In a recent landmark decision, the Court of Appeal of Tanzania in Lakairo Industries Group Co. Limited and others vs Kenafrica Industries Limited and others, Civil Appeal No. 593 of 2022 reaffirmed the territorial nature of trademark protection under Tanzanian trademark law, ruling that trademarks registered through the African Regional Intellectual Property Organization (“ARIPO”) under the Banjul Protocol are not recognized in Tanzania. 

The dispute arose between Kenafrica Industries Limited(“Kenafrica”), a confectionery manufacturer dealing with bubble gum and candy, and Lakairo Industries Group Co. Limited(“Lakairo”) and its affiliates. Kenafrica, which produces bubble gums and candies under the trademarks “Pipi Kifua,” “Special Veve” and “Orange Drops,” claimed that Lakairo had infringed on its trademarks by producing and distributing sweets in Tanzania under the names “Lakairo Pipi Kifua” and “Lakairo Super Veve,” using nearly identical branding and packaging. 

Kenafrica sought declaratory and injunctive reliefs, destruction of the infringing products, expungement of the impugned marks from the trademark register and special damages amounting to TZS 3.97 billion.  

The Court of Appeal distilled the appeal into two key issues: whether the Lakairo’s trademarks infringed upon those of Kenafrica and whether Kenafrica suffered any compensable loss as a result of the alleged infringement. 

The parties’ arguments 

Lakairo, the appellant, argued that both parties owned separate and validly registered trademarks in different jurisdictions, Kenafrica in Kenya and through ARIPO and Lakairo in Tanzania. It maintained that, under the Trade and Service Marks Act (Cap. 326, R.E. 2002) (“the Trade and Service Marks Act”), trademark rights are territorial and protection exists only within Tanzania. Since Tanzania has not ratified the Banjul Protocol, ARIPO registrations have no legal effect or enforceability within its jurisdiction. Accordingly, Lakairo contended that no infringement could arise where Kenafrica’s marks were not registered in Tanzania. 

Kenafrica, the respondent, on the other hand, asserted that the appellants’ use of nearly identical names, designs and packaging created market confusion and amounted to passing off. It further argued that its prior foreign registrations and ARIPO filings conferred superior rights over the disputed marks. Kenafrica supported the High Court’s decision ordering the expungement of Lakairo’s trademarks from the Tanzanian register, stating that such relief had been expressly sought in its pleadings. 

The determination 

The Court of Appeal allowed the appeal in its entirety, setting aside the High Court’s judgment and all related orders. It reaffirmed the territorial nature of trademark protection, holding that exclusive rights in Tanzania arise only through registration under the Trade and Service Marks Act. The Court emphasized that since Tanzania has not ratified the Banjul Protocol, ARIPO registrations have no legal effect within its jurisdiction. Consequently, Kenafrica’s ARIPO registrations could not sustain an infringement claim in Tanzania. In support of this position, the Court cited its earlier decision in JP Decaux Tanzania Ltd v. JCDecaux SA & Another [2024] TZCA 838, which established that the first person to register a trademark locally acquires exclusive rights to its use within the country. 

Conclusion 

This decision carries significant implications for trademark owners across East Africa and within the ARIPO region. The Court of Appeal in Tanzania unequivocally reaffirmed that trademark protection in Tanzania is strictly territorial. Only trademarks registered under the Trade and Service Marks Act enjoy legal protection and can serve as the basis for infringement actions. 

The ruling underscores that ARIPO registrations have no legal effect in Tanzania unless and until the Banjul Protocol is formally ratified and incorporated into domestic law. Similarly, foreign trademark registrations do not confer enforceable rights within Tanzania’s borders. Businesses must therefore ensure that their trademarks are independently registered locally to secure protection and enforcement rights. 

Need legal guidance? 

For support with the registration, enforcement or related intellectual property matters, please contact: 

Contributor
Comfort Mugisha Blandes, Managing partner- CYMBELL ATTORNEYS 

blandes@cymbellattorneys.com  

Mercy Chore, Associate – CM Advocates LLP 

mchore@cmadvocates.com 

Or reach our Corporate Commercial Practice Team at: commercial@cmadvocates.com/ law@cymbellattorneys.com. 

Disclaimer: This publication is for informational purposes only and does not constitute legal advice. For tailored legal support, please consult our team. 

The post Court of Appeal of Tanzania Affirms That ARIPO-Registered Trademarks Have No Legal Effect in Tanzania appeared first on Cymbell Attorneys.

The Beneficial ownership concept was brought by the amendment of the Company’s Act 2002 through the Finance Act of 2020, supplemented by the Companies (Beneficial Ownership) Regulations 2023. Beneficial Ownership is an indirect or direct substantial economic interest or benefit or substantial or significant control in a company by a natural person. The need to introduce beneficial ownership regulation in Tanzania comes as a measure to curtail issues of money laundering, exposure of corruption, and illicit financial flow etc.  

The filing of Beneficial Ownership Information to the Registrar of Companies is a mandatory procedure, which failure to provide beneficial ownership information is treated an offense under Companies (Beneficial Ownership) regulations 2023, attracting a penalty of 5 million Tanzanian Shillings. 

The registrar informs Company Management to take immediate action to comply with the filing of Beneficial Ownership information before the 15th of April 2025 as afterward Companies that fail will not be able to carry out transactions with the Registrar such as Annual Returns, Changes in company particulars, obtaining company status report, registration of charges, perusal, requests for access rights and certification of copies of original documents. This action is justified as the Registrar is empowered under the Companies (Beneficial Ownership) regulations 2023 to refuse to transact or register documents brought by a defaulting company. 

Company Beneficial Ownership Information is submitted to the Registrar through a special online platform under the Business Registration and Licensing Agency. The application for Beneficial Ownership is accompanied by a prescribed fee, which upon payment the system sends the application automatically for processing, and afterwards, the Registrar communicates the results, whether it is received or refused with reasons. 

This is to inform the company management to take quick action to comply with the submission of Beneficial Ownership information before the 15th of April 2025 to avoid difficulties that may face the company as already promised by the Brela authority that afterward the company will not transact with the registrar. 

Disclaimer: 

     This publication has been prepared for information purposes only, and it 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 is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, Cymbell Attorneys, its partners, 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. 

