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Business Formalization and Compliance for Micro, Small, and Medium Enterprises in
Tanzania A Guide for ENGINE Business Development Service Providers
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Dr. Feliciana Ifunya Individual Consultant [Course title]
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Developed by: Dr. Felician Ifunya, Consultant; P. O. Box 75269, Dar es Salaam, Tel: +255754462270; E-mail: [email protected]
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Table of Contents
1. Introduction ............................................................................................................................................................... 4 1.1. What is formalization? ...................................................................................................................................... 4 1.2. What is Regulatory Compliance? ...................................................................................................................... 4 1.3. The Advantage of formalization and Regulatory Compliance for MSMEs ......................................................... 5 1.4. The Purpose of the Guide ................................................................................................................................... 5 1.6. How the guide is organized ................................................................................................................................ 6
PART 1: BUSINESS FORMALIZATION .............................................................................................................................. 7 2. Business Formalization ............................................................................................................................................. 8
2.1. Forms of Business Arrangements in Tanzania .................................................................................................... 8 2.2. Formalizing a Medium Enterprise in Tanzania ................................................................................................... 9
2.2.1. Description of the steps of formalizing a medium enterprise in Tanzania ................................................. 9 2.2.2. Cost and time to formalize a Medium Enterprise in Tanzania.................................................................. 10
2.3. Formalizing a Small and microenterprise in Tanzania ...................................................................................... 11 2.3.1. Description of the steps of formalizing a micro and small enterprise in Tanzania ................................... 11 2.3.2. Cost and time to formalize a Small, Micro Enterprise in Tanzania ........................................................... 12
2.4. Formalizing a Cooperative Society in Tanzania ................................................................................................ 12 2.4.1. Procedure for registering a cooperative society ....................................................................................... 12 2.4.2. Costs for registering a cooperative society ............................................................................................... 13
PART 2: REGULATORY COMPLIANCE ........................................................................................................................... 14 3. Paying Taxes in Tanzania ........................................................................................................................................ 15
3.1. Why pay taxes? ................................................................................................................................................ 15 3.2. Taxes levied to Medium Enterprises in Tanzania ............................................................................................. 15 3.3. Process, Time and Cost of Paying Taxes for a Medium Enterprise in Tanzania ............................................... 16 3.4. Paying Taxes for Micro and Small enterprises for 2019/20 ............................................................................. 17
3.4.1. How to calculate presumptive taxes ......................................................................................................... 18 3.5. The Electronic Fiscal Device (EFD) System........................................................................................................ 19
3.5.1. The Tanzania Revenue Authority EFD Second Phase ................................................................................ 19 3.6. Tax Clearance Certificates and Business Licensing ........................................................................................... 20
3.6.1. Rationale for Applying for a tax Clearance Certificate .............................................................................. 20 3.6.2. The Business Licensing Regime in Tanzania .............................................................................................. 21
4. Complying to Standards in Tanzania ...................................................................................................................... 22 4.1. What is a standard ........................................................................................................................................... 22 4.2. The standards Landscape in Tanzania .............................................................................................................. 22
4.2.1. The Tanzania Bureau of Standards (TBS) .................................................................................................. 22 4.2.2. Occupational Health and Safety Health (OSHA) ....................................................................................... 23 4.2.3. The Weights and Measure Agency (WMA) ............................................................................................... 24
4.3. Environmental Management Standards........................................................................................................... 26 5. Trading Across Borders ............................................................................................................................................ 27
5.1. Importing Goods in Tanzania ............................................................................................................................ 27 5.2. Exporting Goods out of Tanzania...................................................................................................................... 29 5.3. Simplified Trade Regimes ................................................................................................................................. 30
6. Compliance to Local Government Authority and Sector Based Levies.................................................................... 31 6.1. Local Government Levies .................................................................................................................................. 31 6.2. Sector-Based Levies .......................................................................................................................................... 32
