The Tanzania Investment Centre (TIC) was established in 1997 by the Tanzania Investment Act to be the primary agency of the Government to coordinate, encourage, promote and facilitate investment in Tanzania and to advise the Government on investment policy and related matters. The TIC became an investment promotion agency by providing investment opportunities in various sectors such as agriculture, tourism, fisheries, mining, special economic zone etc.
The TIC assists all the investors to obtain permits, authorization etc., required under different laws to set up and operate investments in Tanzania. TIC offers a package of investment benefits and incentives to both domestic and foreign investors. A minimum capital investment of USD 500,000 by foreign investors and USD 100,000 by resident investors is required to avail the benefits offered by the TIC. The investors are required to file an application to TIC for incentives and obtain a certificate of incentives (including tax incentives).
- 0% import duty on import of capital goods, computers and accessories, raw materials and replacement parts for agriculture, animal husbandry and fishing, pharmaceuticals etc.;
- 0% import duty on import of hotel equipment by licensed hotels;
- Import duty-drawback on raw materials used for producing goods for export and deemed exports. Deemed exports cover locally produced or manufactured goods, which are sold to foreign agencies or entities operating in Tanzania, which are exempt from payment of import duties.
- 10% import duty for semi-processed / semi-finished goods; and
- 50% capital allowances in the first year of use in respect of plant and machinery used in manufacturing processes, subject to certain conditions (See Sec 6.3).
Tanzania has set up SEZ and EPZ for promoting industrial growth and exports. The EPZ scheme promotes investment in the manufacturing sector mainly for export while the SEZ scheme covers other sectors such as agriculture, trade, tourism, mining, and forestry etc. Various fiscal incentives are provided to attract investments in EPZ / SEZ, subject to the following conditions:
- The investment must be a new investment;
- Annual export turnover should not be less than USD 5 million for foreign investors and USD 1 million for local investors;
- EPZs must export at least 80% of their products;
- Adequate environmental protection systems are set up;
- The project makes use of modern production processes and new machinery; and
- Investments must only be located in SEZ designated areas.
- Exemption from corporate tax, withholding tax on dividend, interest (including interest on foreign-sourced loans) and rent for a period of 10 years (effective 1 July 2018, the withholding tax on dividend and rent has been abolished);
- Reduction or remission of customs duties, VAT or any other tax payable on raw materials and capital goods;
- Exemption from payment of all taxes and levies imposed by local government authorities for a period of 10 years on goods and services produced or purchased; and
- Exemption from property tax for 10 years.
- Exemption from payment of taxes and duties in respect of machinery, equipment, heavy-duty vehicles, building and construction materials, and any other goods of capital nature, which are to be used for the purposes of the development of the SEZ infrastructure;
- Exemption from payment of stamp duty on any instrument executed in or outside the SEZ related to the transfer, lease or hypothecation of any movable or immovable property in or situated within SEZ;
- Exemption from payment of stamp duty on any document, certificate, instrument, report or record related to any activity, action, operation, project, undertaking or venture in the SEZ;
- Exemption from payment of VAT on utility charges; and
- Remission of customs duty, VAT, and any other tax charged on raw materials and goods of capital nature related to the production.
- 100% deduction for expenditure incurred on agricultural improvement in clearing land, excavating irrigation channels or planting perennial crops or trees bearing crops;
- 100% deduction for expenditure incurred on the prevention of soil erosion or remediation of damage caused by natural resource extraction;
- 100% deduction for research and development expenditure;
- Exemption from corporate tax for strategic projects that are approved by the National Investment Steering Committee under the Tanzania Investment Act for the entire project period up to TZS 1 billion (effective 1 July 2020) upon approval by the Minister of Finance;
- 100% deduction for contributions made to the government for fighting the COVID-19 pandemic (effective 1 July 2020) for the period until the government announces the end of the pandemic;
- 100% deduction for contributions made towards the AIDS trust fund (effective 1 July 2020); and
- Reduction in rate of corporate income tax from 30% to 25% for the first three years for companies that are newly listed on the Dar es Salaam Stock Exchange with a public shareholding of at least 30%.