Contact Information 

CYMBELL ATTORNEYS 

P.O BOX 11481 

Office No. 302-2, 3rd Floor, Plot 89, Block 45B,  

Victoria Noble Centre, Bagamoyo Road,  

Dar es Salaam- Tanzania 

Cell: +255 713 411 721 

Email: law@cymbellattorneys.com 

Website: https://tz.cmadvocates.com/  

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The Government of the United Republic of Tanzania has on 14th February 2025 passed the Investment and Special Economic Zone Act, 2024 to reshuffle the investment regime in Tanzania, thereby establishing a single government agency named the “Tanzania Investment and Special Economic Zone Authority”, that will oversee and supervise investments in Tanzania. The agency stems from the consolidation of the Tanzania Investment Center, the Export Processing Zone, and the Special Economic Zone, which were former government agencies tasked to supervise investments in the country. 

This move is made operational by repealing the legal framework that establishes the former investment institutions, that is the Investment Act RE 2022, the Export Processing Zone Act RE 2012, and the Special Economic Zone Act RE 2012. 

This reshuffle is motivated by what has been observed from the former investment institution to be carrying overlapping roles and undergoing inefficiencies among state agencies, which results in high operational costs to the government. All these resulted into giving birth to a single Investment Center to oversee the implementation of investment policies and dispute resolution and become a center for registering, managing, and encouraging investment in Tanzania. 

2.0  ANALYSIS OF THE PROPOSED CHANGES  

2.1 Repeal of the Tanzania Investment Act 2022, the Export Processing Zone Act R: E 2012, and the Special Economic Zone Act R: E 2012. 

The Investment and Special Economic Zone Act, 2024 under section 50(1) repeals the legislative legal framework that establishes the Tanzania Investment Center, the Export Processing Zone Authority, and the Special Economic Zone Authority. Meanwhile, all the existing Regulations and Rules that were created under former legal frameworks are adopted and effectively applied as if they have been established by the Investment and Special Economic Zone Act.  

The licenses or certificate of incentives issued by the former regime, to investors will proceed to be valid as if they were given under the new legislation. The Act succeeds the former investment regime without affecting the rights or obligations held by the investors. The investors are encouraged to meet the conditions that are imposed on them at the issuance of the certificate of incentives and the derivative rights to maintain their rights, or rather their license or certificate may be in jeopardy of being invalidated and forfeited back to the Investment and Special Economic Zone Authority. This directive comes to ensure compliance by the investors at this time of the transition, and to ensure opportunities given to particular investors through these licenses are accordingly utilized to foster the country’s economy. 

 2.2 Introducing the Investment and Special Economic Zones. 

Section 4 (1) of the Act establishes the Investment and Special Economic Zone that will function as a one-stop investment center in mainland Tanzania to deal with all investment matters, as stipulated through section 12 of the Act. The Investment and Special Economic Zone is positioned to be the center of promoting the state’s investment policies and to be tasked to register and issue investment certificates or licenses to investors on new, or ongoing investments. 

The objectives of the Investment and Special Economic Zones are those of the former Tanzania Investment Center or the Export Processing Zone Authority, which is mainly to promote investment in Tanzania. The main variance is that now we have a single investment authority, the “Investment and Special Economic Zones” that does all the work which were earlier divided into the three former regimes. While introducing this law, the new authority is expected to clear up redundancy and promote efficiency in servicing investors here in the country. 

 2.3 Establishment of the National Investment Development Committee. 

Section 7 of the Act establishes the National Investment Development Committee. A committee with the function to issue investment policy Regulations, regulations that foster investment in the country, but also to set plans on different programs to improve the investment climate in the country. This Committee replaces the former National Investment Steering Committee which operated under the Tanzania Investment Act of 2022. 

This Committee is constituted by the Prime Minister who serves as the Chairperson, the minister responsible for investment who currently falls under the Minister of State, President’s Office, Planning and Investment, who serves as the Vice Chairperson; also, the Minister responsible for foreign affairs, finance, land, Attorney General, General Commissioner for Tanzania Revenue Authority, Governor of Bank of Tanzania and the chief executive officer of the Investment and Special Economic Zones. 

2.4 Establishment of an integrated electronic system. 

Section 14 of the Act establishes an integrated electronic system that aims at promoting and facilitating investment in Tanzania. The system allows individuals and companies interested in investing in Tanzania or who are already investors, to register for a certificate of incentives and/or to process for acquisition of an investment license. Under this system, investors will have access to Government Authorities that are a cornerstone to business and non-business entity compliances, on the acquisition of licenses, and permits, such as TRA, Municipal Council, OSHA, NSSF, WCF, etc.  

This system adopts the former electronic system which was operated by the TIC, EPZA, and SPZ, but now the system is operated and managed by the Investment and Special Economic Zones. Under this current authority it is expected to facilitate easier processing of relevant regulatory permits and licenses wherever an investor can be, and ensuring investors can avoid the institutional bureaucracy from a quick electronic service portal thus saving time and promoting efficiency in public service. 

 2.5 Available Investment incentives to investors 

Section 19 of the Act introduces an incentive package offered to registered investors. Investors who have a certificate of incentive become entitled to a diverse incentive package that is granted by the government through different legal frameworks such as the Tax Act, The Custom Duty Act, and the Value Added Tax Act. They range from fiscal incentives to non-fiscal incentives, touching on the import and export of goods and services. A licensed investor in a special economic area is offered an incentive with the following package; 

• Exemption from customs duty, VAT, and other taxes imposed on raw material or capital goods 

• Exemption of corporate tax for an initial period of 10 years 

• Exemption of withholding tax on Rent, dividends, and interests for an initial period of 10 years 

• Exemption of withholding tax on interests on loans acquired from foreign countries. 

• Exemption of taxes, charges, and levies charged by the Local Government Authority on goods manufactured in the special economic zone for 10 years. 

• Exemption of Custom Duty, Value Added Tax, and other taxes to be paid on importation of one motor vehicle for administration services, motor vehicle to carry patients, fire trucks, and two motor vehicle buses for transportation of employees within the special economic zone. 

• Business Visa for employees during entry for two months.  

• Exemption of Added Value Tax on services such as Water, Electricity, Gas and Telephone 

• Exemption of Added Value Tax on construction tools and services. 

