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Investment Incentives

For purpose of incentives, investments are separated into two categories:

1. Lead Sectors

Agriculture, Mining, Infrastructure ( e.g. Road Construction, Bridges, Airports, Generation of Electricity, Telecommunications, Water Services, Back up Services to Mining and the like ) and Export Processing Zones.

2. Priority Sectors

Air Aviation, Commercial Buildings, Commercial Development and Microfinance Banks, Export Processing, Geographical special development areas, Human Resources Development, Manufacturing, Natural Resources including fishing, Rehabilitation and Expansion, Radio and Television Broadcasting, Tourism and Tour Operations.

 

Minimum Investment

To qualify for and obtain TIC Certificate of Incentives minimum fixed investment cost for New, Rehabilitation and Expansion Projects should be at least US $100,000 for projects which are owned 100% or majority shareholders by Tanzanian citizen(s) and US $300,000 for projects which are 100% or majority shareholders owned by non-Tanzanian citizen(s) or a company which is incorporated under laws of any country other than Tanzania..

 

The Incentives available to the holders of TIC Certificates of Incentives are:

1. The recognition of private property and protection against any non-commercial risks, Tanzania is an active member of MIGA (Multilateral Investment Guarantees Agency). Likewise Tanzania is also a member of The International Centre for Settlement of Investment Disputes (ICSID) so investors have unrestricted rights to International arbitration in case of dispute with government;

2. Reduced import tariff on project capital items (5% import duty for investments in priority sectors and ZERO% for investment in Lead Sectors);

3. Favourable investment allowances and deductions i.e. capital allowance (100%) on industrial buildings, plant and machinery and on agricultural expenditure;

4. Deferment of VAT payment on project capital goods as defined in the tariff book and its relevant annexes deferred VAT to be shown on monthly return after which it will be extinguished unless it is discovered otherwise after audit;

5. Imports Duty drawback on raw materials;

6. Zero-rated VAT on Mining inputs, Agriculture inputs, goods manufactured for exports, foodstuff and tourism;

7. Straight line accelerated depreciation allowance on capital goods;

8. Up to five years carryover of all business losses against future profits;

9. A reasonable corporate tax rates 30% and low withholding tax on loan interest payments;

10. The unrestricted right to transfer outside the country 100% of foreign exchange earned profits and capital;

11. The ease of obtaining other permits such as Residence/Work Permits, industrial licence, trading licence etc. through one-stop-shop operation of TIC;

12. Automatic permits for employing an initial quota of 5 foreign nationals on the project holding Certificates of Incentives;

 

Mining and Backup Services to the Mining Industry

1. Types of Licence offered

  • Prospecting Licence;
  • Retention Licence;
  • Special Mining Licence;
  • Mining Licence;
  • Gemstone Mining Licence;

2. Applicable Law

  • The Mining Act, 1998;

3. Incentives Offered

  • Zero rated duty on capital goods, spare-parts, vehicles and supplies until first production anniversary, thereafter reverts to 5%;
  • Zero-rated VAT on all items above;
  • Zero rated Capital Gains tax;
  • Capital allowance 100% with an addition of 15% capital allowance;
  • Indefinite carry over of losses;
  • Corporation tax 30%;
  • Withholdong tax on management 3%;

4. Areas of Investment

  • Mineral Exploration and Mining;
  • Mining Services;
  • Value Addition Activities;
  • Minerals Trading;

5. Royalties

  • 3% all minerals except Diamonds which is 5%;
  • No tax, Duty, fees or other fiscal import on dividends;

6. Contact

Permanent Secretary
Ministry of Energy and Minerals
P.O.Box 2000
Dar es Salaam, Tanzania
Tel: 255-22-2137142
Fax: 255-22-2116719
Email:
This email address is being protected from spambots. You need JavaScript enabled to view it.

 

Incentives for Projects in Economic Infrastructure

The incentives are the same as in mining.

 

Incentives for Tourism Sector

In addition to the incentives provided to holders of Certificates of Incentives item in "ECONOMIC INFRASTRUCTURE" all essential Hotels facilities are treated as capital goods as spelt out in the Capital Goods schedule annexure.

 

Incentives for Agriculture Sector

  • Zero-rated duty on capital goods, all farm implements, fertilizers, pesticades, etc;
  • Zero-rated VAT on capital goods, all farm implements, fertilizers, pesticades, etc;
  • Other incentives as under item in "ECONOMIC INFRASTRUCTURE";

 

Incentives offered under Petroleum Exploration and Development

1. Exploration Period - 11 years (total);

  • Initial Period - 4 years;
  • First Extension - 4 years;
  • Second Extension - 3 years;

2. Relatively large exploration areas. Normally, a license consists of 60 blocks (a block being 5 × 5 minutes), however each PSA can consist more than one exploration license;

3. Fully negotiable work program and economic terms (cost oil recovery and profit oil split);

4. Maximum TPDC participation is capped at 20% from former 50%;

5. Income Tax and Royalty paid for by TPDC on behalf on the concessionary company;

6. No signature or production bonus payment;

7. Full allowance for unrecovered exploration costs incurred under earlier PSA's in any contract area by the same companies that makes a discovery in a subsequent PSA (No ring-fencing);

8. No import taxes on all equipment used in petroleum exploration;

9. No foreign exchange restrictions;

10. Recourse to international arbitration provided for;

11. Economic basement interpretation allowed for determination of exploration well total depth;

 

Basic Documents Required by the Tanzania Investment Centre (TIC) in order to register your investment

*** 3 copies of the project's Business Plan

1. In order to enable the Centre to process your application and co-ordinate your application and co-ordinate your project activities in the future, you are requested to submit along with your application a simple business plan containing the following information among other things:

  • Investors profile;
  • Project Investment cost;
  • Sources of finance;
  • Employment generation;
  • Implementation schedule;
  • Environmental impact assessment if any;

2. Your application should be accompanied by the following:

  • 3 duly filled copies of TIC Application Forms TIC Application Forms are available at the Centre in Dar es Salaam;
  • A copy of the company's Memorandum and Articles of Association;
  • A certified copy of the Certificate of Company Incorporation;
  • Evidence of sufficient finance capital available to implement the project;
  • Evidence of Land ownership i.e. Land title, Lease agreement or equivalent;
  • A covering letter to which the above are attached;

 

Note: All applications have to be submitted directly to the TIC Registry or Reception in Dar es Salaam;

 

Facilitation Services and Fees

TIC renders services to facilitate all Investors whether covered by the TIC Act (1997) or not:

1. Facilities Fees

  • Certificate of incentives US $750;
  • Application Forms US $120;
  • Other Services: 10% on top of what is charged by relevant Departments;

2. Contact

The Executive Director
Tanzania Investment Centre
Plot No. 9A&B, Shaaban Robert Street
P.O.Box 938
Dar es Salaam, Tanzania
Tel: 255-22-2113365
Fax: 255-22-2118253
Email:
This email address is being protected from spambots. You need JavaScript enabled to view it.

 

For more information please visit the following website - Tanzania Investment Centre

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