6.2.1. Transport Sector -SUMATRA ..................................................................................................................... 32 6.2.2. The Tourism Sector- Tourism Agent and Licensing Compliance ............................................................... 34 6.2.3. The Mining Sector- Compliance of Artisanal and Small Miners................................................................ 34 6.2.4. The Health Sector- Registration and Compliance Requirements for a Pharmacy .................................... 36 6.2.5. Registration and Compliance in the Education Sector – Registering a Private School ............................. 38 6.2.6.. The Livestock Sector- The Dairy Board Industry Act ................................................................................ 41 6.2.7. Reform in the Agriculture Sector .............................................................................................................. 42
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PART 3: HOW TO .......................................................................................................................................................... 43 7. Facilitating MSMEs to Formalization and Compliance ............................................................................................ 44
7.1. The Situation of Formalization and Compliance .............................................................................................. 44 7.2. The How of Delivering Business Formalization and Compliance Services. ...................................................... 45
7.2.1. Targeting through Market Assessment ..................................................................................................... 45 7.2.2. Institutional Arrangements ....................................................................................................................... 46 7.2.3. High-quality human capital for compliance and formalization facilitation and delivery. ........................ 47 7.2.4. Monitoring and Evaluation ........................................................................................................................ 47
List of Annexes Annex 1: Terms of Reference for a Call of a Consultant .............................................................................................. 48
Annex 2: Requirements and results for formalizing a Medium Enterprise ................................................................. 50
Annex 3: Contact Information for formalization compliance Institutions ................................................................... 54
Annex 4: Contact information for compliance institutions ......................................................................................... 57
Annex 5: Public Notice Change of Procedures for Product Certification and Imports Inspection ............................. 57
Annex 6: Levies and Charges removed by the Ministry of Agriculture and Livestock budget Speech 2017/18 ......... 66
List of Figures Figure 1 Division of costs and time for exporting from Mbeya to Malawi .................................................................. 29
Figure 2: Registration under BRELA by Size% .............................................................................................................. 44
Figure 3: Registration by BRELA by Area% ................................................................................................................... 44
List of Tables Table 1: Categories of MSMEs in Tanzania .................................................................................................................... 4 Table 2: Advantages and Disadvantages of a sole proprietorship, partnership, and a Limited liability Company ....... 8 Table 3: Processes and Authorities involved to formalize a Medium Liability Company .............................................. 9 Table 4: Processes, number of steps, authority, time to process and costs ............................................................... 10 Table 5: Processes and Authorities involved to formalize a Micro and small business under a business name ........ 11 Table 6: Costs and time to formalize a Small and Micro Enterprise ............................................................................ 12 Table 7: The steps/conditions to register a cooperative society ................................................................................. 12 Table 8: Summary of the Topics of the Table at Glance TRA 2018/2019 .................................................................... 16 Table 9: Process, time and number of payments for paying tax for medium enterprise in Tanzania ........................ 17 Table 10: A comparison of current presumptive tax and proposed presumptive tax rate 2019/20 .......................... 17 Table 11: Workable examples for calculating payable presumptive taxes ................................................................. 18 Table 12: The steps, time and costs of obtaining a food manufacturing license ........................................................ 23 Table 13: Maximum packing Quantities for Agriculture commodities ........................................................................ 25 Table 14: The do and don’ts of labeling ....................................................................................................................... 25 Table 15: List of Type B2 Projects ................................................................................................................................ 26 Table 16: The steps, time and costs of importing goods via a Clearing Agent in Tanzania ......................................... 28 Table 17: The steps, time and costs an exporter incurred in exporting from Tanzania .............................................. 29 Table 18: Allowable levies LGA can levy on Citizens .................................................................................................... 31 Table 19: SUMATRA Process of Applying and Issuance of a Road Service License: .................................................... 33 Table 20: Fees charged by SUMATRA for Road License Service fees for Passenger Vehicles ..................................... 33 Table 21: The steps, time and costs of obtaining a tourist registration and license ................................................... 34 Table 22: The process and the requirements of trading under the Mineral and Gem House .................................... 35 Table 23: Steps, Time, Authorities and the Costs for Obtaining a Milk and Milk Products Registration Certificate .. 42 Table 24: Contents of the market assessment for formalization and Compliance services to MSMEs ...................... 45 Table 25: The Differences between the Traditional and Market Development approach to BDS .............................. 46
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1. Introduction The Tanzania SMEs policy1 defines MSMES as an acronym of micro, small, and medium enterprises as a
cross-cutting sector that covers non-farm economic activities, mainly manufacturing, mining, commerce,
and services. The policy categorizes micro enterprises as those engaging up to 4 people, in most cases,
family members or employing a capital amounting up to Tshs.5.0 million and that the majority of
microenterprises fall under the informal sector. Small enterprises are mostly formalized undertakings
engaging between 5 and 49 employees or with a capital investment above Tshs.5 million to Tshs.200
million. Medium enterprises employ between 50 and 99 people or use a capital investment above
Tshs.200 million to Tshs.800 million. The table below illustrates the different categories.
