tanzania tourism development levy

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1.  Canada - Tanzania Income and Capital Tax Treaty (1995)

2.  Denmark - Tanzania  Income and Capital Tax Treaty  (1976) 

3.  Finland - Tanzania  Income and Capital Tax Treaty  (1976)

4.  India - Tanzania  Income Tax Treaty (1979)

• Decided tax Cases

Decided tax Cases 2007

• BIDCO Oil and Soap Ltd No 89 of 2007.2 January 2013
• ISGNIA LTD VS COMM
• ISSIONER GENERAL
• MS Skylink Travels 7 tOPURS Tt) Civil No  8 of 2007.2012

Decided tax Cases 2008

• Mbeya Cement Company Ltd No 19 of 2008.31 Decemeber 2012
• Samson Ngw'alida No. 86 of 2008.28 December 2012

Decided tax Cases 2019

• Civil Appeal No. 81 of 2019 Pan African Energy Tanzania LTD vs Commissioner General, TRA
• Civil Appeal No. 89 of 2019 Geita Gold Mining Limited vs Commissioner General, TRA
• Civil Appeal No. 117 of 2019 Vodacom Tanzania PLC vs Commissioner General, TRA
• Civil Appeal No. 174 of 2019 Tanzania Tobacco Processors Limited vs Commissioner General, TRA
• Civil Appeal No. 211 of 2019 Star Media (Tanzania) Limited vs Commissioner General, TRA
• Civil Appeal No. 217 of 2019 Jovet Tanzania Limited vs Commissioner General TRA
• Civil Appeal No. 218 of 2019 Kilombero Sugar Co. Ltd vs Commissioner General, TRA

Decided tax Cases 2020

• SHOPRITE CHECKERS (T) LIMITED VERSUS THE COMMISSIONER GENERAL, TANZANIA CIVIL APPEAL NO. 307 OF 2020
• Civil Appeal No. 57 of 2020 Singita Trading Store EA Limited vs Commissioner General, TRA
• Civil Appeal No. 58 of 2020 Ophir Tanzania (Block 1) Limited vs. Commissioner General, TRA
• Civil Appeal No. 107 of 2020 Vodacom Tanzania PLC vs Commissioner General, TRA
• Civil Appeal No. 172 of 2020 Pan African Energy Tanzania Limited vs Commissioner General, TRA

Decided tax Cases 2011

• APPEAL NO[1]. 7 TRA VS NMB[1]correct
• APPLICATION  NO. 6 OF 2011BRAEBURN SCHOOL (T)  LTD
• PEMBE MILLS VS TRA APPEAL NO 10 OF 2011
• TBL_Vs_COMMISSIONER_GEN. 2 0F 2011
• Civil Appeal No. 146 of 2021 Tanga Cement PLC vs Commissioner General, TRA
• Civil Appeal No. 163 of 2021 Q-Bar Limited vs Commissioner General, TRA
• Civil Appeal No. 265 of 2021 Mlimani Holdings Limited vs Commissioner General, TRA
• Civil Appeal No. 356 of 2021 Mwenga Hydro  Limited vs Commissioner General, TRA
• Civil Appeal No.159 of 2021 Dominion Tanzania Limited vs. Commissioner General, TRA

  Decided tax Cases 2012

• APPEAL  NO. 8 OF 2012 MALAREX AGENCY (T)Y LTD
• Poseidom Enterprises Ltd Fruit De la Me Ld Kitamon Fishing Company Bakari Foods Ltd No. 12 of 2006.28 Desemba, 2012
• Roshani Meghjee & Co Ltd  Appeal No 49 of 2008.28 Desemba 2012

Decided tax Cases 2014

• TRA v Chevron Tanzania Ltd ( Appeal No. 78, 2014)

Decided tax Cases 2015

• TRA v Buryanhulu Gold mine Ltd (Appeal No. 89 & 90 of 2015)
• TRA v African Barrick Gold Mine PLC (Appeal No. 128 of 2013 dated 9th July 2015)
• TRA v Geita Gold Mining Limited (Civil Appeal No. 141 of 2015)
• TRA v BP Tanzania (Civil Appeal No. 125 of 2015)
• TRA v The Board of Trustees of the National Social Security Fund (NSSF) - Income tax Appeal No. DSM 16 OF 2015
• Civil Appeal No. 78 of 2015 North Mara Gold Mine Limited vs Commissioner General TRA

Decided tax Cases 2017

• Civil Appeal No. 132 of 2017 Geita Gold Mining Limited vs Commissioner General TRA
• Civil Appeal No. 314 of 2017 Access Bank Tanzania LTd vs Commissioner General, TRA

Case Notes on Decided Tax Cases

This section consists of various tax laws which oversee taxation process in Tanzania. It consists of the main Laws, Regulations and Finance Acts. The main tax laws are to be read in conjunction in order to achieve the desired goal of the provisions

Finance Acts

This section consists of Finance Acts which provide changes in tax laws made during a particular fiscal year.

