Tanzania Tax Alert: Qualification for Tax Deduction

Section 11(2) of the Income Tax Act, 2004 carries a broad and non-restrictive language that there shall be deducted all expenditure incurred during the year of income by the person wholly and exclusively in the production of income from the business or investment. Although there is no definition provided under the law, over the years tax practices and cases have been able to establish key tests to frame this principle.

The results are that the term “wholly” refers to quantum of money and “exclusively” refers to the purpose.