Table 1: Categories of MSMEs in Tanzania
Category Employees Capital Investment in Machinery (Tshs.)
Microenterprise 1 – 4 Up to 5 mils.
Small enterprise 5 – 49 Above 5 mil. To 200 mil.
Medium enterprise 50 – 99 Above 200mil.to 800 mil Large enterprise 100 + Above 800 mils.
Source: SME (2003) Policy
1.1. What is formalization?
A formalized economy is the opposite of the informal economy, which is easy to explain and has extensive
literature. The informal economy, shadow economy, black economy, and unreported economy have been
used to define the informal economy. The informal economy2 comprises of economic activities that evade
regulatory costs. The Informal economy also denies itself from the benefits and rights incorporated in
laws and administrative rules covering property relationships, commercial licensing, labor contracts, torts,
financial credit, and social systems. Nations especially developing economies like Tanzania, are
encouraged to measure3 informality to aid their economies to understand:
• The extent workers in informal conditions are vulnerable as they have little or no social
protection or employment benefits, and the extent these conditions undermine inclusiveness in
the labor market;
• The extent informal economic activity is severely limiting tax revenues, and
• To enable nations to develop strategies to shift production from the informal to the formal sector.
Economies, especially emerging economies like Tanzania, are interested in formalizing their economies
and as a result, achieve an improved tax base.
1.2. What is Regulatory Compliance?
Regulatory compliance is defined as a process of putting in place the measures necessary to comply with
the regulations, laws, and guidelines that govern the operations of a business4. The rules may be set by a
governmental agency such as the Tanzania Bureau of Standards (TBS) by a governing body for the
1 http://www.tzdpg.or.tz/fileadmin/_migrated/content_uploads/sme.policy.2002.pdf accessed on 6/21/2019 2 Feige, E, 2005, “Overseas Holdings of U.S. Currency and the Underground Economy,” Macroeconomics 0501022, EconWPA. 3 IMF 2017 IMF Working Paper- The Informal Economy in Sub-Saharan Africa: Size and Determinants 4https://www.safeopedia.com/definition/5431/regulatory-complianceaccesed on 6/21/2019
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applicable industry such as the Tanzania Contractors Registration Board. Compliance requires the
implementation of codes of practice and enterprise policies that ensure that the stated enterprise
requirements on a day-to-day basis are implemented as instructed in the specifications.
1.3. The Advantage of formalization and Regulatory Compliance for MSMEs
There is evidence that illustrates that the formalization of MSMEs is advantageous to an entrepreneur5.
Some of the benefits of formalizing micro, small, and medium enterprises are:
• Enterprises gain access to finance, business development services, and technologies.
• Formalization creates a competitive level field as it reduces unfair competition by informal firms.
• Formalized MSMES can participate in public biddings or act as suppliers or retailers of larger
companies as it is easy to sue and be sued (torts).
• Becoming officially registered leads to an increase in profits and investments. A study conducted
in Vietnam gives empirical evidence that registered SMEs increased profits and investments
compared to those that were not registered6.
• Enterprise formalization decreases the use of casual labor (improved contract conditions for
workers) and reduces their exposure to government fines.
The advantages of compliance7 include:
• Reduced legal problems related to improved operational safety and higher employee retention.
• Compliance decreases the risk of fines, penalties, work stoppages, lawsuits, or a shutdown of the
businesses.
• Adherence to safety and security rules helps prevent injuries, fires, or building evacuations that
hurt the firm’s profitability.
• When MSMEs comply with issues related, for example, with protecting employees, more
employees feel they work in a fair, professional, and safe environment, and more likely they will
stay.
1.4. The Purpose of the Guide
The basis of developing the Formalization and Compliance guide is a recognition that enterprises, despite
their size, have to understand the laws, regulations, and procedures governing MSMEs and achieve
regulatory compliance. To comply, large enterprises usually employ a Regulatory Compliance Officer. Due
to limited financial resources, MSMEs fail to monitor enterprise level regulatory compliance. To
circumvent the resource gap, MSMEs in the ENGINE target area of Iringa, Mbeya, and Morogoro could
collaborate in clusters and pool resources to hire the services of the Business Development Service
Provider (BDSP). Equally, BDSPs should capture this opportunity, while ENGINE has to facilitate BDSPs to
deliver the service as viable/sustainable businesses.
