Investment Incentives in Tanzania: Tax Benefits, TISEZA Guide & Investor Opportunities

‘A Comprehensive Overview’

Key Points.

  • Introduction
  • Regulatory Framework of Incentives
  • Types of Incentives
  • Strategic and Special Strategic Investment Status
  • Legal requirements for obtaining incentives
  • Renewal of Certificate of Incentives
  • Amendment of Certificate of Incentives
  • Conclusion

 

Introduction

The Tanzania Investment Act, 2022, defines “incentives” as tax reliefs and concessional tax rates which may be accessed by an investor under the Income Tax Act, the Customs Tariff Act, the Tanzania Revenue Authority Act, the Value-Added Act, and any other law for the time being in force, and includes additional benefits that may be accessed by an investor.

Investment incentives in Tanzania are structured to attract both local and foreign investors by offering tax reliefs and other benefits under multiple legal frameworks. These incentives are designed to stimulate economic growth, enhance job creation, and foster technological advancements.

Regulatory Framework

Investment incentives in Tanzania are governed by a structured regulatory framework that provides legal assurance and compliance mechanisms. Key legislation includes: –

  1. The Tanzania Investment Act, No. 10 of 2022: This establishes the Tanzania Investment Centre (TIC) as a one-stop facilitation agency for investors, offering streamlined investment approval processes and incentives.
  2. The Zanzibar Investment Promotion and Protection Act, No. 14 of 2018: This regulates investment activities in Zanzibar, ensuring incentives align with the island’s development goals.
  3. The Mining Act, [Cap. 123 R.E 2019]: This governs mining investments, ensuring tax stability and defining royalty structures.
  4. The Special Economic Zones Act, [Cap. 420 R.E 2012]: This provides a legal basis for tax incentives and operational benefits for businesses operating in designated economic zones.
  5. The Value Added Tax Act, [Cap 148 R.E 2019]: Specifies Value Added Tax (VAT) exemptions applicable to strategic investments and export processing businesses.

These laws create a structured investment environment by defining eligibility criteria, offering protection to investors and providing clear dispute resolution mechanisms. They also ensure that incentives align with Tanzania’s long-term economic goals while balancing revenue collection and business growth.

Types of Incentives

  1. Fiscal Incentives. These include:
    1. Tax Exemptions – Value Added Tax (VAT) and import duty exemptions on capital goods, raw materials, and essential project inputs.
    2. Reduced Import Duty – Zero percent (0%) duty on project capital goods, computers, pharmaceuticals, and agricultural equipment.
    3. Capital Allowances – Up to 50% capital allowances in the first year for investments in manufacturing, fish farming, and tourism services.
    4. VAT Deferment – For project capital goods valued at TZS 20 million or more.
    5. Import Duty Drawback – On raw materials used for goods meant for export.
    6. Zero-rated VAT – On exports.
  2. Non-Fiscal Incentives. These include:
  3. Protection Against Non-Commercial Risks – Through international bodies like MIGA and ICSID.
  4. Access to Land for Investment – Investors can obtain land through TISEZA’s land bank registry.
  5. Employment Permits – Automatic issuance of permits for five foreign nationals per project.
  6. Guaranteed transfer of net profits or dividends of the investment.

Strategic and Special Strategic Investment Status

The government offers additional benefits for large-scale investments, including the strategic and special strategic investment status.

The Strategic Investment Status covers:

  1. Minimum investment of USD 20 million (local investors) or USD 50 million (foreign or joint ventures).
  2. Must create significant employment opportunities.
  3. Introduction of innovative technology and increased export capacity.
  4. Contribution to foreign exchange earnings.
  5. Investment in a designated special geographical area.

The Special Strategic Investment Status covers:

  1. Minimum investment of USD 300 million.
  2. Transactions must go through local financial institutions.
  3. At least 1,500 direct employment opportunities must be created.
  4. Must contribute significantly to foreign exchange earnings and import substitution.

Legal Requirements to Apply for Incentives

To qualify for investment incentives, investors must comply with the following:

  1. Register with the Tanzania Investment and Special Economic Zones Authority (TISEZA).
  2. Notarize and certify application documents, i.e., TISEZA Application form, TIN Certificate, Certificate of incorporation, Lease agreement, Certified Memorandum and Articles of Association, and the physical presence of one of the directors of the company to be formed or their authorized representative. In addition, for an authorized representative, a Power of attorney is mandatory.
  3. Meet the minimum investment threshold (USD 50,000 for local investors and USD 500,000 for foreign investors).
  4. Pay for the project registration fee.
  5. Obtain a Certificate of Incentives from the Tanzania Investment and Special Economic Zones Authority (TISEZA).
  6. Comply with all tax and regulatory requirements.

 

Renewal of Certificate of Incentives

Investors can obtain a Certificate of Incentives in 3 phases. In the first phase, the validity of the Certificate of Incentives is three (3) years. After a lapse of three years (3), an Investor may apply for an extension of the Certificate of Incentives. The certificate of incentive is renewable for one year, with a maximum of two renewals (2 years). Investors are required to submit progressive reports every six months after obtaining the Certificate of Incentive. The total fee for renewal of Certificate of Incentives is TZS  5,181,347.15/= or USD 2000.

 

Amendment of  Certificate of Incentives

In Tanzania, Investors who make changes to project information, such as a change of project location, a change of shareholders, or a change in the type of business, are required to amend the original certificate to reflect the new changes. The amendments are processed at the Tanzania Investment Centre (TIC) by submitting the amended documents and paying the amendment fee of TZS 2,590,673.58 or USD 1,000.

Conclusion

Tanzania’s incentive structure provides a robust framework for attracting investment across multiple sectors. By balancing fiscal benefits with strategic economic policies, the country continues to position itself as a competitive investment destination in Africa. However, continuous evaluation is necessary to ensure that incentives contribute meaningfully to sustainable economic growth without straining public revenue.

Do you need assistance to go through?

Kindly reach out to our team directly at www.gerpatsolutions.co.tz, info@gerpatsolutions.co.tz, Mob: +255 742 826 955.

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