Importation of goods in Tanzania attracts various taxes which include Import Duty, Excise Duty and Value Added Tax. All these taxes are levied on goods imported in the country.
This means that investors both local and foreign will have to incur the expenses of paying the taxes imposed on importation of goods in Tanzania. However, exemptions are granted to goods for a variety of reasons, such as to adhere to international norms for those with diplomatic status, to remove tax burden from donor funded projects, to respect Government commitments in legal agreements, to implement certain policies such as support for NGOs or for certain economic sectors and to investors whose projects have been registered with the Tanzania Investment Center (TIC).
Breakthrough Attorneys sought to prepare this article to basically demonstrate reliefs afforded to investors who have been registered with the TIC with regards to import duty levying in Tanzania
What is Import Duty?
This is a tax levied on imported goods. The duty is usually calculated as an ad-valorem rate on C.I.F value of goods imported into the country, and is collected before goods leave the entry point into the country and/or bonded warehouses. The entry points in Tanzania are the Dar es Salaam Port, Julius Nyerere International Airport in Dar es Salaam and Kilimanjaro International Airport in Kilimanjaro.
What is Import Duty exemption?
Import Duty exemption means that the importer whose Project has been registered with TIC will get 75% import duty exemption on the deemed capital goods imported that are to be used for production of goods and services in the registered Project. This means, the investor will only be required to pay 25% of the import duty chargeable on the imported goods and the remaining 75% will be exempted.
What goods are eligible for import duty exemption?
Import duty is exempted for deemed capital goods imported by a TIC registered investor for their registered project.
What are deemed Capital goods?
These are goods such as equipment, utility vehicles and building materials. These goods are legible for import duty exemption under the Tanzania Investment Centre. It should be noted that building materials are legible for import duty exemption excluding cement, steel reinforcement Bars, Roofing sheets, tiles and air conditioners. Moreover, spare parts to machineries or equipment are excluded from import duty exemption.
How can one get import Duty exemption?
Beneficiaries of Import Duty exemption are advised to apply well in advance of importation or purchase of the goods to avoid delays. The investor shall make an application for import duty exemption via a letter addressed to the Commissioner of Customs& Excise of The Tanzania Revenue Authority (TRA). In tandem with the application letter, a list of the deemed capital goods in excel format shall be attached for approval.
Where do you lodge the Import Duty Exemption application?
The application for import duty exemption for a TIC registered investor shall be lodged with the Executive Director of TIC who will forward the same to the Commissioner of Customs & Excise at the TRA’s Headquarters. The Commissioner will scrutinize the application and the list presented for approval.
What is the timeline for acquiring Import Duty exemption?
Once the application is lodged at TIC and forwarded to the Commissioner of Customs & Excise at TRA, the approval will be issued within two to three weeks. The Commissioner will issue an approval letter with a list of deemed capital goods that have been approved for exemption.
Other matters to note:
Once the approval letter for Import Duty exemption and an approved list are issued the same shall be handed over to the clearing agent who will proceed with clearing the goods at the point of entry.
This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, Breakthrough Attorneys, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.