The main objective of the guide, therefore, is to build the capacity of BDSPs in Iringa, Mbeya, and
Morogoro to understand the requirements of business formalization and compliance procedures
5 https://www.itcilo.org/en/areas-of-expertise/informal-economy/policies-and-practices-for-enterpriseaccesse on 6/21/2019 6 https://www.researchgate.net/publication/241092115_The_Benefits_of_Formalization_Evidence_from_Vietnamese_Manufacturing_SMEs accessed on 6/21/2019 7 https://smallbusiness.chron.com/importance-compliance-business-71173.html accessed on 6/21/2019
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applicable in Tanzania to improve their services to MSMEs. Specifically, the increased knowledge of BDSPs
on legal and regulatory requirements for business formalization and compliance will:
• Extend the product range and service offerings of BDSPs;
• Reduce the time and costs MSMEs expended on formalization and compliance as MSMES will
purchase the services from BDSPS and therefore,
o MSMEs will spend more time on their core function of production, and this will lead to;
▪ Increased productivity and profits to MSMEs.
1.6. How the guide is organized
The guide is organized into three parts and seven chapters. The first chapter introduces the guide and presents the categories of MSMEs as defined by the SME (2003) policy. Section 1.1 describes formalization as the opposite of the informal economy- as activities that evade regulatory costs. Section 1.2 defines regulatory compliance as a process of putting in place measures to act by the regulations, laws, and guidelines governing business procedures. Section 1.3 presents the advantages an entrepreneur gains by formalizing, introduces the purpose of the guide, and this section summarizes the contents of the guide.
The second chapter discusses business formalization. It introduces the forms of business available in Tanzania and presents the advantages and disadvantages of a sole proprietorship, partnership, and company limited by liabilities. Section 2.2.1 proposes that formalization of a medium enterprise could take a business form of a company limited by shares and presents the steps, time and costs an entrepreneur has to pass through to formalize the medium enterprise using the company limited by liabilities form of business. Section 2.3.1.proposes that small and micro-enterprises to register under a business name form by the Business Registration and Licensing Agency (BRELA). Section2.3. 2 tracks the steps, time, and costs that are needed to register under a business name. The section also proposes that micro-enterprises with a turnover of less than TZS 4 mil may formalize under the identity card system. The second part discusses compliance and is organized from chapter 3-6. The third chapter discusses paying taxes, while the fourth chapter discusses standards. Section 3.1. Outlines why businesses have to pay taxes, while section 3.2 describes the types of taxes levied to enterprises and section 3.3. Presents the process and time for paying taxes for medium enterprises. Section 3.4 presents that the Financial Bill 2019 increased the turnover under the presumptive tax regime from 20 mils to 100mil. This increase gives liberty for most of the small business to fall in this category and therefore, a relief. Chapter four discusses what standards are and the advantages of complying with standards. The functions, mandate, and the conditions of the three institutions that regulate standards, i.e., the Tanzania Bureau of Standard (TBS), the Occupational, Safety and Health Agency (OSHA) and the Weights and Measures Agency are discussed. The fifth chapter discusses trading across the border, while the sixth chapter discusses how MSMEs could comply with Local Government authority and sector-based levies.
The third part of the guide is devoted to hands-on delivery. The seventh chapter facilitating MSMES to formalization and compliance is divided into two sections. The first section, the situation of formalization posits that formalization measured by BRELA registration is very low by business size and by area. The section also presents constraints at the supply and demand side. The second part, the how of delivering business formalization and compliance proposes based on best practices the four approaches that will facilitate effective delivery of formalization and compliance services? Effective approaches proposed include; i) Targeting through a market assessment, ii) A focused institutional arrangement towards viability/sustainability, iii) A competent human capital and IV) Monitoring and evaluation.
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PART 1: BUSINESS FORMALIZATION
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2. Business Formalization 2.1. Forms of Business Arrangements in Tanzania When an MSME entrepreneur decides to formalize a business, the entrepreneur has to determine the type of business arrangements in which to register the firm. The principal forms of business arrangements in Tanzania8 are sole proprietorships, partnerships, Trusts, Societies and co-operative societies, Non-governmental organizations, and companies. For the sake of simplicity, the section compares three forms of businesses; a company limited by share, sole proprietorship, and a partnership. These three forms have advantages and disadvantages, as illustrated in the table below. Table 2: Advantages and Disadvantages of a sole proprietorship, partnership, and a Limited liability Company
Form of business arrangement
Advantages Disadvantages
Sole proprietorship This form of business arrangement is most appropriate in the case of a single investor.
• The procedure for setting up a business is simple and low cost.
• Decision-making is easy as the proprietor does not need to consult with anyone before arriving at a decision.