 2.6 Establishment of the Land Bank 

Section 23 of the Act establishes a Land Bank as a database to monitor and manage all lands that are designated to be areas of Investment. The role of the Land Bank is to obtain or pinpoint potential areas suitable for different economic activities to ease the availability and flexibility for investors to acquire land for intended projects. Obtaining land by Investors has been a big hustle as most are foreigners who are new to the Tanzanian environment, hence this Land Bank will ensure investors receive proper guidance to acquire land for investment.  

Before the introduction of this law, the Land Bank was not there under the investment regime. It’s establishment comes with various tactics that are a turnup to prospective investors, as the Land Bank will have in its list three categories of land;  

1. the first category will be all designated lands,  
2. land which is acquired for investment purposes,  
3. land that is privately owned.  

But also, the Land Bank will have the option to grant land either by Derivative right or periodic lease. These are projected and effective ways to effect land acquisition with the good name of fostering investment in the country. 

2.7 Establishment of the Special Economic Zone 

Section 25 of the Act establishes the Special Economic Zone; designated areas special for promoting and attracting investment in strategic or priority economic activity to encourage competition, production for foreign markets, and increasing employment opportunities. 

The Act identifies the Special Economic Zone to comprise areas such as; the Export Processing Zone, the modern industrial park, free trade areas, free ports, tourism parks, agriculture areas, science and technology, and other areas that the Minister responsible for lands may declare.  

Areas that are declared in a Special Economic Zone, become under the control and supervision of the Customs Authority according to the laws governing custom matters, which the Commissioner General of Tanzania Revenue Authority has been conferred with power to issue guidelines on tax collection. 

In matters concerning export of goods produced within the Special Economic Zone. An investor must acquire relevant permits issued by the Customs Authority, pay required customs taxes, and abide by the export capacity which requires not exceed 20 percent of yearly production.  

2.8 License issued by the Special Economic Zone. 

Section 29 of the Act introduces three types of licenses to be issued by the Special Economic Zone. Which are, a license for the production of goods for foreign markets or domestic markets; a license for developing the Special Economic Zone, and a license for managing the Special Economic Zone. 

2.9 Investors’ right to repatriate income. 

Section 33 of the Act grants an investor the right to repatriate income from investment made here in Tanzania to a financial institution of his/her choice in a foreign country without facing restrictions from the government. The income includes profits and dividends derived from the investment, payment of loans acquired from foreign financial institutions, and salary income paid to foreign citizens. 

2.10 Protection against Nationalization of private property. 

Section 34 of the Act prohibits the nationalization of investors’ property or investments, by the government. The investors are protected from government nationalization waves as most African Countries underwent in the next few years after Independence. The Act tends to invest confidence in foreign investors to make substantial investments here in Tanzania without fearing the occurrence of nationalization policies. The Act comes to honor existing states’ policies and international treaties to encourage offshore investment and ownership of property. 

The Act clears out the air, that investors will receive prompt compensation for the portion of their investment in any nationalization scheme. Investors are also handed over channels to seek court redress, domestic and/or international tribunals when there is a move to nationalize what they have invested in the country. 

 2.11 Protection of individual property against deprivation through nationalization. 

Section 37 of the Act legitimatizes and affords opportunities to investors to secure a loan from a recognized bank(s) in Tanzania. This Act comes to introduce an eco-friendly environment for investors especially foreign investors who intend to make substantial investments but have a shortage of capital. Investors’ access to loans is going to be a tool to attract extensive and huge investment given that investors can expand their capital. The Act bestows the financial institutions to have the right while issuing such loans to investors, to have in position their officers to follow up, to ensure the manner of utilization is as requested by such investors.  

 2.12 Dispute resolution mechanism between investors and government institutions 

Section 38 of the Act establishes mechanisms to resolve complaints and disputes that emerge between investors and the government institution. 

Few facts on submitting complaints 

A complaint is submitted and determined by the Investment and Special Economic Zone. The Authority will determine the complaint within 30 days. While determining, the authority is required to involve all stakeholders in solving the complaints to reach a fair and righteous decision. The Act upholds the complaint procedures to be confidential, to protect the interest and internal matters of investors. After the decision is given a party who is still aggrieved with the decision of the Investment and Special Economic Zone is given room to appeal to the minister who is responsible with matters of investment.  

Handling of disputes  

The Act requires, that all disputes at first are to be tabled and negotiated by parties through amicable settlement. When negotiation fails parties have the option to refer the dispute to arbitration or to court. When the investor and the government institution have an agreement to refer their dispute to arbitration then either party will be bound to seek arbitration proceedings first before attempting to invite the court. This move is in line with the party’s autonomy to choose an independent organ (other than courts of law which are an integral part of the state) that will fairly deal with the party’s dispute without the authority that is expected to give out a decision from being pressured by other arms of the government. 

 3.0 CONCLUSION  

The Act brings a desired institutional change to deal with the shortfalls that featured in the former investment institutions, as it has currently done, by consolidating TIC, EPZA, and the SPZ to form a single investment institution that combines similar roles held by these former investment institutions, now to be fulfilled by the Investment and Special Economic Zone.  These reshuffles will boost administrative efficiency, and add effective customer service to investors, meanwhile it reduces the operational costs to the government. 

The Act also adopts the current legal framework, as such; the available incentives, the available rights and obligations afforded to investors, and the integrated electronic system that serves investors through an online window where applications for certificates of incentives and licenses from regulatory bodies are obtained. The Act is a safe flag as it embraces a mechanism that although it sets a new regime, the rights of the ongoing investors are still preserved. 

Disclaimer: 

     This publication has been prepared for information purposes only, and it 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 is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, Cymbell Attorneys, its partners, 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.  

Contact Information 

CYMBELL ATTORNEYS 

P.O BOX 11481 

Office No. 302-2, 3rd Floor, Plot 89, Block 45B,  

Victoria Noble Centre, Bagamoyo Road,  

Dar es Salaam- Tanzania 

Cell: +255 713 411 721 

Email: law@cymbellattorneys.com 

Website: https://tz.cmadvocates.com/  

The post Investing in Tanzania: The Creation of Tanzania Investment and Special Economic Zone Authority appeared first on Cymbell Attorneys.

