How to Invoice Properly in Tanzania (2026)
An invoice is not paperwork you do after the work. In Tanzania it is the document that starts a tax clock, proves a debt, and decides whether your customer can claim back the VAT you charged them. Get it wrong and three separate things go badly: the Tanzania Revenue Authority treats you as having made a supply you have not been paid for, your customer quietly loses money and blames you, and a court later struggles to see what you were owed.
This guide covers what belongs on a Tanzanian invoice, when to issue it, what the law adds once you are registered for VAT, why every price you quote must now be in shillings, and how to chase an invoice that has gone unpaid. If you are still setting up, start with how to register a business and read this alongside our tax guide.
The three documents people confuse
Most invoicing disputes start with the wrong document at the wrong moment.
A proforma invoice is a quotation dressed as an invoice. It tells the customer what a job will cost and what your terms are. It is not a demand for payment for a supply that has happened, and it is not the document tax law means when it says "invoice". Use it to win the work.
A tax invoice is the real thing: a demand for payment for a supply you have made or are making. Once you are registered for VAT its contents are prescribed by section 86 of the Value Added Tax Act, 2014, and it must be serially numbered and generated by an electronic fiscal device.
A fiscal receipt is proof of payment received. Section 36 of the Tax Administration Act, 2015 is blunt about it: a person who supplies goods, renders services, or receives payment in respect of goods supplied or services rendered shall issue a fiscal receipt or fiscal invoice using an EFD. Note that third limb. It is the receipt of money that triggers the duty, so a bank transfer or a mobile money payment needs a receipt exactly as cash does.
The practical rule: proforma to agree the price, tax invoice to demand the money, fiscal receipt when the money lands. Many businesses issue one EFD-generated document that does the second and third jobs at once, which is fine when payment is immediate. It is not fine when you sell on credit, because you still owe the customer an invoice on delivery and a receipt on payment.
What must appear on your invoice
Section 86(1) sets the minimum for a VAT-registered supplier. The invoice must be serially numbered, true and correct, generated by an EFD, and show:
- the date it is issued
- your name, Taxpayer Identification Number and VAT Registration Number
- a description of what you supplied, the quantity, and any other relevant specifications
- the total consideration payable and the amount of VAT included in it
- above a minimum supply value set in the regulations, the customer's name, address, TIN and VRN
That last requirement carries a sting worth understanding. Section 86(2) says an invoice missing the customer's details is still a valid invoice, but it cannot be used to support an input tax credit claim. So the document is legally fine and commercially useless to your customer. They will come back for a corrected one, and if enough time has passed you will have created a problem you cannot fix.
If you are not registered for VAT, none of the section 86 particulars bind you, and you must not charge VAT, show a VAT line, or put a VRN on your paperwork. Charging tax you are not registered to collect is a serious matter, not a rounding error. Your invoice should still carry a number, a date, your business name and address, your TIN, a clear description, the amount due, your payment terms and your bank or mobile money details. Your customer still gets an EFD receipt when they pay. If the Commissioner General has excluded you from the EFD requirement, section 36(4) prescribes what your manual receipt must show: the date of payment, your full name and address, a full description of the goods or services with the quantity and value, the buyer's full name and address, and the TIN.
Where you invoice through an agent, or a customer's agent signs for the goods, section 88 requires the documentation to carry the principal's name, address, TIN and VRN, not the agent's.
The timing trap: your invoice can start the tax clock
This is the single most expensive thing many small Tanzanian businesses do not know.
Section 15 says VAT on a taxable supply becomes payable at the earliest of three moments: when the invoice for the supply is issued, when the consideration is received in whole or in part, or the time of supply. Whichever comes first wins.
Issuing an invoice is therefore a tax event in its own right. If you invoice a customer on 10 February on 60-day terms, the VAT falls into your February return and you must account for it long before the money reaches your account. You are, in effect, lending the government its own tax while you wait to be paid.
Three consequences follow.
First, do not invoice early to look busy. An invoice issued in the last week of a month to tidy the books pulls the tax into that month for no benefit at all.
Second, use the proforma properly. A quotation does not trigger section 15, because it is not the invoice for the supply. But do not treat the label as a trick: if the supply has actually happened, or the customer has paid you a deposit, section 15 bites anyway through limbs (b) and (c). Calling a document a proforma does not undo a completed supply.
Third, match your terms to your cash. If your customers habitually pay at 60 days and you account for VAT monthly, you need working capital to bridge the gap. That is one of the most common reasons an otherwise profitable Tanzanian business runs dry, and one of the better reasons to arrange a facility on business loans rather than reaching for a personal loan. Model it before you need it; our VAT calculator will give you the tax on a given invoice value in seconds.