• Taxes rates are better than those applied to personal income tax.
• It tends to be challenging to raise capital.
• The business is not a separate legal entity from its owner.
• The sole proprietor is personally liable for the liabilities of the business.
• The business dissolves on the death of the sole proprietor.
• There is little scope for growth and expansion as it is limited to a single person in terms of capital and workforce.
Partnership • It can be appropriate
where there is more than one investor.
• A partnership deed is advisable to set out how to control partnership business and decision-making.
• The costs of set up are lower than for a company.
• It tends to be arduous to raise capital.
• The business is not a separate legal entity from the partners.
• The partners are personally liable for the liabilities of the business.
• If a partner leaves the partnership, the business dissolves automatically unless otherwise agreed.
Limited liability company
• The general requirement of forming a limited liability company is a minimum of two shareholders and two directors.
• Distinct and separate legal personality separate from its shareholders.
• The liability of the shareholders is limited.
• The business does not dissolve in the event of the death of one of the shareholder or director.
• Close regulation by statute.
• There are circumstances in which the state may lift the "corporate veil," and the shareholders can be liable for the obligations of the company (but this is rare and only in extreme cases). .
Source: Compiled by the author based on VELMA Law 2018
8 https://content.next.westlaw.com/Document/I81810651b4f511e398db8b09b4f043e0/View/FullText.html?contextData=(sc.Default)&transitionType=Default&firstPage=true&bhcp=1
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2.2. Formalizing a Medium Enterprise in Tanzania
2.2.1. Description of the steps of formalizing a medium enterprise in Tanzania
To formalize a medium enterprise under a liability company principal forms of business arrangements in Tanzania, an entrepreneur will undergo 309 steps as illustrated in the table below. S/he will contact directly or online six (6) responsible authorities. These authorities include a Public Notary, Tanzania Revenue Authority (TRA), Business Registration and Licensing Authority (BRELA), National Social Security Fund (NSSF), Occupational, Safety, and Health Authority (OSHA) and Worker Compensation Fund (WCF). Table 3: Processes and Authorities involved to formalize a Medium Liability Company
Process Responsible Authority
Obtain notarized declaration of compliance form
1Obtain certified and notarized documents Public Notary
Obtain a certificate of incorporation online
2Create an online account Online 3Apply for a certificate of incorporation Online
4Pay incorporation fees Online
5Obtain certificate of incorporation Online
Obtain company tax identification number (TIN)
6Submit lease agreement for the assessment TRA Local
7Pay for withholding tax and stamp duty CRDB 8Submit request for the tax identification number Online
9Biometric and photo capture TRA
10Obtain Tax Identification Number (TIN) and tax assessment form TRA
Obtain tax clearance certificate (2)
11Submit and stamp application letter TRA
12Submit application letter and obtain tax clearance certificate TRA Obtain a business license (5)
13Assessment and verification of documents BRELA
14Pay business license fees CRDB
15Obtain BRELA receipt BRELA
16Submit application BRELA 17Obtain business license BRELA
Register for VAT
18Submit request for value added tax registration TRA
19Obtain VAT certificate TRA
Register for social security scheme
20Submit registration request NSSF 21Obtain social security number NSSF
Apply for OSHA certificate of registration
22Submit document for assessment OSHA
23Pay general inspection and publication fees NMB
24Obtain OSHA receipt OSHA
25Obtain OSHA certificate of registration OSHA Obtain OSHA workplace general inspection report/certificate
26Submit application for inspection OSHA
27Workplace inspection OSHA
28Obtain general inspection report OSHA
9 http://tanzania.eregulations.org/procedure/95?l=en accessed on 6/21/2019
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Obtain Workers Compensation Fund (WCF) certificate of registration
29Register and obtain a copy of WCF certificate online WCF
30Obtain Original WCF registration certificate WCT
Source: Constructed from TIC eRegulation Portal
Annex 2 summarizes the 103 documental requirements needed and the 43 results to formalize a medium enterprise.
