17 2.1.4 Individual Income Taxes
These refer to; § Tax charged to non-corporate payers who include sole traders (proprietors) taxed at progressive individual income tax rates; and
§ Pay As You Earn (PAYE) which is a tax whereby a certain amount of money from employee’s gross emoluments is levied.

2.1.5 Taxation of Small Traders With and Without Complete Records It is levied income tax on all small traders who operate mostly in the informal sector with and without their business records based on their annual business turnover.

2.1.6 Gains or Profits from Employment This is an income that an employee earns from an employment in the form of salary, which is payable on daily, weekly or monthly. It includes payments of wages, salary, payment in lieu of leave, fees, commissions, bonus and gratuities, payments of any personal allowance, payments providing any discharge or reimbursement of expenditure incurred by an individual or by an associate of an individual payment for an individual’s agreement to any conditions of the employment. Contributions made on behalf of the employee to retirement funds and retirement payments made directly to employees. Redundancy and other payments for loss or termination of employment relating to the year of payment and any benefits in kind.

2.1.7 Qualification of Benefits in Kind Benefits which an employer may decide to give to the employee. These include: - a) Motor Vehicle Benefit: Where an employee is provided with motor vehicle by an employer for personal use in return for employment rendered and the employer incurs all necessary expenses to maintain the vehicle then this is a taxable benefit to the employee quantified annually.

b) Subsidized Loans: It is a loan to an employee provided by employer at no interest or at an interest rate that is below the statutory interest rate.

c) Provision of Housing: It is the value of housing provided to an employee by the employer which is taxable benefit and is included in the employee’s monthly pay. The value of housing is calculated as the market value of renting that housing or 15 percent of the rest of the employee’s income from employment, whichever is less.

18 2.1.8 Gains or Profit from Business It is a person’s income from a business during a year. The following amounts derived from business are regarded as gains or profits and they are taxable: - § Service fees; § Incomings from trading stock (sales of business stocks); § Gains from sale of business assets or liabilities; § Sale of depreciable assets; § Amounts derived as consideration for accepting a restriction on the capacity to conduct the business; and § Gifts and other payments received by the person in respect of a business.

2.1.9 Gains from Investment Income from investment include: - § Any dividend, distribution of a trust, gains from life insurance, gains from an interest in an unapproved retirement fund, interest, natural resources payment, rent, or royalty; § Net gains from realization of investment assets (Capital gains); and
§ Amounts derived as a consideration for accepting a restriction on the capacity to conduct the investment.

2.1.10 Payment of Tax by Installments § Single Instalments: Income tax payable by way of single instalment in the case of realization of interest in land or buildings is the amount of tax paid once before the Titles are transferred from one person to another. § A rate of 10 and 20 percent of the gain for a resident and non-resident person respectively, is required to pay income tax by single instalment. Payment by single instalment also applies in case of non-resident person who receives a payment in conducting a business of land, sea, or air transport or chartered (without having a domestic permanent establishment in Tanzania) which evolves the carriage of passengers who embarked or cargo, mail or other moveable tangible assets that are embarked in Tanzania and which are not for transit, the payer is required to withhold 5 percent of the gross payments before the proper before the proper vessel, vehicle or aircraft is allowed to leave from Tanzania.

§ Quarterly Instalments: It is a payment required from business or investments during the year of income at the end of each three-month period commencing at the beginning of the year of income and a final instalment on the last day of the year of the income.

19 2.2 Indirect Taxes (Consumption Taxes) These are taxes based on consumption. Categorically they are divided into consumption taxes, other domestic taxes and international trade taxes. Examples of such taxes are like Import Duty, Excise Duty and Value Added Tax (VAT). By definition the legal incidence of the tax falls on the trader who act as a collection agent of the Government while the effective incidence falls on the final consumer of goods or service who eventually pays the tax. The categories of indirect taxes among others are Value Added Tax (VAT), Excise Duty and Import Duty.

2.2.1 Value-Added Tax (VAT) It is a consumption tax charged on all taxable goods and services at a standard rate of 18 percent. It is a multi-stage tax levied on the difference between a commodity’s price before taxes and its production cost at each stage of production and distribution up to the retail stage. It is also levied on taxable imports made by person whether or not registered for VAT.

2.2.2 Excise Duty (Local) It is levied on certain locally manufactured goods and services such as soft drinks, beer, wines, spirit, mobile phone services, plastic shopping bags, satellite television services, cigarettes and petroleum products.

2.2.3 Import Duty Is levied at fixed rate on the Cost, Insurance and Freight (CIF) value of goods imported into the country. It is based on the value of goods, the weight, dimensions, or other criteria of the item such as its size.

2.3 Value Added Tax on Imports It is levied on all goods and services imported into the country unless such goods and services are specifically exempted under the VAT law. The importation of taxable supply from any place outside Mainland Tanzania shall be charged VAT and normal Customs Laws and procedures shall apply.

2.4 Other Taxes 2.4.1 Skills and Development Levy (SDL) This tax is based on the total gross emoluments paid by an employer to employees. Among other gross emoluments include salary, wage, leave, pay, payment in lieu of leave and subsistence allowance etc.

