TRADE POLICY REGIME

IMPORT LICENSING   

As stipulated  by the  OGL Notice  1993 all goods may be imported into Tanzania  without a specific Import Licence except for a few goods specified  in the  Negative List. Importers will be required to fill in an Import Declaration Form (IDF) which consists of six copies for every consignment imported in the country irrespective of magnitude or value. 

This arrangement  cover all import financing facilities including the Bank  of Tanzania  (BOT) allocation, the Open General Licence (OGL) in  it sold form, Commodity Import Support (CIS), Retention Scheme, Foreign Currency Accounts, Equity Contribution, BET/SUKAB arrangements, Supplies  Credits, Seed  Capital, Barter protocols. COMESA and  the Bureau  System plus  any other  mode of financing that may be put in place. 

Imports have  to be  inspected before  shipment and issued with a Clean Report  of Findings (CRF). Authorised inspection agents are SGS and  Cotecna. SGS  is the authorised agency for Africa, which  would cover Mauritius also. 
 
IMPORT CONTROL AND PROCEDURES/REQUIREMENTS  

Personal effects including binoculars, cameras, and film may be imported (temporarily) free of duty.  A customs bond may be demanded from visitors bringing in video/filming equipment, radios, tape recorders and musical instruments to ensure the goods are re-exported. 

Firearms require a special permit.  Liquor (1 pint), tobacco (20 cigarettes), or (50 cigars) or (250 grammes) are tax free. 

Imports into Tanzania are subject to compulsory quality inspection and price comparison by the General Superintendence Company Ltd.  The cost of presenting goods to the unpacking inspection agency for repacking and handling is borne by the seller. 

The following steps demonstrate import procedures 
Box: Import Procedures: 
  

1    Importer :  Obtains from supplies relevant number of proforma invoices i.e. one proforma for imports up to $400,000, three proforma for imports above $400,000, but not exceeding $1 million and for imports above $1 million evidence of international competitive bidding (ICB). 

2   Importer :  With the proforma invoices or evidence of  international competitive bidding obtained where applicable, the importer obtains Import Declaration Form (IDF) from a commercial bank of Bureau, pays the fees and completes all six  copies. 

3   Importer :   Submits all 6 copies of IDF to authorised  dealer and pays inspection fees.  

4   A/Dealer :  Dispatches the 6 copies of the IDF as indicated hereunder. 

                  - Original and customer copy handed to importer. 

                  - Retain Authorised dealer's copy. 

                 - Remaining copies dispatched to BOT. 

5  Importer :  Establishes Letters of Credit or any suitable form of payment in favour of the supplier, on  the basis of the Customer's copy/Authorised dealer's copy of IDF. 
  

6   PSI Company :  Inspects goods at the port of shipment and issues a Clean Report of Findings (CRF), then  distributes the copies to BOT and Supplier.  

7   BOT :   Submits duly stamped and signed copies of CRF to TAX ASSESSORS.  

8   Tax Assessor  Based on the CRF, the Tax Assessment Notice (TAN) is prepared for distribution to Customs,  BOT and Importer.  

9   Importer :  Submits the TAN copies together with Original IDF and CRF to Customer and pays import duties.  

10  Customs :  Collect the import duties and certifies the TAN as paid.  

11  Customs :  On clearance of goods, Customs department  forwards four copies of certified TAN to the TAX ASSESSOR together with duly completed  original IDF.  

Note    1     Tax Assessors should present TAN, CRF and IDF to BOT in manner that matches all the IDFs  issued with their respective TANs and CRFs. 
              
In case of PART-SHIPMENT the importer retains the "Original" IDF until the last part of the 
consignment is cleared. The Tax Assessor is supported to keep track of such arrangements so  as to be able to forward a complete set and regular reports to BOT/Treasury. 
                   
In case of cancellation of the PART-SHIPMENT order, such an importer will be compelled to  surrender the "original" IDF to the Customs department. 
 

Cotecna Inspection S.A (COTECNA)  

Importers are required to submit to commercial banks three copies  of proforma invoices given to them by suppliers. The documents  should contain details on the quantity, nature and specification  of goods, mode of transport to be used in importation of the goods, cost, freight and other charges as well as the country of origin  of the goods. All such details should be duly filled in the  specific Import Declaration Forms (IDF) available from Commercial  Banks. Foreign suppliers are required to give inspection agencies at least a ten day notice before the intended shipment, giving  details on a place and date where goods could be inspected physically. 

The supplier should furnish the inspection company with copies of  the proforma invoice, a letter of credit where applicable, a  purchase contract and all other relevant documents. 

Upon completion of the inspection the agency is required to issue  a report of findings. A Clean Report of Finding (CRF) must be  issued to a supplier if the final invoiced price and freight rates are found to be acceptable and the inspection is satisfactory. 

A Non-Negotiable Report of Finding would be issued where the  inspection reveals discrepancies and the supplier had failed to rectify the situation. 

The following goods are exempt from such inspection:- 

1. Gold, precious minerals, explosive, military arms and ammunitions, live animals, frozen foods, commercial samples, personal effects  of returning residents (including one used motor vehicle) and  goods returned after repairs abroad. 

