the tax from the landlord.

The TAA adds further cost. A withholding agent cannot recover interest it owes for the failure from the landlord.

One currency point is TZS 20,000 (register NEW-02-05). Unpaid withholding tax also blocks a tax clearance certificate, which the tenant needs to renew its business licence.

A tenant facing an assessment for unwithheld rent can object within 30 days of service of the decision. The objection is admitted only after a deposit of the greater of the tax not in dispute or one third of the assessed tax (register NEW-02-19). Prosecution, seizure and contested appeals belong with an advocate.

Worked example: a TZS 15,000,000 a month office lease paid quarterly

A Dar es Salaam trading company leases offices at TZS 15,000,000 a month plus VAT. The landlord is a resident company registered for VAT. The lease requires rent quarterly in advance, and the company pays on 2 January 2027 for January to March.

The withholding is calculated on the rent, not on the VAT. VAT is a separate tax the landlord charges and pays to TRA on its own return by the 20th of the following month (register F0245). The tenant claims the TZS 8,100,000 as input tax if it is VAT-registered and holds a valid EFD receipt or tax invoice.

The landlord receives TZS 48,600,000 and a certificate for TZS 4,500,000. As a resident company, it reports TZS 45,000,000 of rent in its income and credits the TZS 4,500,000 against its income tax.

Two variations change the cash flow. If the tenant is an appointed VAT withholding agent, it also withholds 6% of the rent as VAT and pays the landlord the balance of the VAT (register F0233). On these figures that is TZS 2,700,000 to TRA within 10 days after the tax period and TZS 5,400,000 of VAT to the landlord. Our guide to withholding VAT explains who is appointed.

How do USD rents and exchange rates work?

Section 28(2) of the ITA converts any foreign currency amount at the Bank of Tanzania exchange rate applying when the amount is taken into account. For a tenant, that is the date the rent is paid. TRA's portal accepts withholding tax in shillings.

New leases should not be priced in dollars at all. The Finance Act 2024 added section 26(2) to the Bank of Tanzania Act, and the Foreign Exchange Use Regulations, GN 198 of 2025, followed. Clyde & Co reports that the Regulations took effect on 28 March 2025 and require goods and services to be priced and paid in TZS. Existing foreign currency contracts had 12 months to be amended.

FB Attorneys states that leasing houses or apartments falls within the Regulations. It notes that the listed exceptions include leases with embassies and international organisations. A lease still priced in dollars after the transition should go to an advocate.

Worked example: a USD 4,000 lease being settled in shillings

A company owes arrears of USD 4,000 for one month under a lease signed before the Regulations. It pays on 2 November 2026. For illustration only, we assume a Bank of Tanzania rate of TZS 2,450 to USD 1 on that date. This is not a published rate. Use the rate the Bank of Tanzania quotes for the actual payment date.

• Rent in shillings: USD 4,000 x 2,450 = TZS 9,800,000.
• Withholding at 10%: TZS 980,000, due to TRA by 7 December 2026.
• Net rent to the landlord: TZS 8,820,000, plus VAT if the landlord is registered.

For a non-resident landlord at the disputed 20% rate, the withholding would be TZS 1,960,000.

Does VAT apply to rent, and on what amount?

On the Mainland, commercial rent is a taxable supply at the standard rate of 18% (register F0239) when the landlord is registered for VAT. A landlord must register once taxable turnover reaches TZS 200 million in 12 months or TZS 100 million in six months (register F0242). Our guide to TIN and VAT registration covers the process.

Residential rent is treated differently. PwC lists as exempt a supply of the right to occupy and reside in residential premises. A company renting a flat for a manager pays no VAT on it but still withholds 10%.

Service charges, advance rent and other edge cases

Rent paid in advance

Withholding applies when rent is paid. A tenant paying six or twelve months upfront withholds 10% of the whole sum in that month. A refundable security deposit is not rent until the landlord applies it to rent.

Service charges

Because rent means any payment by the lessee under a lease, a service charge paid to the landlord under the lease is likely to be rent. A separate cleaning or security contract with another provider is a service payment instead. That may fall under the service fee withholding covered in our guide to withholding tax on local payments.

Government and exempt landlords

Some landlords are exempt from income tax, such as certain government bodies. Whether a tenant must still withhold depends on the exclusions in section 105(2), which we could not read. Ask the landlord for its exemption letter or TRA confirmation before paying gross.

Ground rent and property rates

Land rent to the Ministry of Lands and council property rates are not lease rent and are not withheld. Our guide to land rent and property rates sets them out.

Stamp duty on the lease and other charges that are not withholding

The lease itself attracts stamp duty of 1% of the annual reserved rent, for a lease of any duration (register F0265). The Finance Act 2026 widened the definition of lease to include movable property. TRA's booklet states that stamp duty is payable within 30 days of execution.

In the worked example, the annual reserved rent is TZS 180,000,000, so stamp duty would be TZS 1,800,000. Whether the reserved rent includes VAT should be confirmed with TRA. Our guide to stamp duty in Tanzania covers lodging, valuation and late stamping.

What about Zanzibar?

Income tax is a Union matter. Section 2 of the ITA applies the Act to Tanzania Zanzibar, so a tenant in Zanzibar withholds under the same section 105 and the same First Schedule rates. Income tax is administered by TRA, not ZRA, and we understand that Zanzibar tenants file and pay through the same TRA portal; confirm with the TRA Zanzibar office. Section 99 of the ITA deals with credit between the Mainland and Zanzibar.

VAT and stamp duty are different. They are administered by the Zanzibar Revenue Authority (ZRA) under Zanzibar laws. Zanzibar VAT is charged at 15% with a registration threshold of TZS 100 million a year (register F0246). PwC notes that Zanzibar VAT is administered under separate but similar legislation.