For work billed in stages, section 16(1)(a) treats a progressive or periodic supply as a series of separate supplies, with the tax point falling at the separate invoice, the part payment, or the date payment falls due. Stage billing therefore spreads the tax as well as the cash, which is a real advantage on a long contract.
Invoice in shillings: this is now the law
Since 28 March 2025, pricing and payment for goods and services inside Tanzania must be in Tanzanian shillings. The Regulations on the Use of Foreign Currency, 2025, published in Government Gazette No. 198 of that date under section 26 of the Bank of Tanzania Act, 2006, made it an offence to quote, advertise or indicate prices in foreign currency, to compel, facilitate or accept payment in foreign currency, or to refuse a payment made in shillings. The Bank of Tanzania set the position out in a public notice from the Governor on 2 May 2025 and invited the public to report breaches.
For invoicing, this means:
- your price list, website, menu, rate card and quotation are all priced in TSh
- your invoice is denominated in TSh
- you cannot refuse shillings from a customer who offers them
- you cannot enter into or renew a contract requiring payment in foreign currency, and existing foreign-currency contracts were given a limited window to be brought into line
The Regulations do list transactions that may still be conducted in foreign currency, and genuine cross-border trade is not the same thing as a domestic sale. If you export services to a client abroad, or you operate in one of the sectors carved out, check the Regulations themselves or ask your bank before you raise a dollar invoice. Do not rely on what a competitor appears to be doing. If you hold foreign currency for reasons unconnected to pricing, that is a separate question from how you invoice.
One habit survives this rule cleanly: if your costs are genuinely dollar-linked, price in shillings but review your price list on a fixed schedule and say so in your terms. That is lawful. Quoting "USD 500, payable in shillings at the day's rate" is not.
Numbering, copies and the file that survives an audit
Section 86 requires invoices to be serially numbered. One sequence, no gaps, no restarting when you change notebooks or software. A gap in the sequence is the first thing an auditor asks about, and the honest answer, "I made a mistake and threw it away", is a worse answer than a cancelled invoice kept on file with a note explaining it.
Section 86(4) allows one original per supply. If a registered customer loses theirs you may give them a copy, marked as a copy. You may not issue a second original.
When something changes after the invoice has gone out, whether a return, a discount, a cancelled line or a price correction, the document is an adjustment note under section 87, not a fresh invoice. It carries the same kind of particulars: the date, your name, TIN and VRN, the nature of the adjustment event and the supply it relates to, and the effect on the VAT payable. Section 87(4) allows an amended tax invoice to serve as an adjustment note if it meets the regulations. The same customer-details rule applies: leave them off and the note cannot support the decreasing adjustment.
Keep everything for five years. Section 89(2) of the VAT Act requires records to be kept for at least five years from the end of the tax period they relate to, or until any audit, recovery proceeding, dispute or prosecution about that period is finally decided, whichever is later. Section 35(3) of the Tax Administration Act says the same for tax documents generally, and section 35(4) adds that if you file an objection or appeal, every document relevant to the dispute is kept until the matter is finally determined. Paper and electronic both count. Scan and back up, because a shop fire should not also become a tax problem. Our guide on how to start and fund a business covers the wider filing habit.
What the penalties actually are
Section 86 of the Tax Administration Act covers the EFD offences: failing to acquire and use a device when you start trading, failing to issue a fiscal receipt or invoice on receiving payment, issuing one that is false or incorrect in a material particular, using the device in a way that misleads the system, or tampering with it. The penalty is a fine of not less than 200 and not more than 300 currency points, or imprisonment for up to three years, or both. Where tax has actually been evaded, section 86(3) adds a fine of twice the tax evaded.
Currency points exist precisely so that shilling amounts can be adjusted for inflation without amending every Act, and successive Finance Acts have changed the conversion. For that reason we do not quote a shilling figure here. Confirm the current value of a currency point with the TRA before you rely on a number you have read anywhere, including in older articles that still quote one.
There is also a buyer-side offence most people have never heard of. Under section 86(4), a person who fails to demand a fiscal receipt, or fails to report a refusal to issue one, commits an offence carrying 2 to 100 currency points. Asking for your receipt is not rudeness. It is a legal duty on you as the customer, and it is also how you protect your own deduction.
Deductions your customer may make before paying
Do not assume the figure on your invoice is the figure that lands in your account. Two lawful deductions are common in Tanzania.
