Incentives

Made under section 31(3) of The Zanzibar Investment Promotion and Protection  Authority Act No. 14, 2018

1.  Free Economic Zone Developers

1. exemption from payment of taxes and duties for machinery, equipment, heavy duty vehicles, building and construction materials and any other goods of capital nature to be used for purposes of development of the Free Economic Zone infrastructure;
2. exemption from payment of corporate tax for an initial period of ten years and thereafter a corporate tax, shall be charged at the rate specified in the Income Tax Act;
3. exemption from payment of withholding tax on rent, dividends and interest for the first ten years
4. exemption from payment of property tax for the first ten years;
5. remission of customs duty, value added tax and any other tax payable in respect of importation of one administrative vehicle, ambulances, fire fighting equipment and fire fighting vehicles and up to two buses for employees transportation to and from the Free Economic Zones;
6. exemption from payment of stamp duty on any instrument executed in or outside the Free economic Zone relating to transfer, lease or hypothecation of any movable or immovable property situated within the Free Economic Zone or any document, certificate, instrument, report or record relating to any activity, action, operation, project, undertaking or venture in the Free Economic Zone;
7. on site customs inspection of goods within Free Economic Zones; and
8. treatment of goods destined into Free Economic Zones as transit goods;

2.  Free Economic Zone Operators whose primary markets are  within Custom territory

1. remission of customs duty, value added tax and any other tax charged on raw materials and goods of capital nature related to the production in the Free Economic Zones;
2. exemption from payment of withholding tax on interest on foreign sourced loan;
3. remission of customs duty, value added tax and any other tax payable in respect of importation of one administrative vehicle, one ambulances, fire fighting equipment and fire fighting vehicles and up to two buses for employee’s transportation into and from the Free Economic Zones;
4. exemption from pre-shipment or destination inspection requirements;
5. on site customs inspection of goods within Free Economic Zones;
6. access to competitive, modern and reliable services available within the Free Economic Zones; and
7. subject to compliance with applicable conditions and procedures for foreign exchange and payment of tax whenever appropriate, unconditional transfer through any authorized dealer bank in freely convertible currency of:

1. net profits or dividends attributable to the investment;
2. payments in respect of loan servicing where a foreign loan has been obtained;
3. royalties, fees and charges in respect of any technology transfer agreement;
4. the remittance of proceeds in the event of sale or liquidation of the licensed business or any interest attributable to the licensed business; and
5. payments of emoluments and other benefits to foreign personnel employed in Tanzania in connection with the licensed business.

3.  Free Economic Zone Operators who producing for Export markets

1. subject to compliance with applicable conditions and procedures, accessing the export credit guarantee scheme;
2. remission of customs duty, value added and any other tax charged on raw materials and goods of capital nature related to the production in the Free Economic Zones;
3. exemption from payment of corporate tax for an initial period of ten years and thereafter, a corporate tax shall be charged at the rate specified in the Income Tax Act;
4. exemption from payment of withholding tax on rent, dividends and interests for the first ten years;
5. exemption from payment of all taxes and levies imposed by the local Government Authorities for products produced in the Free Economic Zones for a period of ten years;
6. exemption from pre-shipment or destination inspection requirements;
7. on site customs inspection of goods in the Free Economic Zones;
8. remission of customs duty, value added tax and any other tax payable in respect of importation of one administrative vehicle, ambulances, firefighting equipment and vehicles and up to two buses for employees transportation to and from the Free Economic Zones;
9. treatment of goods destined into Free Economic Zones as transit goods;
10. access to competitive, modern and reliable services available within the Free Economic Zones; and
11. subject to compliance with applicable conditions and procedures for foreign exchange and payment of tax whenever appropriate unconditional transfer through any authorized dealer bank in freely convertible currency of:

1. net profits or dividends attributable to the investment;
2. payments in respect of loan servicing where a foreign loan has been obtained;
3. royalties, fees and charges in respect of any technology transfer agreement;
4. the remittance of proceeds in the event of sale or liquidation of the business enterprises or any interest attributable to the investment;
5. payments of emoluments and other benefits to foreign personnel employed in Tanzania in connection with the business enterprise;

  l. twenty percent of total turnover is allowed to be sold to the local market and is subject to the payment of all taxes;
  m. hundred percent foreign ownership is allowed; and
  n. no limit to the duration that goods may be stored in the Freeport Zones.

IMPORTANT NOTE

Investors licensed primarily for export markets are investors whose exports are more than eighty percent of total annual production.