Finance Act 2007 Finance Act 2008 Finance Act 2009 Finance Act 2010 Finance Act 2011 Finance Act 2012 Finance Act 2013 Finance Act 2014 Finance Act 2015 Finance Act 2016

Finance Act 2017

Finance Act 2018

Finance Act 2019

Finance Act 2020

Finance Act 2021

Finance Act 2022

Finance Act 2023

The Interpretation of Laws(The Rectification of Printing Errors) (The Finance Act,__2022) Order,2022)

Main Tax Laws

This section consists of the main tax laws. These are the fundamental laws to be read in conjunction with their respective Regulations and Finance Acts

Tax Administration Act, Cap 438 R.E 2019

Income Tax Act, Cap 332 R.E 2019

The Value Added Tax Act, Cap 148 R.E 2019  

The Port Service Charges Act, Cap 264 R.E 2019

The Motor vehicle (Tax Registration and Transfer) Act, Cap 124 R.E 2019

The Airport Service Charges Act, Cap 365 R.E 2019  

The Road and Fuel Toll Act Cap 220 R.E 2019  

The Stamp Duty Act, Cap 189 R.E 2019  

The East African Community Customs Management (Amendment) Act, 2011

The East African Community One Stop Border Post Act, 2016

The Gaming Act, Cap 41 R.E 2019 

The Foreign Vehicle Transit Charges Act, Cap 84 R.E 2019 

The Written Laws Miscellaneous amendments) (No. 2) Act, 2019

The Excise (Management and Tariff) Act, Cap 147, R.E 2019

The Tanzania Revenue Authority Act, Cap.399 R.E 2019  

The Customs (Management and Tariff) Act [CAP. 403 R.E. 2019]

The East African Community Customs Management [Rev.2017]

The Vocational Education and Training Act [CAP.82  R.E. 2019]

Other tax laws

The Tax Revenue Appeals Act, Cap 408 R.E 2019  

The Hotels Act Cap. 105  

The Oil and Gas Revenues Management Act, Cap 328 R.E 2019

Local Government Authorities (Rating) Act, Cap 289 R.E 2019

Local Government Finances Act, Cap 290 R.E 2019

Regulations

This part consist of regulations made by the Minister for matters authorized to be made or prescribed and for better carrying into effect of the principles, purposes and provisions of the respective Acts.

Regulation under the Tax Administration Act

The Tax Administration (General) (Amendment) Regulations, 2022

The Tax Administration (Remission of Interest and Penalties) (Revocation) Regulations, 2021

The Tax Administration (General) Regulation, 2016

The Tax Administration (Transfer Pricing) Regulations, 2018

The Tax Administration (General) (Amendment) Regulations, 2017

The Electronic Revenue Collection System 2017

The Electronic Tax Stamps Regulations, 2018

The Tax Administration (Registration of small vendors and service providers) Regulations, 2020 

Regulations under the Income Tax Act

The Income Tax (Exemption) (Expatriates Employees) (Extension of the Lake Victoria Pipeline Water Supply Project to Tabora, Nzega and Igunga towns) (Package II) (M/S Larsen & Toubro Limited-Shriram EPC Joint Venture) Order, 2022

The Income Tax (Registration of Non-Resident Electronic Service Suppliers) (Amendment) Regulations, 2023

The Income Tax (Registration of non-resident Electronic Service Providers) Regulations, 2022

The Income Tax (Transfer Pricing) Regulations, 2014

The Income Tax Regulation Transfer Pricing Guid elines

Regulations under VAT

The Value Added Tax (General) (Amendment) Regulations, 2023  

The Value Added Tax (Registration of Non-Resident Electronic Service Suppliers) (Amendment) Regulations, 2023

The Value Added Tax (Registration of non-resident Electronic Service Suppliers) Regulations, 2022

The Value Added Tax (Exemption Management Procedures) Regulations, 2021

The Value Added Tax (General) (Amendment) Regulations,2021

The Value Added Tax (General) Regulations, 2015  

The Value Added Tax General Regulation, amendments, 2018

The Value Added Tax Exemption Monitoring Procedures) Regulations, 2018

Regulations under the EAC Customs Management Act

The E AC customs Management (Duty Remission) Regulations, 2008 The  EAC customs Management Regulations, 2010 The  EAC customs Management (compliance and enforcement) Regulations, 2012

The  EAC One Stop Border post Regulations, 2017

Protocols and rules

Protocol on the Establishment of the East African Customs Union The East African Community Customs Union (Rules of Origin) Rules

Other regulations

The Gaming (Amendment) Regulations 2023

The Gaming (Internet Gaming) Regulations, 2022

The Gaming (Amendment) Regulations, 2022

The Excise (Management and Tariff) (Licensing and Administration of Manufacturers of Excisable Goods and Denatured Spirits (Amendment) Regulations, 2022