Some customers, notably government bodies and certain designated institutions, are required to withhold tax from what they pay you and remit it to the TRA on your behalf. It is not a discount and it is not lost: it is a credit against your own tax bill, provided you obtain the withholding certificate. Chase the certificate as hard as you chase the payment, because without it you have simply paid the tax twice.
Separately, designated withholding agents deduct a portion of the VAT shown on your invoice and pay it straight to the TRA rather than to you. Again the amount is recoverable through your return, but only if you hold the documentation.
Build both into your cash flow forecast, and ask any new large customer at the quotation stage whether they are a withholding agent. It is an ordinary question, and the answer changes what you will actually receive.
Payment terms that get you paid
Terms are part of the invoice, not an afterthought printed in small type at the bottom.
Say when. "Payment due within 30 days of the invoice date" beats "payment on receipt", because it names a date a court can work with.
Take money up front where you can. A deposit does two things: it funds the work, and it tells you whether the customer can pay at all. Remember that receiving a deposit triggers the VAT tax point on that part under section 15(b).
Bill in stages on anything long. Stage payments beat one invoice at the end, both for cash and for tax.
Put your bank details on every invoice, and use a business account rather than your personal one. Mixing them destroys your records and makes proving a debt harder. If you do not have one yet, see how to open a bank account and compare what is available on bank accounts.
Name a late-payment consequence in the contract. Tanzania has no general statutory interest on overdue commercial debts, so if you want interest, or a right to suspend service, it must sit in the agreement the customer accepted. A clause agreed in advance is worth far more than an angry letter later.
Require a purchase order number from corporate customers and quote it on the invoice. Most large-company payment delays are not refusals in disguise; they are an invoice that cannot be matched to an approved order.
Chasing a late invoice, step by step
Work in order, and keep every step in writing.
- Send a statement of account, not another copy of the invoice. A statement showing what is outstanding and how old it is changes the conversation.
- Call, then confirm by email. "As discussed, you confirmed payment of TSh 4,200,000 by 14 October." A written record of a spoken promise is worth having.
- Send a formal demand letter with a deadline and a clear statement of what you will do next. Keep proof of delivery.
- Get a written acknowledgement. This is the most valuable and least understood step. Under section 27(3) of the Law of Limitation Act, where the person liable acknowledges the claim or makes any payment in respect of it, the right of action is treated as having accrued afresh on the date of that acknowledgement or last payment. Section 28(1) requires the acknowledgement to be in writing and signed by the debtor or a duly authorised agent. Section 28(5) is generous about its form: it still works even if it does not specify the exact claim, even if it arrives with a refusal to pay, and even if it is made subject to a condition. A signed email saying "we accept the balance is outstanding but cannot pay until January" restarts your clock.
- Consider a payment plan in writing. A part payment also restarts the clock under section 27(3), and half the money now usually beats a judgment in three years.
- Instruct an advocate, whose demand letter carries more weight and who can advise on the right court for the amount involved.
The deadline that matters: a suit founded on contract not otherwise specifically provided for must be brought within six years, under item 7 of Part I of the First Schedule to the Law of Limitation Act. A suit founded on tort has three. Section 28(4) contains the trap. An acknowledgement made after the limitation period has already expired has no effect at all; it cannot revive a dead claim, only extend a live one. Do not let an old debt sit until it is unenforceable and then go looking for a letter.
Write off what is genuinely uncollectible rather than carrying a fiction in your books, and record why you did. If chasing debts has left you personally exposed, read how to borrow money safely before you plug the gap with expensive credit.
A worked example
You run a consultancy, registered for VAT. A client asks for a TSh 8,000,000 piece of work.
15 January. You send a proforma: TSh 8,000,000 plus VAT at 18%, which is TSh 1,440,000, for a total of TSh 9,440,000. Terms: 40% deposit, balance 30 days from delivery. No tax point yet, because this is a quotation.
22 January. The client pays the TSh 3,776,000 deposit, being 40% of the gross. Money has been received, so under section 15(b) the VAT on that part is payable now. You issue an EFD fiscal receipt and account for that tax in your January return.
10 March. You deliver and issue the tax invoice for the balance. It is serially numbered and EFD-generated, and it shows your name, TIN and VRN, the client's name, address, TIN and VRN, a clear description of the work, the net amount, the VAT and the total. It quotes the client's purchase order number and carries your bank details and the due date of 9 April.
9 April. Nothing arrives. You send a statement of account.
20 April. You send a demand letter. The client's finance manager replies by email confirming the balance is due but asking for 60 days. That email, sent by an authorised person, is an acknowledgement under sections 27 and 28, so your six-year clock restarts from its date.
