The Income Tax Act 2004 Cap 332 (i) Reduce individual income tax rate from 14% to 13% for employees RESIDENT INDIVIDUAL INCOME TAX RATES WITH EFFECT FROM 1/7/2013
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MONTHLY TAXABLE INCOME
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Where income does not exceed Tshs. 170,000/=
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NIL
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Where total income exceeds Tshs. 170,000/= but does not exceed Tshs. 360,000/=
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13% of the amount in excess of Tshs. 170,000/=
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Where total income exceeds Tshs. 360,000/= but does not exceed Tshs. 540,000/=
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Tshs. 24,700/= plus 20% of the amount in excess of Tshs 360,000/=
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Where total income exceeds Tshs. 540,000/= but does not exceed Tshs. 720,000/=
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Tshs. 60,700/= plus 25% of the amount in excess of Tshs 540,000/=
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Where total income exceeds Tshs. 720,000/=
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Tshs. 105,700/=plus 30% of the amount in excess of Tshs 720 ,000/=
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Kwa maana hiyo mwaka huu 2014/2015 itakuwa 12% kwa kiwango cha mwanzo for an amount in excess of Tshs 170,000 tofauti na tpaul alivyo sema hapo juu. Cha mhimu ambacho TUCTA wanatakiwa kuelewa/ hawajui ni kuwa tatzo si rates tu (1% up 30% or what), tatzo ni rates na categories/groups za range of Income level (ziko chache na haziko wide spread off). Nafahamu kabisa kuwa TRA wanalijua hili ila wamepuuzia tu kwasababu PAYE ni kodi rahisi sana kwao kukusanya kuliko kodi za Majengo, minada, Mauzo ya ardhi (Nyumba), nk ila wanapenda CHEAP OR EASY THINGS AT THE EXPENSE OF OTHERS. Kinacho paswa ni kuwa na group na 6 up 10 mf. Group 6: Tshs 0.8 up 1M; tax Tshs 25,000 plus 20% of an amount in excess of Tsh 0.8M [Tshs 25,000 + (ie. 0.2*200,000)]=Tshs 45,000, Group 7, 8, 9, nk.
Tujiulize mfano mtu anae pokea mshahara wa Tshs 6,945,750/= kwa kodi ya sasa . Anapaswa kulipa Tshs ngapi kama kodi?
Chukua category ya 5, kama ilivyo kwenye jedwali hapo juu (Make ndio group anapo paswa kuwa)
Tshs 105,700/= + 30% of the amount in excess of Tshs 720,000/=
Hivyo tofauti ni Tshs 6,945,750 - 720,000 = Tshs6,225,750.
Tax = Tshs 105,700 + [30%*6,225,750]
= Tshs 105,700 + 1,867,725
= Tshs 1,973,425/= (as tax)
Total amount to be received as Income = Tshs 6,945,750 -,1973,425 = Tshs 4,972,325/=
This (Tshs 1,973,425) is alot of money to be taxed on Resident Individual's personal Income, where there in no Administration/collection costs incurred by TRA (as orgnisations are supposed to remit this amount to TRA's offices within 30 days).
Huyu mtu bado analipa kodi ya VAT when he/she purchases sugar, clothes, car, fridges, TV set, etc to mention a few.
The emphasis should be on having lower tax rates with a range of categories/groups to be spread to the Individuals' Income groups. This is because individual persons DO HAVE allowable expenses at their family level as Parastatals and Companies DO but individual persons are NOT allowed to deduct them as allowable expenses in their salaries.
KWA MFANYAKAZI AMBAE HUJUI KODI ANAYO LIPA, UNAWEZA TUMIA JEDWALI HILO HAPO KUJUU, KUFAHAMU KODI UNAYOLIPA. ILA CHANGE YA 1% (i.e. 12%) HAS INSIGINFICANT/IRRELEVANT CHANGE IN THE TAXABLE INCOME OF AN INDIVIDUAL.