Disclaimer: 

     This publication has been prepared for information purposes only, and it 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 is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, Cymbell Attorneys, its partners, 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. 

Contact Information 

CYMBELL ATTORNEYS 

P.O BOX 11481 

Office No. 302-2, 3rd Floor, Plot 89, Block 45B,  

Victoria Noble Centre, Bagamoyo Road,  

Dar es Salaam- Tanzania 

Cell: +255 713 411 721 

Email: law@cymbellattorneys.com 

Website: https://tz.cmadvocates.com/  

The post Proposed Amendment to the Labor Law in Tanzania appeared first on Cymbell Attorneys.

INTRODUCTION 

In different labor cases Parties have embarked on the wrong legal recourse of seeking their righteous compensation from termination of employment contracts. All labor disputes are addressed through Form No. 1 in the Commission for Mediation and Arbitration (CMA), identifying the nature of the claim. Each claim has a distinct condition and relief compared to the other, such as breach of contract compared to unfair termination. Some of the unsuccessful labor cases have been rooted in failure to distinguish and pursue the appropriate claim. 

MATERIAL FACTS OF THE CASE 

In the above case, the appellant was employed by the respondent permanently as an office administrator on the 6th of May 2016, but unfortunately, his contract was terminated after 3 Months, to wit on the 9th of August of 2016 due to economic constraints.  

The appellant filed a complaint to the (CMA) seeking compensation for unfair termination. The CMA pronounced termination was substantially and procedurally unfair and awarded the appellant 33,600,000.00. Dissatisfied with the decision, the respondent successfully revised the CMA decision by the High Court vide Revision No. 12 of 2017. The High Court stated that CMA had no jurisdiction to entertain the appellant’s claims that were based on unfair termination as the appellant had worked for less than six months with the respondent. 

DETERMINATION BY THE COURT OF APPEAL 

This time the appellant approached the Court of Appeal of Tanzania with two grounds, which one ground was abandoned later, bringing one ground of appeal “That the appellant having a permanent contract was not subject of limitation under section 35 of the Employment and Labor Relations Act No. 6 of 2004.” 

The Court ruled out that the provision of section 35 of the Act specifically deals with unfair termination, which bars an employee from instituting a claim for unfair termination in the CMA unless such person has served for a period of not less than six months.  

A dispute over termination from a specified employment contract finds its remedies in the claim of breach of contract, which is compensation for the remaining employment period. For an unspecified/permanent employment contract, an employee is required to seek unfair termination to obtain relief of 12-month remuneration, as provided under section 40 A and 40 (1)(c) of the Employment and Labor Relations Act Cap 366 R:E 2019, respectively. 

The court further stated an employee who has worked for less than 6 months cannot sue for unfair termination, but such an employee can access the CMA through other claims such as breach of contract for the specified period contract.  In this case, the appellant claimed through the referral Form No. 1 for unfair termination which could not yield success as he only offered a 3-month employment service. 

Furthermore, the court stated that the provision of section 35 of the Act deals with all types of employment contracts and does not identify certain contracts to be covered there. The provision also lays the condition necessary to claim for unfair termination, that is 6 months or more. 

CONCLUSION 

Therefore, an employee must work for at least 6 months or more to claim unfair termination; or rather if the contract is a fixed term contract it’s proper to resort to breach of contract since this nature of contract is not barred by section 35 of the Act. This case joins other landmark cases to hammer the restriction of employees who just offered less than 6 months of service not to embark on unfair termination. 

Disclaimer: 

     This publication has been prepared for information purposes only, and it 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 is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, Cymbell Attorneys, its partners, 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. 

Contact Information 

CYMBELL ATTORNEYS 

P.O BOX 11481 

Office No. 302-2, 3rd Floor, Plot 89, Block 45B,  

Victoria Noble Centre, Bagamoyo Road,  

Dar es Salaam- Tanzania 

Cell: +255 713 411 721 

Email: law@cymbellattorneys.com 

Website: https://tz.cmadvocates.com/  

The post Breach of Contract and Unfair Termination in Tanzania appeared first on Cymbell Attorneys.

Business entities, particularly ones dealing with finance related aspects tend to have the need to employ various finance and business software in order to facilitate their activities. This is especially true for the emerging FINTECH firms in the country which are likely to pay for software from foreign distributors.

A company may either lease, acquire or build software to facilitate its business and what option is selected mainly depends on the capital of the firm and the specific requirements of its business.

Some firms may find acquisition or building of software to be a more favourable option compared to leasing, however these are tied to a much higher initial costs and the need to constantly maintain said software. This has led to a situation where companies rely on paying for the license to use needed software as it is much less cost prohibitive and the responsibility to maintain and update such software is still left to the owner/distributor.

THE CASE FOR DOMESTIC SOFTWARE OWNERSHIP

Tanzanian firms with the expertise and capacity may consider building or acquiring software for licensing to cater to the emerging commercial space in Tanzania. Payment for the use of software may be preferable to a firm over acquisition but acquisition may be a more financially sound decision where the acquiring firm intends to license said software to several other firms with similar use cases and demand.

Since software is not permanently restricted to production capacity, as is the case for physical commodities, it can be replicated by the owner/publisher by however many copies are needed. For instance, for one to sell more oil, they need to drill more of it from the ground in order to address the demand. Where there is an increase in demand in a particular software, this requirement simply does not exist. Software is infinitely scalable and once it is built or acquired it can be supplied without production concerns.

Thus, the growing demand for financial and business software in Tanzania may be addressed with an adept enough firm.

Exclusive rights to software can only be fully sold once but it can be licensed forever to address whatever demand erupts. Currently there is a global silicon chip shortage. Manufacturers of various electronics such as computer hardware, mobile phones and even car makers are finding it excessively difficult to keep up with the demand for their products which has resulted in the increase of production costs and loss of potential income. This is simply not an issue that can directly affect a software manufacturer.

With this to consider, the number of clients one can secure for their software will dictate how much can be earned. Thus, owning of software and then licensing the same to clients may, over the long-term, be a much wiser financial decision than complete sale since financial gain, considering other business factors are optimal, is likely to be much higher. In conclusion, you can only transfer ownership once, but you can license forever.

