I have been admitted to a certain university in Tanzania and have obtained a loan from the Loans Board, which lends money to students. I am yet to receive my 1st payment. I wish to know whether the said amounts will be subjected to any taxes and, if so, at what rate.
16 January 2012
Assuming that the loan is in furtherance of full-time education, you will not be subject to taxation. This is made clear in paragraph (i) of the Second schedule of the Income Tax Act of Tanzania. The exemption is only in respect of tuition or fees for full-time instruction at an educational institution. Should you change your status to a part-time student, taxes may apply depending on the facts of the change of status.