Tanzania: 2011/2012 Budget highlights

General provisions

Income Tax
••Income tax exemptions on allowances paid to government employees and institutions who receive government funding for their operations.

•• Abolishing of withholding tax on fish transport for foreign freight.

VAT

•• VAT exemption on spare parts for agricultural equipments such as threshers, rice dryers and mills, planters, trailers and power tillers used in organised farming (registered groups and cooperative unions).

•• VAT exemption on NASCOR pellet feed used for poultry.

•• Nylon fishing twines used for making fishing nets are now exempt from VAT.

•• Exempt VAT on spare parts for grain conveyors, sprayers and harrows.

•• Introduction of VAT refund system to retail exports purchased in the country by non-residents for purchases valued at 400,000/- and above.

•• Abolish VAT exemption on sale and lease of residential buildings by the National Housing Corporation (NHC).

•• Abolish VAT special relief on charitable community based organisations and Non-Government Organizations (NGOs). This change will not affect religious organizations.

•• Introduce VAT special relief to NGOs when they donate food supplies to children and orphanage care centres and schools.

Import Duties

•• Extend the stay of application of CET rate of 35% on wheat grain and apply 10% for a period of one year.

•• Grant remission of duty on:

--raw materials used in manufacture soaps, toilets and medicated soaps (palm stearin, RBD) for one year;

--duplex boards; and

-- grant copper cathodes which are raw materials used to manufacture refined copper and copper alloys.

•• Split the tariff on raw materials HS Code 2710.19.59 to provide white oil used in cosmetic industry, to be subject to 0% duty.

•• Split the tariff HS Code 2309.90.00 and provide for

0% on premixes used in the manufacture of animal and poultry feeds.

•• Increase duty rate from 0% to10% on Galvanised plated/coated wire.

•• Reduction of duty from 25% to 10% on:

--aseptic bags;

--component parts and inputs for assembler of refrigerators and freezers connectors;

--on raw materials used in the manufacture of scent sprays and other similar toilet sprays; and

-- materials for manufacture of solar panels.

•• Extension of charging 10%:

--on motor vehicles carrying more than 25 persons for one year; and

--on motor vehicles transporting goods with gross vehicle weight exceeding 5 tonnes but not exceeding 20 tonnes for one year.

•• One year extension of duty remission from 25% to

0% on motor vehicles with gross weight exceeding 20 tonnes.

•• Extending the import duty exemption on buses under

HS 8704.90.99 to be used in the Dar es Salaam Fast

Truck Bus Project and apply import duty rate of 10% for the period of one year.

•• Split HS 8703.90.10 to provide import duty exemption on motorcycle ambulances.

•• Split HS 2106.90.90 to provide for 10% for food supplements.

•• Grant stay of application of EAC -CET on road tractor and apply import duty rate of to 0% for the period of one year.

•• Extend the exemption regime granted to Armed Forces Canteen for one year.

•• Grant of import duty exemption to the police force

•• Exempt import duty on tsetse fly traps.

•• Exempt import duty on security equipments ( hand held metal detectors, walk through metal detectors,

CCTV, cameras, bomb detectors and undercarriage mirrors.

•• Grant remission of import duty on imported solar panels.

•• Exempt import duty on battery operated vehicles/golf carts for use in hotels, hospitals and airports.

•• Import duty on apron buses which are used to transfer passengers at Airports.

•• Reduction of destination inspection fees from

1.2% to 0.6% of Free On Board (FOB) of imported products.

Excise Duties

•• Reduction of excise duty on HFO (heavy fuels) from

Tsh 80 to Tsh 40 per litre.

•• Reduction of excise duty for plastic bags with more than 30 microns (HS: CODE 3923.2900) from 120% to 50%.

•• Adjust the specific excise duty rates on petroleum products by 10% as follows:

-- carbonated soft drinks from Tsh 63 per litre to Tsh

69 per litre;

--beer made from the local un-malted cereals from

Tsh 226 per litre to Tsh 249 per litre;

--other beers from Tsh 382 per litre to Tsh 420 per litre;

--wine produced with more than 25% imported grapes from Tsh 1,223 per litre to Tsh 1,345 per litre;

--wine with domestic grape content exceeding 75%

Tsh 420 per litre; and

--spirits from Tsh 1,812 per litre to Tsh 1,993 per litre.

•• Excise duty on cigarettes has been amended as follows:

-- cigarattes without filter tip and containing domestic tobacco more than 75% from Tsh 6,209 to Tsh 6,830 per thousand cigarattes;

--cigarettes with filter tip and containing domestic tobacco more than 75% from Tsh 14,649 to Tsh

16,114 per mil;

--other cigarettes not mentioned in above from Tsh

26,604 to Tsh 29,264 per mil;

-- cut rag or cut filler from Tsh 13,436 per kilogram to Tsh 14,780 per kilogram; and

--excise duty rate on “cigars” remains at 30%.

Skill and Development Levy

•• Allocation of revenue collected from Skills

Development Levy (SDL) of 6% of employers costs to change to 4% to be allocated to Higher Education

Loans Board (HELB) and 2% to be allocated to Vocational Education and Training Authority (VETA).

Stamp Duty

•• Exemption of stamp duty on transfer of ownership of assets to Special Purpose Vehicles (SPVs) for the purpose of issuing asset backed securities.

Business Licensing

Imposition of business licence fee as follows:

•• city, town and municipal councils – licence fee of Tsh

50,000 per annum for each type of business eligible for a business licence (other than bars);

•• district councils – licence fee of Tsh 30,000 per annum; and

•• village councils – licence fee of Tsh 10,000 per annum.

Oil and Gas

•• Exemption of fuel levy charged on fuel for vessels, rigs and other equipments used in oil and gas exploration. The exemption will be granted through issuance of Government Notices (GNs).

The applications will have to be verified by TPDC before being submitted to the Ministry of Finance.

Mining

•• Introduction of a special escrow account by TRA where mining companies will be required to draw their estimated annual consumption plans and deposit money on account equal to estimated taxes on petroleum products consumed in a given month.

Motor taxes

•• Increase traffic notification fee from Tsh 20,000 and

Tsh 300,000.

SOURCE: THE GUARDIAN