2.2.2. Cost and time to formalize a Medium Enterprise in Tanzania
If a medium-sized enterprise decides to formalize as a Company Limited by liabilities, it will pay 777,000 Tanzania shilling and 32 days if the process is taken step by step as in the table below. Table 4: Processes, number of steps, authority, time to process and costs
Process Number of steps
Authority Time to Process (days)
Cost TSHS
Obtain notarized declaration of compliance form 1 Public Notary 1 50,00010
Obtain a certificate of incorporation online -Pay incorporation fees
4 BRELA 1 427,0001112
Obtain company tax identification number (TIN) 5 TRA 1 0
Obtain tax clearance certificate 2 TRA 1 0
Obtain business license 5 BRELA 6 300,00013
Register for VAT 2 TRA 4 0
Register for social security scheme 2 NSSF 7 0 Apply for OSHA certificate of registration 4 OSHA 0 0
Obtain OSHA workplace general inspection report/ certificate
3 OSHA 10 0
Obtain Workers Compensation Fund (WCF) certificate of registration
2 WCF 1 0
Total 30 32 777,000
10 Costs of 50,000 = TZS 10,000 Certification fee for memorandum and articles of association +TZS 30,000 Certification fee for 3 copies of lease agreement+ TZS 10,000 Notarization fee for declaration of compliance form form14b 11 https://www.brela.go.tz/index.php/companies/fees accessed on 6/21/2019 12 Registration fee for companies with share capital TZS 95,000 = More than Tshs. 20,000/= but not more than Tshs. 1,000,000/= or TZS 175,000= More than Tshs. 1,000,000/= but not more than Tshs. 5,000,000/= or TZS 260,000= More than Tshs. 5,000,000/= but not more than Tshs. 20,000,000/=; or TZS 290,000, More than Tshs. 20,000,000/= but not more than Tshs. 50,000,000/= or TZS 440,000 More than Tshs. 50,000,000/= Filing fee TZS 66,000 Filling fee for the application, meaning shs. 22,000/= for each document i.e. Memorandum and Articles of Association, Forms no. 14a and 14b.Registration fee for companies not having share capital TZS 300,000 Stamp duty fee TZS 5,000; Stamp duty is charged for each copy of the Memorandum and Articles of Association TZS 1,200; Stamp duty for Form no. 14b is charged 13 General trading Municipality accessed on 6/21/2019 at https://www.brela.go.tz/_brela_uploads/bl/fees/fee%20structure.pdf
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2.3. Formalizing a Small and microenterprise in Tanzania
2.3.1. Description of the steps of formalizing a micro and small enterprise in Tanzania
The guide suggests that micro and small enterprises could register under a sole proprietorship form of business arrangements as one owner owns these enterprises. The sole proprietor in Tanzania is registered under a business name by BRELA (see Insert). To formalize a business in Tanzania under a business name, an entrepreneur will undergo 1814 steps, as illustrated in the table below. S/he will contact directly or online five (5) responsible authorities. These authorities include BRELA, the 15Registrar of Titles, Tanzania Revenue Authority (TRA), the Local Government Authority (LGA) and NSSF. Table 5: Processes and Authorities involved to formalize a Micro and small business under a business name
Process Responsible Authority
Register a business name
1Assessment of documents and fees BRELA 2Pay business name fees BRELA
3Submit form for registering a business name BRELA
4Obtain certificate of registration of the business name BRELA
Register notarized lease agreement (3)
5Submit lease agreement documents Registrar of Titles16
6Pay registration fee and stamp duty Register of Titles 7Obtain registered a notarized lease agreement Register of Titles
Tax Identification Number (TIN)
8Submit TIN request documents TRA
9Bio-metric fingerprint and photo shoot TRA
10Obtain Tax Identification Number (TIN) and tax assessment form TRA Obtain a business license
11Pay for license registration form LGA
12Assessment of documents and fees LGA
13Pay licensing fees LGA
14Obtain municipal receipt LGA
15Submit business license request documents LGA 16Obtain a business license LGA
Register for social security (2)
17Submit registration request NSSF
18Obtain social security number NSSF
Source: Constructed from TIC regulation Portal
14 http://tanzania.eregulations.org/procedure/181/96?l=en accessed on 6?24/2019 15 http://tanzania.eregulations.org/media/The%20Business%20Names%20Registration%20Ordinance%20(Cap.%20213)..pdf accessed on 7/1/2019 16 Ministry of Lands , housing and Home settlement development
A Business Name is the name or style under which any
business is carried on. In Tanzania, they are registered under
the Business Names (Registration) Act (Chapter 213 of the
Laws) [R.E 2002]. A business name helps to identify a business
and hence advertise it. Business Names do not acquire
Corporate personality after their registration. People are not
compelled by the law to use names in their business, but they
are compelled to register them if they use names in their
business. BRELA
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2.3.2. Cost and time to formalize a Small, Micro Enterprise in Tanzania
If a small/microenterprise decides to formalize as under a business name category, it will require 18 steps, a maximum of 25 days at the cost of TZS 136,120/= as illustrated in the table below. Table 6: Costs and time to formalize a Small and Micro Enterprise
Process Number of steps
Time to Process (days)
Costs TSHS Small Enterprise
Costs TSHS Microenterprise
Register a business name 4 1-3 days 6,00017 6,00018
Register notarized lease agreement 3 7-15 days19
80,120 80,120
Obtain company tax identification number (TIN) 3 1-3 days20 0 0
Obtain a business license 6 0.5-1day 50,00021 50,000
Register for social security scheme 2 1-3 days 0 0 Total 18
Micro enterprises who have a turnover of less than 4 million can register under the vendor's identity introduced by the president.
