If you are in business and you aren't an investor, then taxes are something that happens to you. There's not much you can do about your tax liability, apart from complaining about the 20% (or more) profit squeezes.

However, that is not the same story for investors. For an investor, tax planning is part of your toolbox for accumulating wealth. You can create income that's taxed at a lower rate — or isn't taxed at all. Likewise, you can lower on your tax income by generating deductions or credits. For the most part you can choose which year your income will be taxable, depending on which works out better for you. However, be careful - consult Tanzania Revenue Authority to make sure that you aren't liable for taxes.

There are limits to all these possibilities of course. But too often the limiting factor is the knowledge of the investor. If you don't know the rules then you won't be able to use them to your advantage, luckily you do. You don't even have to become an expert, but you do have to be able to identify situations where help is needed, then seek that help here.

Taxes All Year Long
Investors need to think about taxes all year long. Many people who aren't investors can get by with thinking about taxes once each year, when they file their tax returns (although the government has yet to issue tax returns). As an investor, you may not be able to afford that luxury. You should to pay attention to:

• Tax planning. When you make an investment decision, you should always consider the tax consequences. In the end, it's your after tax return on investment that really matters. Should you sell a short-term asset or a long-term asset? You need to keep taxes in mind to be able to invest wisely - this way you avoid losing more money than you anticipated.

• Record keeping. It's important to record the pertinent facts about each investment/transaction. You need this information to make good choices on your next operation, and you'll need it when the time comes to prepare your income tax return (once again, if available). If you plan to deduct your expenses (e.g. KAFOI Online Internet Advertising, etc.) you will need to keep track of those as well.

• Estimated tax payments. If your investment activity is successful it will obviously generate income. When the amount of investment income becomes large enough you'll need to make an estimated tax payment. Know what the figure will be so that you know what to expect.

Nevertheless, if you aren't an investor and instead just a businessman/woman, then you do experience taxes - and depending on what industry you are in, maybe a lot of them. Hotels in Tanzania have over six different types of taxes, whereas Non-government Organizations enjoy 100% VAT/Tax Exception. As you started your business (in receiving your "Business Title" or certification) you should have also received a Tax Account/Code specifically for your business. If you do not have one or cannot find it, then you better contact the Tanzanian Revenue Authority to compile another one for you, although it will cost you money in penalties, the fee is far less than having them find out.

Tanzania uses an indirect tax system, which means that the tax is paid when goods or services are purchased, also know as Value Added Tax (VAT). There are other types of taxes, namely, Direct Taxes, which means that the tax comes from people's income (such as income tax or corporation tax), and there is also, Property Tax, which mainly comes from inheritance, capital gains and from council tax.

Practically every country in the world has taxes, it is a way for governments to raise money to increase revenues. These revenues are then used to improve or build social services in the country, such as roads, healthcare, charities, education, and more. In a lot of cases 25% of the government's total revenue comes from taxes.

Our last advice: 'pay your taxes', preferably on time.