2. Goods bought by the Zanzibar Government and Zanzibar based  importers for direct importation to Zanzibar 

3. Crude Oil 

4. Supplies to diplomatic missions, UN organizations, religious bodies and charitable organizations. 

5. Goods declared in transit under the Customs Road Transit  Document (CRTD) 

6. Consignment with value in Proforma Invoice of less than US$ 1000. 

NOTE: 

Part-shipment in smaller lots against a Proforma Invoice of US$ 1000 or above is subject to pre-shipment inspection, irrespective of the  value of such smaller lots. All containerized imports are subject to pre-shipment inspection irrespective of value.   

TAX ASSESSMENT AND TAX COLLECTION IN IMPORTS  

The original Report of Findings given to the supplier by the inspection agency to the importer through the correspondent bank  where together with a dully filled Import Declaration Form (IDF),  are used by the Inspection Agency for issuing a Tax Assessment Notice (TAN). After settlement of taxes importers or their agents  would lodge at the customs all the documents, including the TAN  document endorsed "PAID", for goods clearance. Clearance of goods is processed accordingly after cross-checking the documents and  an account statement received directly from the National Bank of Commerce (NBC) which for the time being has been appointed by the  Government as the sole agent for collection of import duties and taxes. 
 

CUSTOMS DUTIES  

Import duties  are levied  on most  goods entering Tanzania at ad valorem rated  between 20 and 60 per cent. The following is given as an indication, but duties for specific items should be checked with Customs Tariffs 

20%: machinery, electrical appliances, equipment, etc. 

30%: raw materials, food grains, minerals, etc. 

40%: consumer goods including processed foods, utensils, etc; 

60%: "luxury" consumer goods, including jewellery, textiles, etc. 

Sales tax  and excise  duties (or  sometimes both  together)  are levied  on   imported  goods  and  on  domestically  manufactured articles. For imported goods, these taxes are levied on the value including import duty. 

Sales tax is levied at four different rates: 0, 21, 31 and 40 per cent, with  luxury goods  such as  consumer durables  paying  the highest rate.  It  is  also  levied  on  some  services  such  as telephone and electricity. 

Excise duties  may be  divided into  two types. First, duties are payable  on   the  traditional  excisable  commodities,  such  as alcoholic drinks and tobacco, at a variety of rates. These duties often include  a "specific"  as well  as an ad valorem element - 
for example,  the duty on certain cigarettes is 50 per cent, plus TSh, 1,500  per thousand.  Second, excise  duties  are  levied  in addition to sales tax on certain luxury items, at rates of 35, 60 or 85 per cent. The highest rate applies to cosmetics; When sales tax is included as well, the tax on these items is 125 per cent.   

EXPORT CONTROL AND REQUIREMENTS  

A licence is required to export goods from Tanzania.  The  statutory provisions in this regard are contained in the Export  Control Ordinance, CAP 293, and the Exchange Control Ordinance,  CAP 294. 

Exporters in possession of a certificate or registration issued  by the Bank of Tanzania.  Submit the order from the buyer,  commercial invoice,letter of credit and a CD-3 form (pre-shipment  declaration of exports) to the commercial bank where they maintain an account.  With the Bank's endorsement, these are then submitted to the Board of External Trade, which issues an export licence. Licences are issued either for individual consignment or as  "blanket licences" valid for a particular type and quality of  exports for a given calendar year.  

TRADE AGREEMENT AND ARRANGEMENTS  

BILATERAL AGREEMENTS 

(i)  Agreement on Avoidance of Double Taxation, 1979.  It is valid   for indefinite period. 

(ii) In July, 1995, the Indian Merchants Chamber, Bombay, and the  Tanzanian Chamber of Commerce, Industry and Agriculture (TCCIA)  signed an agreement on co-operation.  

TRADE POLICIES AND PRACTICES BY SECTOR 

TRADING PRACTICES 

The major  commercial/trading  cities  include.  Dar  es  Salaam, Zanzibar, Arusha, Morogoro Moshi, Mwanza, Mbeya and Iringa. Many  importers prefer to use the service of an import agent/wholesaler who  knows  his way  around  the  bureaucratic system. Value added  Tax (VAT) of up to 20% now is applicable throughout Tanzania. 
  
TRADE DISPUTES AND CONSULTATIONS  

From the text of the "NATIONAL INVESTMENT (PROMOTION AND - - PROTECTION) ACT 1990"  

ARBITRATION 

29.-(1) Where  any dispute  arises between a foreign investor and the government  in respect of any approved enterprise, all effort shall be  made through  mutual discussions  to reach  an amicable settlement. 

             
(2) Any  dispute between  the foreign investor and the Government in respect  of an  approved  enterprise  which  is  not  amicably settled through mutual discussion may be submitted to arbitration 

       
(a) in accordance with the rules and procedure for arbitration of the  International   Centre  of   the  Settlement  of  Investment Disputes; or 

(b) within  the frame  work  of  any  bilateral  or  multilateral agreement on  investment protection  to which  the Government and the country of which the investor is a national are parties; or, 

(c) in  accordance with any other international machinery for the settlement of investment disputes agreed by the parties. 

(3) An approval of any enterprise may specify the particular mode of arbitration to be resorted to in the case of disputes relating to that  enterprise and  such specification  shall constitute the consent of  the Government  or any  agency  thereof  and  of  the 
investor to submit to that forum.