The Laws Revision (The Rectification of Printing Errors) (The Tanzania Revenue Authority Act, Revised Edition, 2019) Order, 2021

The National Payment Systems (Electronic Money Transaction Levy) Regulations, 2022

The Public Finance (Amendment) Regulations,2022

The excise (Management and Tariff) The Films and Music Products (Tax Stamps) Regulations 2013

The Road Traffic (Motor Vehicles Registration) Regulations , 2001

The Road Traffic (Motor vehicle Registration) (Amendment) Regulations, 2014

The Road Traffic (Motor Vehicles Registration) (Amendment) Regulations, 2017

The Fire and Rescue Force (Safety Inspections and Certificates (Amendment) Regulations, 2017

Tourism Development levy Regulation, 2013

The Interpretation of Laws (The Rectification of Printing Errors) (The Finance Act,__2022) Order, 2022)

Calculators and Tools

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KPMG Personalization

• Tanzania: Tax measures in Finance Act, 2022

Finance Act, 2022 is effective 1 July 2022

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Parliament has approved the Finance Act, 2022 to impose and alter certain taxes, duties, levies, and fees, and to amend certain laws relating to the collection and management of public revenues.

Finance Act, 2022—effective 1 July 2022—includes the following tax measures.

• The definition of the word “business” is broadened to include transactions carried out through the internet or digital marketplace—meaning that such transactions will now be subject to taxation in Tanzania.
• Thin capitalisation rules are more aggressive.
• The withholding tax rate is reduced to 10% on royalty payments to nonresident providers in the film industry.
• The Minister of Finance may grant a value added tax (VAT) exemption on goods or services supplied for the implementation of special strategic investments. 
• Non-residents can now be registered for VAT.
• Non-governmental organisations (NGOs) must have their supplies and imports of goods and services duly approved for purposes of qualifying for VAT exemption.
• The scope of capital goods qualifying for VAT deferment is expanded.
• There are amendments to the VAT exemption schedule.
• There are changes to the Excise (Management and Tariff) Act.
• A new Section 37A requires every taxpayer required to file a tax return to do so electronically on or before the due date of filing the respective tax return (with some exceptions).

Read a July 2022 report [PDF 2.74 MB] prepared by the KPMG member firm in Tanzania

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.

Government mulls one stop shop for tourism tax issues

The minister for Natural Resources and Tourism, Dr Pindi Chana speaking in past event. PHOTO | COURTESY

By  Zephania Ubwani

What you need to know:

• While some tourism service operators consider the charges (taxes, fees and levies) to be “too high” others are bothered by the payment procedures

Arusha. A one stop shop for tax clearance in tourism and tourism-related services has been mulled.

This will, among others, ensure the visitors to the national parks and other sites are served promptly with minimum red tape.

“To address the anomaly, there will be a one stop shop for payment of all levies,” said the minister for Natural Resources and Tourism Pindi Chana.

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She told the heads of departments and agencies under the ministry that she was aware of complaints over the settlement for such charges. While some tourism service operators consider the charges (taxes, fees and levies) to be “too high” others are bothered by the payment procedures.

Dr Chana, who was speaking here this week, could not elaborate more on the proposed system but hinted it would be rolled out soon.

“The ministry has started to work on this. We will put in place a system where all categories of payments will be settled at one centre”, she said.

She said this was among the key decisions made at the 13th meeting of the Tanzania National Business Council (TNBC) in Dodoma.

The ministry was also going through laws and regulations with the aim to improve the Tourism Development Levy (TDL) payment system. The minister said the realignment of taxation in the hospitality sector will also involve the local government authorities.

The latter have often been blamed for imposing levies on the tourists traversing through their districts to the sites. Years’ long efforts to remove levies charged on the transiting tourists have been futile because the local councils could not act.

Dr Chana, however,said discussions were underway between her ministry and the Local Government and Regional Administration (Tamisemi) ministry over the issue.

The meeting, held under the framework of ‘the Ministerial Public Private Dialogue on Policy Reforms’, was aimed to improve business and investments in the sector.

By virtue of her position, she is the chairperson of the ministerial task force on the public private dialogue and policy reforms in the Tourism sector. Dr Chana challenged the senior officials in the ministry to come out with “strategic recommendations” which can take Tanzania’s tourism to another level.

During the day-long dialogue, the Tanzania Association of Tour Operators (Tato) reiterated their concerns on the multiple taxes.

The association’s chairman Wilbroad Chamburo said taxation in Tanzania’s tourism industry has remained high compared to her competitors in the region.

He cited the Tourist Agency Licensing Authority (Tala) licence pegged at $2,000 which, he said, was prohibitive to local tour operators.

