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5.6. Qualification of Specific Income Categories for Tax Purposes


The term “dividend” means a distribution of profits or gains by an entity to the extent it is not a repayment of capital.

The term ‘distribution by an entity’ means:

  • A payment made by the entity to any of its members, in any capacity to the extent that the amount of the payment exceeds the contribution by the member in return for the entity's payment;
  • Any re-investment of dividends which enhances the value of shares;
  • Any capitalization of profits; and
  • Includes payment made by the entity to any of its members on cancellation, redemption, or surrender of a membership interest in the entity, including as a result of the liquidation of the entity or as a result of the entity purchasing a membership interest in itself.


The term “interest” includes payment for the use of money and includes payment made or accrued under a debt obligation that is not a repayment of capital, as well as any gain realized by way of a discount, premium, swap payment, or similar payment.

Interest also includes payments made under a finance lease or in acquiring an asset under an installment sale, other than an installment sale that provides for commercial periodic interest payable on the balance outstanding and a repayment of capital under a loan made by the lessor or seller to the lessee or buyer, as the case requires.

Effective 1 July 2021, interest income derived from government bonds having tenure of more than 3 years, issued and listed on the Dar es Salaam Stock Exchange is exempt from corporate tax.


The term “royalties” includes any payment made by the lessee under a lease of an intangible asset and includes payment for:

  • The use of, or the right to use, copyright, patent, design, model, plan, secret formula or process, or trademark;
  • The supply of know-how, including information concerning industrial, commercial, or scientific equipment or experience;
  • The use of, or right to use, a cinematography film, videotape, sound recording, or any other like medium;
  • The use of, or right to use, industrial, commercial, or scientific equipment;
  • The supply of assistance ancillary to a matter referred above; and
  • A total or partial forbearance with respect to a matter referred to above.

However, the term royalty excludes a natural resource payment.

Service Fees

The term “service fees” includes any payment for any service with a source in Tanzania, and includes payments for any theatrical or musical performance, sports or acrobatic exhibition, or any other entertainment performed. It also includes management, professional and technical service fees provided to mining, oil and gas companies.

The term technical “services” in respect of mining operations means services in respect of earthmoving, engineering, and construction and includes geological, geotechnical and metallurgical services, seismic survey, data interpretation, drilling or any other like services.