Keeping business records for TRA: a guide for small businesses
Good records make tax time easier and protect you in a TRA audit. What to keep, for how long, how EFD receipts fit in and simple habits that help.
Many small businesses in Tanzania only think about records when a tax return is due or a Tanzania Revenue Authority (TRA) officer visits. By then it can be hard to prove what you earned and spent. Good records are not just a legal requirement; they also show you whether your business is really making money. This guide explains which business records to keep for TRA, how long to keep them, how EFD receipts work and simple habits that make record-keeping easy.
Why business records matter
Records protect you if TRA questions your tax return, because they prove your income and expenses. Without them, TRA may estimate your income, which can lead to a higher tax bill. Records also help you run the business: they show which products sell, which costs are rising and whether you can afford to hire or expand. Banks and lenders usually ask for records before giving a business loan.
What records to keep
At a minimum, keep a record of all sales and other income, all business expenses, money you take out of the business for yourself, and stock bought and sold. Keep the documents that back these up: sales receipts and invoices, purchase receipts, bank and mobile money statements, payroll records if you have staff, and contracts such as leases. If your business has assets like vehicles or machines, keep the purchase documents too.
How long to keep records
Tanzania's tax laws require records to be kept for at least five years after the end of the year they relate to, and longer if there is an ongoing dispute. Paper records fade and get lost, so photographing or scanning receipts and saving them in a safe place is a sensible habit. Back up digital records in more than one place.
EFD receipts
Businesses above certain thresholds, and all VAT-registered businesses, must issue receipts from an Electronic Fiscal Device (EFD) or approved electronic system for every sale. These receipts send sales data to TRA, so your declared income should match them. As a buyer, ask for an EFD receipt for business purchases; without one you may not be able to claim the expense or input VAT. Our guide to registering a business in Tanzania covers getting a TIN first.
Simple record-keeping habits
Keep business and personal money separate, ideally with a dedicated bank or mobile money account for the business. Write down cash sales at the end of every day rather than trying to remember them later. Once a month, add up your income and expenses and compare them with your bank and mobile money statements; this catches mistakes early and gives you a clear view of profit.
A simple notebook or spreadsheet is enough for many small traders. As the business grows, accounting software or a part-time bookkeeper can save time and reduce errors. If you are unsure which taxes apply to you, TRA offices and their taxpayer education services can help, as can a registered tax consultant.
A simple monthly record example
A small shop records sales of TZS 4,500,000 in a month, stock purchases of TZS 3,000,000, rent of TZS 300,000 and other costs of TZS 200,000. Its profit for the month is TZS 1,000,000. If the owner also took TZS 600,000 for personal use, that is a drawing, not a business expense, and it does not reduce profit. Separating drawings from expenses is one of the most common corrections TRA makes.
Records and payroll
If you employ staff, keep records of salaries, PAYE deducted and pension contributions paid. Our Tanzania PAYE calculator helps you work out the deductions, and our guide to PAYE in Tanzania explains the bands.
Frequently asked questions
How long must I keep business records in Tanzania?
At least five years after the end of the year they relate to.
Do I need an EFD machine?
Businesses above certain thresholds and all VAT-registered businesses must issue EFD or approved electronic receipts.
Can I keep records on my phone?
Yes. Photographing receipts and using a spreadsheet or app is fine, as long as records are complete and backed up.
Sources
This article is general information, not financial advice.