2.4. Formalizing a Cooperative Society in Tanzania
In Tanzania, there are different forms of cooperative societies and they have different requirements as listed below:
• An Agricultural Society must have no less than fifty (50) members
• A Savings and Credit Cooperative Society at least twenty (20) members
• People with Specialized Skills at least ten (10) members
• Other types of Cooperative Society at least ten (10) members To be registered as a cooperative society, members must fulfill the following:
• A member must be at least fifteen (15) years of age.
• Board members should be eighteen (18) years of age.
• Every member must have a common need with other members of the society.
• A member must be in an occupation relevant to the primary society.
• A member must be capable of paying fees and buying shares.
2.4.1. Procedure for registering a cooperative society
The table below illustrates the steps/conditions to register a cooperative society22 Table 7: The steps/conditions to register a cooperative society
Step Details Authority
1. Hold an initial Meeting
1.1. Discussing and agreeing on the formation of the society; 1.2. Determining among the things procedures for the election of the
chairperson and secretary of the initial meeting; and 1.3. Electing the formation committee
Cooperative Promotion Officer or cooperative
17 http://tanzania.eregulations.org/procedure/181/96/step/1040?l=en accessed on 7/1/2019 18 TZS 6, 000 consists of TZS 5,000 Business name registration fee and TZS 1,000 maintenance fees paid manually 19 http://tanzania.eregulations.org/procedure/181/96/step/865?l=enaccessed on 7/1/2016 20 http://tanzania.eregulations.org/procedure/181/96/step/638?l=en accessed on 7/1/2019 21 This is for small industry other trades see business license fees and respective locations at http://tanzania.eregulations.org/procedure/181/96/step/1127?l=en accessed on 7/1/2019 22 https://www.ushirika.go.tz/wp-content/uploads/2018/08/COOPERATIVE-SOCIETIES-REGULATIONS-2015.pdf accessed on 7/31/2019
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1.4. Write a letter of intent to form a co-operative society to the 1.5. Arrange for meeting that must be chaired by the District Cooperative
Officer (DCO) 1.6. Cooperative members elect a Formation Board with a Chairman and a
Secretary.
Officer appointed by the Registrar
2. Establish a Formation Board
2.2. Decide on the type of society to be formed, 2.3. Prepare by-laws for the society and 2.4. Assess founder members level of business. 2.5. Look in to the future and estimate number of future members and
levels of business to be done by the society in future. 2.6. Carryout a feasibility study and prepare feasibility report. 2.7. Record details of founder members, their share capital and
contributions. 2.8. Record details of prospective members, their probable share capital
and contributions. 2.9. Begin to keep accounts to allow periodic assessment of the group’s
activities; and 2.10. Appoint a delegate in charge of representing the group in all civil
matters
3. Pre-Register of cooperative
3.1. Make an application to the Registrars representative in the area where the society shall operate
3.2. After assessment, if the registrar is satisfied, he / she issues a letter of recognition which will all the group to operate as a pre-cooperative society for three (3) years.
3.3. During the given three (3) years members of the formed pre-cooperative society must be working hard to fulfill the conditions required to become a full cooperative society
District Cooperative Officer at District level or the Assistant Registrar at Regional level.
4. Full registration
4.1. When all requirements are fulfilled at the end of the three years, the society shall then be registered as a full cooperative society however, if at the end of the three (3) years
Registrar
SOURCE: Cosnstructed by Author from the Cooperative Societies Regulation 2015
An application for registration shall be made to the Registrar and shall be accompanied by the following a. Certified copies of resolutions passed at the initial and Formation Meeting. b. Four original copies of the By-Laws duly adopted by the Formation Meeting. c. An evidence of fully paid up shares and minimum capital of five million Tanzanian Shillings
accumulated prior to the date of the registration application. d. Report of the meeting in which the Formation Committee members are elected including their
educational background and professional qualification and confirmation that they have agreed to fulfil the duties relative to their position.
e. Where applicable, the proposed management information system to be used to perform and account for all transactions.
f. Report of feasibility study which demonstrates the economic viability. g. Name of the proposed Manager and his educational background, related work experience and
professional qualifications. h. Letter from district commissioner
2.4.2. Costs for registering a cooperative society
A registration fee of 10.000 Tz Shillings is paid to register a cooperative society.