“Tala tax is a burden to us” echoed Samuel Diah, the chairman of Tanzania Local Tour Operators (TLTO), a lobby for small scale operators.

He said taxes have pushed the local tour operators in a tighter corner compared to large companies with roots outside the country.

“We have to pay back loans yet their businesses were heavily impacted by Covid-19”, he explained.

Tato vice chairman Henry Kimambo attributed multiple taxation in the hospitality industry to a host of regulatory agencies.

Other speakers said high taxation has made Tanzania an expensive destination for tourists compared to the country’s close competitors.

These are largely manifested in the often disputed value added tax (VAT) and the concession fees.

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Blueprint implementation can further accelerate growth in tourism

Tourism’s  importance to the economy of Tanzania is multifaceted. An important part of the country’s Gross Domestic Product (GDP), it also generates significant export earnings - for example, the June 2019 Bank of Tanzania (BoT) Monthly Economic Review shows that in the year to May 2019 travel receipts (which comprises mainly receipts from the tourism sector) increased by 9.5% to USD 2.5 billion (a significant component of the USD 8.5 billion value of all exports of goods and services). In addition, tourism touches several industries directly and many more indirectly through tourism spend resulting in a significant multiplier impact. Though it is a vital sector, it is also faced with a lot of challenges.

The Blueprint for Regulatory Reforms to Improve the Business Environment (“the Blueprint”) summarises issues for various sectors, including those raised by stakeholders in the tourism sector. The concerns listed by the tourism sector are mostly in relation to over-regulation with the presence of duplicate and multiple fees, levies, taxes and charges which result in administrative and financial costs that constrain the potential business growth in the tourism sector.

Among the challenges listed in the Blueprint are (i) the Administration of Tanzania Tourism Licensing Board (TTLB) which was introduced as a permit board for operators in the tourism sector, (ii) Contradiction in Registration Requirements between the Tourism Division in the Ministry of Tourism and Natural Resources in Tanzania (MTNRT) and Tanzania Investment Centre (TIC), (iii) Tourism Development Levy (TDL), (iv) Segmentation of Tourism Market due to varied Local Government Authority (LGA) payment requirements and (v) Sub-Sector Specific Challenges.

An example of the Sub Sector Specific challenges are the sector specific requirements in the tour operators sub-sector, which include certificate of registration, business license (up to 46,000TSH which is a one - time fee), TTLB’s licence - up to US$ 2000 for locals and US$ 5000 foreigners paid annually, camping and climbing mountain permit, as well as the other general regulatory and tax compliance requirements that apply to all businesses.  From the tax perspective concerns include in relation to the impact on competitiveness of VAT when combined with other turnover based levies and charges, as well as the impact of costs imposed on labour costs (for example,  Skills and Development Levy and social security costs) The Blueprint recommends that there is a need to review the entry requirements for start-ups in the sector to match with the competitive industry in the region.

Looking at the hotel sub-sector, major concerns include in relation to costs arising on the opening of a hotel including (i) the general hotel license, (ii) license to operate the restaurant, (iii) licence to operate a bar, (iv) liquor license, (v)Tanzania Food and Drug Authority (TFDA) license, (vi) health inspection (requiring an officer from the local government authority), (vii) Certification requirement from the environmental authority i.e National Environment Management Council (NEMC), (viii)  hotel levy to mention but a few. Hotel operators have various complaints including the overburdening of taxes which in their opinion can be grouped into one fee registration. In addition, there are also some challenges of frequently unannounced inspections which mostly interrupt businesses.

The Blueprint recommendations match the opinions of hotel operators i.e for the government to consider on grouping these charges where they can be paid as a one-time fee to cater for all. The government should also review and reduce the hotel levy rates as a way of increasing the investment, employment and improving compliance and effectiveness on the revenue collection.

A recent PwC report ( Hotels Outlook 2019 - 2023 ), which reviewed the hospitality and leisure industries in South Africa, Nigeria, Mauritius, Kenya and Tanzania, projected continued strong growth for tourism in Tanzania.  In particular, it projected that in 2019 guest nights will increase by 6.3%, and in the period 2019 to 2023 guest nights and room revenue will rise at a compound annual growth rates of 3.5% and 8.2% respectively.  But if we improve and strengthen the business enabling environment then growth rates could be higher. The time to implement the Blueprint recommendations is now and specifically to our ever important tourism sector which needs to continue to be nurtured. A number of initial specific measures/actions were announced in the recent budget speech to start the process of rationalising the regulatory regime.  It is to be hoped that this momentum is continued.

Article by Angela Costantino, Administrator  - Tax Services

The views expressed do not necessarily represent those of PwC. For PwC updates on tax and other matters do follow @pwc_tz or visit our website   www.pwc.com/tz

Pauline Koola

Manager, PwC Tanzania

Tel: +255 (0) 22 219 2000

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