ZRA's corporate plan lists stamp duty among the taxes it collects. We could not verify the Zanzibar stamp duty rate on leases, or whether Zanzibar exempts residential rent from VAT. Both are listed under Figures to confirm.

Tenant and landlord duties at a glance

A landlord paid net rent without a certificate should ask for it in writing, or it may lose the credit.

What to do now

1. List every lease. Record each landlord, asset, rent, currency, payment frequency and whether the landlord is resident, an individual or a company.
2. Confirm the rate for each landlord. Use 10% for resident landlords of land and buildings, and confirm in writing with TRA for any non-resident landlord.
3. Check the lease currency. Any lease still priced in dollars needs review under GN 198 of 2025 by an advocate.
4. Set the payment calendar. Tie the withholding to the date rent is paid, with TRA payment by the 7th of the next month.
5. Separate rent from VAT and services. Withhold on the rent, account for VAT separately and treat separately contracted services under the service fee rules.
6. Issue certificates. Print each certificate from the portal and send it to the landlord within the month.
7. Fix past gaps. If rent was paid gross, quantify the tax and interest and consider a voluntary disclosure before TRA raises an assessment.
8. Stamp the lease. Pay stamp duty at 1% of annual reserved rent within 30 days of signing.

Key dates and deadlines

• 7th of each month: pay withholding tax and file the monthly statement for rent paid in the previous month.
• 20th of each month: the landlord's VAT return and payment (register F0245).
• 10 days after the tax period: remittance by a VAT withholding agent (register F0233).
• 30 days after signing: stamp duty on a new or renewed lease.
• 30 days after service: objection to an assessment for unwithheld tax (register NEW-02-19).

How Zatra helps

Zatra reviews leases, computes the tax, and prepares the monthly statement and certificates on the TRA portal. We also quantify past exposure and prepare voluntary disclosures. Our tax and regulatory compliance service handles the monthly cycle. Our TRA audit and dispute service handles assessments and objections, and accounting and bookkeeping keeps the ledger reconciled.

Two cost buckets stay separate. Government charges, such as tax, interest and stamp duty, are paid at the official rate to TRA against its GePG control number. They are kept apart from Zatra's professional fee, which we quote in advance. Government fees are listed in our government fees guide.

Disputes before the Tax Revenue Appeals Board, prosecution, seizure and formal legal opinions on lease currency go to an advocate, and Zatra has one on the team. Zatra prepares and files; it does not decide or guarantee any authority's outcome.

Sources and status

Accurate as at 14 November 2026.

• Income Tax Act, Cap. 332 R.E. 2023. Tanzania Revenue Authority, 2025 copy. Accessed 14 Nov 2026.
• Withholding tax. Tanzania Revenue Authority, web page, 2026. Accessed 14 Nov 2026.
• Taxes and Duties at a Glance 2025/2026. Tanzania Revenue Authority, July 2025. Accessed 14 Nov 2026.
• Finance Act 2024, Act No. 6 of 2024. Tanzania Revenue Authority copy, 30 June 2024. Accessed 14 Nov 2026.
• Tanzania: Corporate withholding taxes. PwC Worldwide Tax Summaries, reviewed 9 September 2026. Accessed 14 Nov 2026.
• Tanzania: Individual income determination. PwC Worldwide Tax Summaries, reviewed 9 September 2026. Accessed 14 Nov 2026.
• Tanzania: Corporate other taxes. PwC Worldwide Tax Summaries, reviewed 9 September 2026. Accessed 14 Nov 2026.
• Tanzania: Finance Act 2023 changes. KPMG, 14 July 2023. Accessed 14 Nov 2026.
• Finance Act 2023 tax alert. EY Tanzania, 7 July 2023. Accessed 14 Nov 2026.
• Withholding tax on rental of construction equipment or machinery. PKF Eastern Africa, 2024. Accessed 14 Nov 2026.
• Tanzania Tax Insight. BDO East Africa, 2021. Accessed 14 Nov 2026.
• Tanzania's new regulations on foreign currency usage. Clyde & Co, 31 March 2025. Accessed 14 Nov 2026.
• Transacting in foreign currency. FB Attorneys, 15 March 2026. Accessed 14 Nov 2026.
• Tenants retold to withhold, remit 10pc of rent to TRA. The Guardian (IPP Media), 17 January 2025. Accessed 14 Nov 2026.

Figures to confirm before you act

• The non-resident rate on rent for land and buildings: 20% in TRA's 2025/2026 booklet against 10% on TRA's web page, PwC and register F0214.
• The non-resident rates for aircraft lease, motor vehicle hire and other assets, where TRA's booklet (15%) and PwC (10%) differ.
• The operative wording of ITA sections 105, 109, 110 and 111 in the R.E. 2023 text, including the exclusion for individuals and for exempt landlords, which we did not read in full.
• Whether rent paid to a non-resident landlord without a permanent establishment is a final withholding payment.
• The statutory interest rate for the fourth quarter of 2026; register NEW-02-09 gives 8.75% for the third quarter.
• Whether the annual reserved rent for stamp duty includes VAT, and the late stamping penalty.
• The Zanzibar stamp duty rate on leases and whether Zanzibar VAT exempts residential rent.
• How the TRA Zanzibar office handles rent withholding statements and payments for Zanzibar tenants.
• Any extension granted by the Minister of Finance for foreign currency leases under GN 198 of 2025.

This article is general information based on official sources available at the date of publication. It is not legal, tax or financial advice. Laws and notices change. Verify with the issuing authority or consult Zatra before acting.