Intellectual property protection considerations

The ownership of software in Tanzania carries a different sort of concern from having a user licence. The concern that owners of software in Tanzania must address is the protection of their valuable IPs from third parties who may wish to reproduce, sell or otherwise exploit the same without approval. Fortunately, Tanzanian laws do cater for the protection of software as intellectual property however it should be noted that such protection can only be offered where registration is done.

1. Patent.

A patent allows an owner of software to the rights of ownership and employment of the software for a specific amount of time and this is applicable to software that is an invention, new and involves an inventive step and is

industrially applicable as per Section 8 of the Patents (Registration) Act, Cap. 217.

Patenting of software is possible in Tanzania as per Section 18 and 28 of the Patents (Registration) Act, Cap. 217 where registration is sought to grant the right to the software owner to use and market their software in exclusion of other persons. And where third parties may wish to use said software then the same can be licensed by the owner as per Section 61 of the Patents (Registration) Act, Cap. 217.

Patents are also protected in Zanzibar as under the Zanzibar Industrial Property Act, 2008 as under Sections 6, 11 & 12.

2. Trademark.

A trademark can include the name(s), symbols, phrases and so on that are used in connection to a person’s software. Having a trademark is essential to the ownership of software since it allows for its recognition and distinction from other products.

The application for the registration to use a trademark is provided for under Section 21 of the Trade and Service Marks Act, 1986 and upon its grant, the owner of the trademark will be able to protect the software from attempts at mimicking its name(s), phrases or symbols.

In Zanzibar, the Zanzibar Industrial Property Act, 2008 as under Section 47 gives procedure for the registration of a trade or service mark in order to effect its protection.

3. Copyright

In Tanzania, copyright aims to secure published or unpublished software and the registration of the same is as provided for under the Copyright and Neighbouring Rights Act, Cap 218 for Tanzania Mainland and the Copyright Act, 2003 for Zanzibar.

Unlike patents and trade & service marks, copyrights are registered with the Copyright Society of Tanzania (COSOTA), for mainland, and Copyright Society of Zanzibar (COSOZA), for Zanzibar.

Tanzania is also a member of various international IP protection agreements and organizations including the African Regional Intellectual Property Organization (Oapi), African Intellectual Property Organization (Aripo), Patent Cooperation Treaty (PCT) and so on, which help to cater to the realization and protection of intellectual property rights.

Registration of patents and trade & service marks is to be done by the Zanzibar’s Business and Property Registration Agency (BPRA) or Tanzania Mainland’s Business Registration and Licensing Agency (BRELA).

Therefore, ownership of software in Tanzania is a possible venture as there exists a thriving and booming market and legal protection and recognition already exists to cater to the same.

THE CASE FOR USE OF SOFTWARE THROUGH LICENCE

Payment for the use of software may also be preferable to a firm in Tanzania over acquisition of the same. The reason for this is that acquisition is a financially sound decision only where the acquiring firm intends to license said software to several other firms with similar use cases and demand. Where a firm only needs to use a particular piece of software to facilitate its business it does not need to acquire such software but rather just pay for its use.

This makes sound business sense as it helps to keep the cost to income ratio of the firm at a minimum.

Licensing is what happens when a person “buys” software. Indeed, the transaction might be commonly termed as “buying” or “purchasing” but the traditional meaning of purchase or buy is to receive complete ownership of a particular thing or right through the payment of an agreed upon sum of money.

Where one pays money to use a particular software, for example Microsoft Office, what is being paid for is not the software but rather the right to use that software within the limitations of the terms and conditions attached to the use of said software.

Therefore, one does not acquire exclusive rights to do with a piece of software as they please after paying for the same. This is in essence the same principle that applies to other expressions of art such as songs, movies and books. The same way a book is not yours to copy, publish and sell without authorization is the same way you cannot do the same with software bought and paid for.

The global practice is that payment for the use of software is equivalent to payment for goods and services. Hence, the software manufacturer or distributor is in essence equivalent to a shopkeeper selling a bottle of water. Thus, to the manufacturer, money generated from such transactions are equivalent to business income.

In Tanzania, however, the position is different. The sale of software licenses, since the year 2019, is not regarded as the sale of business goods. In Tanzania, where a payment is made for software to a foreign owner or distributor such payment is regarded as royalty and not as an ordinary payment. Hence, the software is taken to have been leased as a copyright.

This was discussed at length in the case CELTEL TANZANIA LIMITED V. COMMISSIONER GENERAL (TRA) CIVIL APPEAL NO. 56 OF 2018 in which the Court of Appeal of Tanzania elaborated that the purchase of software is not a purchase of a product but rather it is equivalent to payment for royalties in exchange for the right to use a particular software as per Section 3 of the Income Tax Act, 2004 [Cap. 332 R. E. 2019].

Tax implications on payment for the use of software

Royalty payments, therefore, attract income tax against the software owner or distributor that is to be withheld by the purchaser since such payments have a source in the United Republic.

Foreign firms as well must consider this difference in consideration of payments for software. Since these payments are regarded as royalty, the selling firm must keep in mind that part of the payment (15%) must be withheld by the buyer. This is by meeting the revenue requirements that have been set up by the law. Firstly, a payment has to be reported in the financial statements of a company in order to allow the Tanzania Revenue Authority (TRA) to take note of the same.

Secondly, before full payment is made, an amount equivalent to fifteen percent (15%) of the payment must be withheld and eventually paid to the TRA as income tax. Section 82 and First Schedule Rule 4(b)iii of the Income Tax Act, 2004 [Cap. 332 R. E. 2019] provides that income tax to be withheld from payment of software is fifteen percent (15%). This is the amount that will be chargeable

One might wonder: Why is income tax being imposed and against whom? The answer is that since a foreign software firm is not a registered tax payer in Tanzania but still gains an income from Tanzania it has to pay tax. Hence, it is the responsibility of the purchasing firm to withhold that tax payment for the TRA and remit the same. If this is not done, the burden of tax is placed on the purchasing firm as per Section 84(3) of the Income Tax Act [Cap. 332 R. E. 2019]

“A withholding agent who fails to withhold income tax in accordance with Subdivision A must nevertheless pay the tax that should have been withheld in the same manner and at the same time as tax that is withheld.”

Thus, tax is always a factor that must be taken into account to avoid unforeseen expenses and/or liabilities.

