In Tanzania, your net worth isn't just about the money in your bank account—it's about your assets. However, a MacBook bought in 2024 isn't worth the same in 2026. Understanding depreciation is the difference between a "guess" and a "financial statement."
The TRA Standard: Reducing Balance
The Tanzania Revenue Authority (TRA) primarily uses the Reducing Balance Method. Instead of losing a fixed amount every year, the asset loses a percentage of its *current* value. This reflects reality: a car loses more value in its first year than in its tenth.
Common TRA Classes:
- Class 1 (37.5%): Computers, phones, and heavy earth-moving equipment.
- Class 2 (25%): Cars, small buses, and pickup trucks.
- Class 3 (12.5%): Furniture, fixtures, and large ships/aircraft.
Why This Matters for Your Net Worth
If you list a 5-year-old Toyota IST at its original buying price in your asset tracker, you are lying to yourself about your wealth. Real wealth building requires honest data. Tracking depreciation allows you to plan for future replacements and understand your true equity.
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