Summary note

• The required permits
• Imposed taxes on employment
• Social security contributions.

Overview

Foreigners working in Zanzibar are employed and given a specific foreign contract. Section 36 (1) of the Employment Act provides for employment of a foreigner. However, for a foreigner to be hired, it should be taken into consideration that there is no local Zanzibari/ Tanzanian with the expertise to do the job and the position must be a management position.

The minimum salary of a foreign employee is USD 1000(United States Dollars One Thousand) provided under section 57 of the employment Act

The required permits.

The employed foreigner is required to have a Resident Permit Class B’ and a working class. This is as provided under Section 20(1) of the Immigration Act “A person, other than prohibited immigrant, who has been offered a specified employment in Tanzania and the Director is satisfied that he possesses the qualification or skill necessary for that employment and that his employment will be of benefit to Tanzania, may, if the Director thinks fit, be granted a Class B permit subject to condition that the employer shall, before entry into Tanzania of that person and his dependents, if any, or before he is granted the permit, give the security Residence permit for the permit and for any other purposes as the Director may determine”. Resident Permit Class B’ is issued to experts who are employed to work in Tanzania. The fee for resident permit class B’ is USD 2050(United States Dollars Two thousand and fifty).

Also, Section 36 (3) of the Employment Act “A work permit shall, except for persons exempted under the provisions of this Act, be issued upon payment of fees prescribed by the Minister by notice in the Gazette.” Provides for requirement of employees work Permit.

 The first Grant Work permit is charged USD 1000 (United states Dollars One Thousand) by the Labour Commission.It is also mandatory to obtain approval for the permits from the regulator of the business.

Imposed taxes on employment

The employee is subjected to Pay as You Earn (PAYE) tax. This is a withholding tax on taxable incomes of employees. An employer is required by law to deduct income tax from an employee’s taxable salary or wages as provided under section 81 of the Income Tax Act[5] “A resident employer who makes a payment that is to be included in calculating the chargeable income of an employee from the employment shall withhold income tax from the payment at the rate provided for in paragraphs 1 and 4(a) of the First Schedule”. A foreign employee is required to pay 15% of the gross income from employment.

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Social security contributions

The employee is also required to contribute 7% of the gross salary as social security fund collected by ZSSF. This is a mandatory contribution by law.

Conclusion.

A foreign employee is required to comply with the laws in Zanzibar by having an employment contact, both resident and work permit that allows him to live and work and also contribute to the mandatory taxes imposed on employment which are pay as you earn (PAYE) and contributions to ZSSF.

Disclaimer: This article is authored by Jill Kato, an Associate from Rive & Co, a new and innovating law firm as a result of the partnership between ABC Attorneys, Stallion Attorneys and Sepia Attorneys, built on the foundation of trust, credibility, and novelty, offering expert legal solutions.  This Article is for informational purposes only and should not be construed as legal advice. It is recommended to consult with a qualified legal professional for advice specific to your situation.