Conclusion

Regardless of the path taken, a firm purchasing software needs to be sufficiently vigilant to make adequate provisions for withholding payments with the software distributor. With this in mind, an organization must always be certain of and cautious to ensure that a software-based agreement has sufficient provision for withholding payments. This is especially crucial for the purchasing firm since failure to withhold payment will lead such purchaser to be personally liable to pay that withholding amount to the TRA.

Hence, familiarity with Tanzanian revenue laws aids in the avoidance of being caught by surprise with unexpected tax consequences.

Important Notice:

This publication has been prepared for information purposes only, and it 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, Cymbell 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.

The post Intellectual Property: Differences Between Licensing and Ownership of Software in Tanzania. appeared first on Cymbell Attorneys.

The law has grouped insurance businesses into two main categories and these are:

1. General Insurance Business
2. Life Insurance Business

General Insurance Business

A general insurance firm determines its income from the insurance business after accounting for all insurance payouts made to its clients for the year against the premiums that were not paid. Simply speaking, for every client whose premium was not compensated such premium will be considered as a profit made by the insurance firm. The opposite is true i.e., for each client compensated such compensation shall be considered as an expenditure or expense against the total turnover of the firm.

It should be kept in mind that any other income made by the insurance firm will be computed as per the other provisions of the Income Tax Act [Cap. 332 R. E. 2019].

Treatment of income of a general insurance business can be observed under Section 58 of the Income Tax Act [Cap. 332 RE. 2019] which explains how income of a general insurance business is computed and thus taxed.

The inclusions into the business are listed to be

• Premiums received from clients of the business
• Payments received from re-insurer(s) of the business

The amounts to be deducted from income are

• Payments made to persons insured or re-insured by the business
• Premiums paid by the business to re-insurer(s)

Life Insurance Business

The life insurance business operates differently from a general insurance business in the sense that collected premiums are paid out to the insured or their associate. In a wider span, the Income Tax Act has listed the classes of life insurance as under Section 3 to include Insurance where the specified events are:

• Death of insured individual or their associate
• Personal injury or incapacity of the insured or their associate
• Insurance agreements lasting for five years or more
• Insurance agreements where the insured is to receive payment of a certain amount/amounts
• Or re-insurance of either or all of the above

As we have now established the classes of life insurance it is safe to say, as per Section 3 of the Income Tax Act, that a business carrying on those activities listed above is carrying on the business of life insurance.

Proceeding to the taxation of the life insurance business, Section 59 of the Income Tax Act provides light towards what is considered as part of income and expenditure in the life insurance business. Inclusions to income have been stated as under Section 59(2) a which provides that amounts that are included as income in other provisions of the Act will be regarded as income to a life insurance business.

However, the same sub-section expressly states under items (i) & (ii) that premiums paid into the business and also proceeds paid into the business by its re-insurer shall not be considered to form part of the income of the life insurance business for that year of income. The reason for this is that this sort of business pays out the premiums received at the occurrence of the events we saw above and thus cannot be considered as profits or income unlike in general insurance businesses.

With regards to deductions, Section 59(2) b provides that only the expenses of managing the investments of the life insurance business, including commissions, are deductible as under other provisions of the Income Tax Act. However, what amounts are not deductible can be observed as under items (i) & (ii) where the law provides that payments of premiums to re-insurer(s) and payments of proceeds to the insured or re-insured are not regarded as deductible expenditure since their vice versa were not regarded as income.

Finally, the law as under Section 60(1) of the Income Tax Act provides that the payments received to an insured or re-insured person from insurance will be treated in accordance with Section 31 of the Income Tax Act as compensation/recovery payments and shall be used in the calculation of the income of the person but subject to the provisions of Sections 58 & 59, that we have observed above, and Section 60(2) that we will analyze shortly.

Sections 60(2) & (3) of the Income Tax Act are based on the aspect of gains that are made as a result of receipt of payment from life insurance to an insured person. Simply, where a person receives more money from a life insurance compared to the amount that was paid as premium then it is regarded that they have received a gain (or profit) from that arrangement.

In such circumstances, if the gains were made from payments by an insurance firm/business that is a resident for tax purposes then they will be exempted from tax. However, if the payments were from a non-resident insurer then the gain will be included in calculating the income of the insured person.

CONCLUSION

Insurance businesses must exercise caution and vigilance in taking note that other provisions of the Income Tax Act and other tax laws remain in application to them. This means that compliance with all relevant tax, insurance as well as other applicable laws of the United Republic of Tanzania is a crucial consideration for the continuity of the business.

Important Notice:

This publication has been prepared for information purposes only, and it 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, Cymbell 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.

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Obtaining Work and Residence Permits for Foreigners in Tanzania

A resident permit is a legal document that permits a foreigner to reside in the United Republic of Tanzania. Meanwhile, Work permits allow foreigners to work or engage in business activities in Tanzania. One can apply for a resident and work permit by making and submitting an application to the Ministry of Home Affairs and Ministry of Labour, Youth, Employment and Person’s with Disability respectively. Work permits are processed by the respective employer on behalf of the foreign employee. 

RESIDENCE PERMIT 

Are issued by the Commissioner of immigration and are classified as follows; 

Class A – issued to self-employed foreign investors intending to invest in prospective areas like mining, business, forestry, industry, etc. Their application is done through Tic or directly to immigration headquarters.  

An investor eligible for a class A working permit can acquire a class A residence permit. 

This class is categorized into five other classes. 

Class B – issued to foreigners employed by companies or institutions, who possess technical skills or high-skill positions in Tanzania not available in the local market. This permit has to be requested before entering the United Republic of Tanzania. This permit is classified into, 

B-1 where this is given to persons who have been offered specific employment by a specific employer and have acquired qualifications and experience. 

B-2 is given to professionals, technicians, and associates professionals from EAC partner states as prescribed in the schedule to the EAC common market protocol (free movement of workers regulations) 

Class C – issued to missionaries, students, volunteers, parties in the case, witnesses in a case, researchers, and other retired individuals or those attending medical treatment. This permit must be requested before entering Tanzania. 