2.4.2 Stamp Duty Refers to the duty paid on certain legal instruments/transactions, affidavit, conveyance and lease Agreements. The duty is based on the consideration applicable on non-

20 business persons when issuing a receipt whenever they sale their privately owned assets/properties.

2.4.3 Airport Service Charge

Refers to charges levied on passengers who board an aircraft at any airport in Tanzania.

2.4.4 Port Service Charge Refers to charges levied on passengers who travel by a passenger shipping vessels at any port in Tanzania.

2.4.5 Motor Vehicle Registration and Transfer Tax Refers to charges levied when a person is registering/transfer fee a motor vehicle and motor cycle.

2.4.6 Motor Vehicle License Fee Refers to fee charged on first registration of a motor vehicle are based on size of the engine. It is not applied to motorcycle or tricycle.

2.5 Tax Incentives Refers to government measure that is intended to encourage individuals and businesses to spend money or to save money by reducing the amount of tax that they have to pay.

2.5.1 Import Duty Drawback It is a scheme, which allows exporters to claim refund of import duties paid on raw materials and other inputs used in the production of goods that are exported from Tanzania. This scheme is used as a measure to remove fiscal obstacles to export development. It includes inputs used in production process that do not form part of the qualified product e.g. catalysts and some other chemical agents.

2.5.2 Withholding Tax on Dividends and Interest It refers to taxes paid by investors with incentive certificates.

2.5.3 Export Processing Zone (EPZ) It is an area where goods processed or manufactured are exempted from import duty and other taxes.

2.6 Local Government Taxes Refers to taxes and fees collected by local government authority such as, Local Government Authorities collect taxes, fees and levies in: Property Tax, Service Levy, Hotel Levy or Guest House Levy, Slaughtering Fees, Billboards and Sign Fees, Market Fees, Trading License Fees, and Liquor License Fees.

21 2.6.1 Property Tax Is an annual or semi-annual charge levied by a local government and paid by the owners of real estate within its jurisdiction. Some properties like museums, places of worships, aerodromes and land used for sporting purposes, properties of charitable and educational institutions are exempted from property tax.

2.6.2 Service Levy Refer to a local tax levied on corporate and no corporate entities. It charged on the value of goods manufactured by local industries. It is mainly for urban local authorities and it replaces the industrial levy. All corporate entities, which pay the service levy, are exempted from paying agricultural produce levy.

22 PART TWO: SOCIAL SERVICES SECTOR CHAPTER THREE POPULATION AND DEMOGRAPHIC STATISTICS

3.0 Introduction Demography is concerned with the description, analysis and understanding of population phenomena. It can therefore be extended to include and to cover the social, economic, historical and political characteristics of the population and related demographic process. Also, the demographic statistics seek mathematical and statistical descriptions of human population.

3.1 Fertility Fertility refers to the number of live births women would have during their reproductive age (15-49 years). It is measured by using some of the following indicators

3.1.1 Crude Birth Rate (CBR)
It is the number of live births in a calendar year per 1,000 mid-year population.

000 ,1 ×

population year Current year calender a in births of Number CBR

3.1.2 General Fertility Rate (GFR)
It is the number of live births per 1,000 women in the 15-49 years age group in a given year.

000 ,1 49 15 × −

years women of population year Mid year calender a in births of Number GFR

3.1.3 Age-Specific Fertility Rate (ASFR) It is the number of live births to women in the specific age group per 1,000 women in that specific age group in a given year. For example:

6789(;<=;>) = @ABCDE GH IJKD CJELℎN LG OGBDP QRDS 20 −24 @ABCDE GH OGBDP QRDS 20 −24 ×1,000

3.1.4 Total Fertility Rate (TFR) It is the average number of children that a woman would have by the time she ended childbearing if she were to pass through all her childbearing years conforming to the

23 age-specific fertility rates of a given year. In other words, it is the number of children a woman would have from age (15-49) if she were to bear children at the prevailing age- specific rates.
TFR can be represented symbolically as follows;

∑

∑

=

⎟⎟ ⎠ ⎞ ⎜⎜ ⎝ ⎛ 49 15 49 15 X X x W n x B n n x nf n TFR

Where,

n = Number of children,

x = Child bearing age of women from 15 to 49 years,
xf = Fertility rate at age x,

x n B Births at age x,

x nW women at age x

3.1.5 Gross Reproduction Rate (GRR) It is the average number of daughters that would be born to a woman (or a group of women) during her lifetime if she passed through her childbearing years conforming to the age-specific fertility rates of a given year. This rate is like the TFR except that it counts only daughters and literally measures "reproduction" that is a woman reproducing herself by having a daughter. GRR is therefore given as;

( ) birth at ratio sex TFR GRR +

1

The GRR is usually expressed as a rate per woman rather than a rate per 1,000 women, it may be expressed symbolically by the formula
xf GRR ∑

Where,

= xf Fertility rate at age x specific for sex (i.e. female births to females
or male births to males

= ∑ Over all ages in the reproductive life span