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14.5. Interest and Penalties

Delay in Filing Tax Returns

Delay in filing of tax return may attract a penalty of an amount equal to, the higher of, TZS 225,000 or 2.5% of unpaid tax.

Delay in Payment of Tax and Shortfall of Tax

Interest on late payment of tax is levied at the discount rate of Bank of Tanzania.

A tax shortfall in the return or tax adjustment may attract a penalty of 50% of the tax shortfall, if the understatement or omission is not willful. The penalty is increased to 75% of the tax shortfall if the understatement or omission is willful.

Failure to Obtain Registration

Effective 1 July 2020, a penalty of up to 500 currency points or imprisonment for a term not exceeding one year, or both may be charged on any person who is required to be registered or licensed under a tax law to perform any function and who fails to apply for such registration or licensing within the period prescribed.

Power to Waive Interest and Penalties

Effective 1 July 2022, the Minister for Finance upon recommendation by the Commissioner General has powers to waive interest or penalties, in whole or part, if there is a good cause for waiving such interest or penalties.