This class is specifically classified as follows; 

WORK PERMIT 

Foreigners who wish to work in Tanzania must comply with the requirements outlined in the Non-citizens (Employment Regulation) Act of 2015. According to the Act, it is illegal for foreigners to work in Tanzania without a valid work permit. To obtain a work permit in Tanzania, the applicant must submit an application to the labor commissioner. The person who wishes to employ a foreigner in Tanzania must submit an application which shall be subject to approval. There are several classes of work permits, as laid out under Section 13 (1) of the non-citizens (employment regulation), classified depending on the purpose of the work. These are elaborated below as follows; 

WORK PERMIT CLASS A 

These permits are issued to foreign investors who are self-employed and regarded as shareholders of the businesses or entities registered in Tanzania. A foreigner who wishes to invest may be registered with the Tanzania Investment Center (TIC) or the Export Processing Zone Authority (EPZA) for Tanzania Mainland. The work permit is valid for two years subject to renewal. Section 12 of the non-citizens (employment regulation) further provides that, that an investor can have a work permit for up to 10 years when the investment is of great value. 

WORK PERMIT CLASS B 

This permit is given to a non-citizen who has a specific profession. It is offered to highly skilled positions and includes doctors, accountants, teachers, engineers, experts in oil and gas, teachers and university lecturers and so forth. A person qualifying to work under class B must apply for a residence permit falling under class B.  

WORK PERMIT CLASS C 

This is issued to non-citizens in possession of all other professions. A non-citizen qualifying to work under this class must apply for a residence permit B. 

WORK PERMIT CLASS D 

This class is issued to a non-citizen who is employed or engages in registered religious and charitable activities. Such non-citizens can also receive a residence permit class C-1 

WORK PERMIT CLASS E 

This permit is issued to refugees; to persons who have acquired a refugee status in Tanzania subject to the Refugee Act. 

Basic requirements for the Work and Residence Permits: 

1. Justification letter
2. Dully filled application form
3. Two (2) soft copy of recent passport size photographs with blue background
4. Copy of a Valid Passport (Validity should not be below six months before expiry)
5. Scanned copies of original Academic/Professional certificates.
6. Translated documents and scanned copies of certificates before translation if any.

8. Detailed Curriculum Vitae/ Resume 
9. Employment/Engagement Contract 
10. Detailed Job Description.
11. Return on Employment of Non-Citizens (there is a specific form for this). The ratio is 1:10 foreign to local citizen respectively.
12. Industrial/Business/Operating Licence of the employing company 
13. Proof of payment of prescribed fee for Work Permit (Original Pay in Bank Slip) 
14. Proof of registration with NSSF and WCF and current contribution records from the Employer 
15. Certificate of Tax Identification Number (TIN) of the employer 
16. Certificate of Value Added Tax (if any) of the employer 
17. Current Tax Clearance Certificate of the employer 
18. Certificate of Incorporation/Certificate of 
19. Compliance / Registration of Companies, NGOs, 

20. Introduction letter authorizing employee of the Organization to apply and make a follow up of Work Permit application and copy of such employee’s Work Identity Card. 

It is important to note that the work and residence permits once granted are valid for a period of two years only subject to renewal after every such period to the maximum of five (5) years for foreigners employed in Companies in Tanzania. For Investors and self-employed being directors and shareholders of an existing entity the permits shall be valid for a period two years too subject to renewal for an unspecified time given that the company is still a going concern.  

Disclaimer: 

This publication has been prepared for information purposes only, and it 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 is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, Cymbell Attorneys, its partners, 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. 

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VISA APPLICATION 

A visa is an official document issued by the government of the United Republic of Tanzania through the immigration department that allows an individual applicant to enter, stay, or transit within Tanzania for a specified short period and purpose. VISA application is done online through the Immigration websites, regardless, the immigration reserves the right to require physical attendance of the applicant. There are categories of VISA’s issued to foreigners in Tanzania based on the purpose for entrance in the country.   

SINGLE ENTRY (ORDINARY/TOURIST) VISA 

This VISA is issued to a person who intends to visit Tanzania for tourism, holidays, family, conferences, meetings, health treatment, studies, leisure and any other activity legally recognized by the law in Tanzania. The applicant can stay in Tanzania for up to 90 days. 

Application requirements: 

Must have; a valid passport, 2 passport size photographs, return flight ticket, and provide itinerary, ticket, or tour operator package receipt. People traveling for specific reasons other than tourism must submit a letter from their organization or office. These include but not limited to volunteers, people attending meetings & conferences, studies, diplomatic, official and any other business not mentioned here. 

Visa applications for minors under 18 years traveling alone or with only one parent/legal guardians should be accompanied by a notarized letter, jointly signed by parents or legal guardians approving the minor to travel, A copy of their ID  

MULTIPLE ENTRY VISA 

This is issued to a person for a multiple purpose and the entry visa is valid for 12 months. The applicant can not stay in Tanzania for 12 months continuously, they must leave Tanzania every three months. 

Application requirement 

Must have; a valid passport, a recent passport size photo, letter explaining reasons for visit from respective ministry or institution, return flight ticket, marriage certificate if the applicant returns to visit his/her spouse, Documents of the Company like TIN, VAT, Registration Certificate, Certificate of Incorporation, Memorandum etc and any other evidence to prove that the applicant is bound to travel frequently into the United Republic of Tanzania. 

BUSINESS VISA 

Issued to foreigners who want to come to Tanzania for the purpose of temporarily conducting business, trade, professional or assignment. This visa allows a foreigner to stay in Tanzania for only 90 days and it is not extendable. 

Application requirement 

Must have a valid passport at least for 6 months, a contract or document that shows the applicant comes for business issues, and a return flight ticket. 

STUDENT VISA 

This visa is issued to international foreign students who want to pursue studies or research in Tanzania. The applicant is only allowed to stay for 2 years. 

Application requirement 

Must have; a letter issued by the university acknowledging the purpose of entrance to be for studies and a copy of a valid passport. 

TRANSIT VISA 

This visa is issued to an applicant who transits through Tanzania to a place of destination.  

Application requirement 

Must have; a copy of passport and biographical data, ongoing flight ticket and an entry visa or onward ticket to the intended country of destination. 

