Receiving a tax audit notice from the Tanzania Revenue Authority (TRA) can be stressful, but an audit is a process, and businesses that prepare well usually come through it with far fewer adjustments. Use this checklist to get ready.
1. Read the notice carefully
- Which taxes are covered: income tax, VAT, PAYE, SDL, withholding tax or all of them?
- Which years or periods are under review?
- What documents are requested, and by when?
- Who at TRA is your contact?
Note every deadline straight away. If you need more time, ask for it in writing before the date passes.
2. Gather your records
- Audited financial statements and trial balances for each period
- General ledger, sales and purchase listings
- Filed tax returns and payment receipts
- EFD/VFD receipts and Z-reports
- Bank statements for all business accounts
- Payroll records, PAYE and SDL workings
- Withholding tax certificates issued and received
- Key contracts, loan agreements and related-party agreements
3. Reconcile before TRA does
Compare your tax returns with your financial statements and bank statements. Check that VAT sales match revenue, that payroll costs match PAYE returns, and that withholding tax was deducted where required. Any difference you find and can explain now is far easier to deal with than one TRA finds first.
4. Identify your risk areas
Be honest about weak spots: missing receipts, large cash expenses, transactions with related parties, or expenses that may not be deductible. Prepare a clear explanation and supporting documents for each.
5. Organise the process
- Appoint one person to handle all communication with the auditors.
- Provide documents in writing and keep a log of everything you hand over.
- Answer the question asked. Don’t volunteer guesses.
- Keep copies of all correspondence and meeting notes.
6. After the audit
Review the findings line by line. If you disagree with an assessment, you have the right to object, but there are strict time limits, so get advice as soon as you receive it. Finally, fix the root causes so the same issues don’t come up again.
The bottom line
Preparation is your best defence. Businesses with organised records, reconciled returns and a clear point of contact spend less time in audit and pay fewer surprise assessments. If an audit notice has arrived, involve an adviser early.
This article is general information, not tax or legal advice. Rules change and every business is different, so speak to an STAA advisor about your situation.