Revealed: 80pc of house owners don’t pay taxes in Tanzania

What you need to know:

According to him, about 80 per cent of house owners do not pay taxes because they are not formally identified

Dar es Salaam. Landlords and landladies capitalise on the absence of a real estate regular to avoid paying taxes, the minister for Lands, Housing and Human Settlements Development, Mr William Lukuvi, says.

According to him, about 80 per cent of house owners do not pay taxes because they are not formally identified.

“We are finalising a bill on the Real Estate Regulatory Authority to monitor rental prices and direct landlords and landladies to duly pay taxes monthly,” he recently.

“The new law will make the charging of rents yearly or half-yearly illegal. The government won’t allow that unless the tenant himself or herself willingly pays the rent under such an arrangement.”

The envisaged law will enable the government to know the exact number of houses in supply and control prices for buying and renting.

The government understands that renting is normally handled by unregistered agents. That makes it difficult for the government to know the exact number of rented houses. The government will ensure every landlord or landlady pays tax and adopts a National Housing Corporation (NHC) system for tenants to pay rent monthly.

Mr Lukuvi directed NHC to continue constructing houses for sale and maintaining its system of charging tenants reasonably every month.

Demand for houses is high in urban areas. However, the rental market is informal and subsistent.

Moreover, customers have to pay in advance.

It is estimated that Tanzania was has a shortage of 3 million housing units. NHC data indicates annual demand for houses in urban areas is 200,000 units worth $12 billion.