GRATIS VISA 

This visa is issued to diplomatic, service and official passports holders, who are on duty in Tanzania. This visa is issued on single or multiple entries. Holders of UN, SADC, AU Laissez-Passer and other International Organizations recognized by the United Republic of Tanzania are granted gratis visa, except when travelling on non-official capacity in which they are subject to pay for prescribed visa fees. 

• NB: There are countries in which their nationals are exempted from applying for visas in Tanzania. This includes East African community states and so forth. The following countries their nationals are not required to make a Visa application; Antigua & Barbuda, Anguilla, Ashmore & Certie Island, Bahamas, Barbados, Bermuda, Belize, Brunei, British Virgin Island, British Indian Ocean Territory, Botswana, Cyprus, Cayman Island, Channel Island, Cocoas Island, Cook Island, Christmas Island, Dominica, Falkland Island, Gambia, Ghana, Gibraltar, Grenada, Guernsey, Guyana, Heard Island, Hong Kong, Isle of man, Jamaica, Jersey, Kenya, Kiribati, Lesotho, Malawi, Montserrat, Malaysia, Madagascar, Malta, Mauritius, Macao, Mozambique, Nauru, Naue Island, Norfolk Island, Namibia, Papua new Guinea, Rwanda, Romania, Ross Dependency, Samoa, Seychelles, Singapore, Swaziland, Solomon Island, St. Kitts&Navis, St. Lucia, St. Vicent, St. Helana, South African Republic, Trinidad & Tobago, Turks & Caicos, Tokelan, Tonga, Tuvalu, Vanuatu, Uganda, Zambia and Malawi. 

PASS APPLICATION 

This is a document that entitles a foreigner to enter and reside in Tanzania for not more than 2 years, subject to the purpose for which the pass is sought. Just like visas, passes are issued by the immigration department through the Commissioner. There are various types of passes as highlighted below; 

MIGRANT PASS 

This is issued to people of African descent from bordering countries who migrated into the United Republic of Tanzania before 1972 and continued to reside without having a passport or identification of any other country. 

STUDENT PASS 

This pass is categorized into two. The first one is Student Pass I which is issued to persons studying in approved training establishments. These include children of persons legally residing in the country who are above the age of majority (18 years). This class requires a candidate to submit the following during application; 

1. Certificate of registration of institution 
2. admission letter and joining instruction 
3. evidence of sponsorship/scholarship and evidence of enrolment 

The next class is Student Pass II, this class is issued to children of persons legally residing in the country being below the age of majority and have not yet been endorsed in their parents’ residence permits but studying in approved training establishments including kindergarten, primary, secondary, and higher learning institutions. The application process requires an admission letter, evidence of sponsorship, parent consent if under guardian and valid resident permit of the parent.  

VISITORS PASS 

This is issued to prospective visitors who are foreigners and wish to enter Tanzania and do either of the following; spending holidays, traveling, appearing before a court of law, obtaining medical treatment, etc. This Pass allows a foreign individual to stay in the country for not more than 90 days. East African community members can stay up to six months. 

BUSINESS PASS 

This is issued to a person from a country whose nationals do not require Visa to enter Tanzania. It’s issued to conduct temporary special assignments or short-term professional roles like auditing, trade, fixing machines, conducting feasibility studies, etc. The Visa is valid for 90 days and it is not extendable. 

RE-ENTRY PASS 

This is issued to a foreigner who resides in Tanzania and intends to re-enter Tanzania after traveling outside. It is issued for a maximum period not exceeding the duration of the permit. 

SPECIAL PASS 

This is issued to a foreigner living or entering the United Republic of Tanzania, to allow him to apply for and obtain a residence permit, pass, complete any immigration formality or regulate immigration status after expiry. 

DEPENDENT PASS 

This pass is issued to dependent wife, children, or near relative. A male child who is above 18 years old is not treated as a dependent person. The application process requires, a copy of the applicant’s valid passport, passport of the dependent, copy of birth certificates, security bond form, copy of marriage certificate for dependent wife. 

CONCLUSION; A non-citizen who intends to fly into Tanzania must make sure that he/she has fulfilled the required conditions to meet his/her purpose of visit. Possession of a Visa for United Republic of Tanzania does not provide automatic right of entry for the holder into the Country. The Immigration Officer at the port of entry may refuse entry to any person, if he is satisfied that such a person is unable to fulfil the immigration requirements or that such person’s presence in the United Republic of Tanzania would be contrary to national interests or security. 

Disclaimer: 

This publication has been prepared for information purposes only, and it 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 is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, Cymbell Attorneys, its partners, 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. 

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All business entities in Tanzania are required to file tax returns to the Commissioner of Tanzania Revenue Authority (TRA) according to Section 91 of the Income Tax Act R.E 2019 and Section 46 of the Tax Administration Act R.E 2019. This includes filing Pay as You Earn (Payee), withholding, Skills development levy, VAT, and income tax. This requirement is mandatory, and failure to comply attracts penalties for the business.

Now business owners should be aware that tax returns are required to be filed regardless the business entity has not yet registered itself for a Tax Identification Number (TIN) and obtained Tax Clearance Certificate. This comes after a TRA public notice was issued to remind taxpayers of the duty to make the filings to avoid penalties and other encumbrances.

Business entities that are not operating or have ceased to carry out their usual work operations but are still recognized by TRA as existing taxpayers are required as well to make filing of tax returns. Those with no TIN or with TIN but the business is not in operation yet are not released from filing tax returns. A taxpayer must make sure tax returns are filed on time. To those unaware, this may attract a huge penalty in time.

The registration systems for TRA and the Business Registrations and Licensing Agency (BRELA) operate harmoniously. Once an entity is registered with BRELA, TRA receives the same updates for the existence of a business. Even if a taxpayer has not attended TRA, the authority still holds the business entity accountable for tax payment in Tanzania, as required under Section 3 of the Income Tax Act.

A taxpayer must comply to file returns because by the time penalty(s) accrues, he/she cannot proceed with other regulatory compliances such as obtaining of tax clearance certificate unless penalty(s) is cleared or settles with the commissioner for TRA. Business entities that have not yet complied with the filing of tax returns must strive to make sure the business is in compliance and has paid the required tax dues if any. When the filling process is stiff it’s important to resort to professional assistance.

Disclaimer:

This publication has been prepared for information purposes only, and it 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 is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, Cymbell Attorneys, its partners, 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.

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