5 June. The client pays. You issue the fiscal receipt for the balance and file the whole bundle: proforma, deposit receipt, tax invoice, statement, demand letter, acknowledgement and final receipt, kept for five years.
Notice what actually did the work. The deposit funded the job, the stage structure spread the tax, the purchase order number got the invoice approved, and the acknowledgement protected the claim. None of it required a lawyer.
Mistakes that cost Tanzanian businesses money
Invoicing in dollars. Now an offence for domestic supplies. Reprice in shillings.
Issuing the invoice months after the job. Section 69(2) of the VAT Act bars an input tax credit more than six months after the date of the tax invoice or fiscal receipt. A late invoice can therefore hand your customer a real cash loss, and lose you the customer.
Leaving the customer's details off a large invoice. Valid under section 86(2), and unusable for their input claim. Ask for the TIN and VRN at the quotation stage, not after delivery.
Gaps in the invoice numbers. Cancel on the file, never in the bin.
Issuing a second original. Section 86(4) allows a marked copy only.
No receipt because "they paid by transfer". Section 36(1) covers receiving payment, whatever the method.
Treating a corrected invoice as a new invoice. Use an adjustment note under section 87 instead.
No written terms. Without them there is no interest, no right to stop work, and a much harder argument about when payment fell due.
If invoicing is new to you because the income is new, our guide to making money online covers where these obligations begin, and how to check your credit report matters if you intend to offer credit terms of your own.
Frequently asked questions
Is a proforma invoice a legal invoice? No. It is a quotation. It does not demand payment for a supply already made, and on its own it does not create the tax point in section 15(a). It is genuinely useful for agreeing a price and terms before work starts. What it cannot do is delay tax on a supply that has actually happened or on money you have already received, because section 15(b) and (c) still apply.
My customer wants a "tax invoice" but I am not registered for VAT. What do I give them? A normal invoice, and an EFD fiscal receipt when they pay. Do not charge VAT, show a VAT line, or put a VRN on anything. Explain plainly that you are below the registration threshold, so there is no VAT for them to reclaim on your supply. If they insist because their own system demands it, that is their process problem, not a reason to charge tax you do not collect. Check the current threshold with the TRA if your turnover is growing.
Can I invoice a foreign client in US dollars? The prohibition in the 2025 Regulations is on pricing and payment for goods and services within the country. The Regulations do list transactions that may be conducted in foreign currency, and genuine cross-border trade is treated differently from a domestic sale. Confirm your own situation against Government Notice No. 198 of 2025, or with your bank, before raising a dollar invoice, and never use a foreign client as cover for pricing a local sale in dollars.
How long must I keep invoices? Five years. Section 89(2) of the VAT Act runs that period from the end of the tax period the records relate to, and section 35(3) of the Tax Administration Act says the same for tax documents generally. If you have an objection or appeal running, keep everything relevant to it until the matter is finally determined, however long that takes. Electronic copies are expressly allowed, so scan and back them up.
My customer has not paid for eight months. Is it too late to do anything? No. A suit founded on contract has a six-year limitation period under the First Schedule to the Law of Limitation Act, so eight months is early. Use the time: send a statement, then a demand, and try to obtain a signed written acknowledgement or a part payment, either of which restarts the clock under section 27(3). Just do not leave it until the six years are nearly gone, because section 28(4) means an acknowledgement obtained after the period has expired is worthless.
Do I need to issue an EFD receipt for a mobile money payment? Yes. Section 36(1) of the Tax Administration Act applies to a person who supplies goods, renders services or receives payment for them. The method of payment is irrelevant, so cash, bank transfer, card and mobile money are all payment. If you take a lot of small mobile money payments, set up a routine for issuing receipts against them during the day rather than trying to reconstruct the takings at closing time.
Reviewed 28 September 2026. Legal requirements reflect the Value Added Tax Act, 2014 (Cap. 148), the Tax Administration Act, 2015 (Cap. 438), the Regulations on the Use of Foreign Currency, 2025 (GN No. 198 of 28 March 2025) as announced by the Bank of Tanzania on 2 May 2025, and the Law of Limitation Act, Cap. 89. Penalty amounts are expressed in currency points because the shilling value is amended by Finance Acts, so confirm the current value with the TRA. The VAT registration threshold, and the minimum invoice value above which a customer's TIN and VRN must appear, are both set in regulations rather than in the Act - confirm each with the TRA.
This article is general information, not financial or legal advice. Your circumstances may differ.