14
PART 2: REGULATORY COMPLIANCE
15
3. Paying Taxes in Tanzania
“Is it lawful to give tribute to Caesar; or shall we not give it? Who knowing their wiliness,
said to them: Why tempt you me? Bring me a penny that I may see it. And they brought it to
him. And he said to them: Whose is this image and inscription? They say to him, Caesar's.
And Jesus answering said to them: Render therefore to Caesar the things that are Caesar's
and to God the things that are God's”: Mark 12: 14-17
3.1. Why pay taxes?
The quotation above is 2,000 years old. It is a justification for why people pay taxes as it is their
civic responsibility and because the money belongs to the Government. Equally, the Tanzania
Revenue authority motto states, “Together We Build the Nation” emphasizing that taxes are paid
to enable the Government to fulfill its core function of governing and development.
People pay taxes for the following reasons2324:
• Different levels of government Local Government Authorities and the State enact tax laws.
• The money you pay in taxes goes to paying the salaries of government workers, and also
help to support common resources, such as the army, police, and firefighters.
• Tax money helps to ensure that the roads you travel on are safe and well-maintained.
• Taxes fund public libraries and parks.
• Taxes are also used to fund many types of government programs such as health, free
education, that help the poor and less fortunate.
3.2. Taxes levied to Medium Enterprises in Tanzania The Tanzania Revenue Authority is responsible for collecting most of the taxes in Tanzania. Local
government authorities also have the mandate to collect some taxes and charges. Taxes are made up of
direct and indirect taxes.
Direct taxes mainly refer
to taxes on income, while
indirect taxes are on
consumption and
international trade. The
insert summarizes taxes
paid by medium
enterprises
Tax payment methods are withholding, installment, and assessment. Generally, every person is required to pay tax on installment and assessment.
23 https://www.thebalance.com/why-do-we-pay-taxes-4067684 accessed on 6/25/2019 24 https://www.wonderopolis.org/wonder/why-do-you-have-to-pay-taxes/ accessed on 6/25/2019
• .Pay as you earn -is an individual tax deducted by the employer from
monthly salaries of employees. Employers are required to submit monthly
deductions to TRA. Employers are required to submit bi-annual tax returns
(declaration) showing details of deduction during the six months period.
• Withholding tax-Enterprise withhold form i) persons paying investment
returns (e.g. those paying dividends, interest, natural resource payment,
rent or royalty and ii) persons paying service fees and contract payments.
However exceptions exist.
• Corporation tax- for income tax purposes, enterprises are taxed at rate of
30% on profit before tax.
• Stamp duty - Authenticating certain legal instruments requires the payment
of stamp duty.
• Property tax is levied at a flat rate on the property.
16
The Tanzania Revenue Authority (TRA) each year publishes a Tax at Glance25 that summarizes the rates payable and the conditions for paying taxes. The table bow summarizes the Direct and Indirect tax sources for 2018/2019. Table 8: Summary of the Topics of the Table at Glance TRA 2018/2019
A: DIRECT TAXES B: INDIRECT TAXES
1. Corporation tax 9. Value Added Tax (VAT)
2. Withholding Tax 10. Stamp duty
3. Capital Gains on Disposal of Investment Asset
11. Import Duty
4. Single Instalment Tax on... 12. Excise Duty
5. Resident Individual Income Tax 13. Fuel levy 6. Skills and Development Levy (SDL) 14. Petroleum Levy
7. The Individual Presumptive Tax Assessment 15. Tourism Development Levy
8. Depreciation assets, allowances, and the applicable rates
16. Railway development Levy
17. Airport Service Levy
18. Motor vehicles First registration fee is based on:
19. Motor Vehicle Transfer Tax
20. Motor Vehicle Driving License
21. Export Tax 22. Restrictions on the exportation or domestic
use of minerals
23. Export Levy 24. Prohibited Goods
25. Restricted Goods
26. Customs Processing Fees
27. Imports from the East African Community (EAC) Member States and SADC:
28. Non Tax revenues
29. Tax Refund 30. Tax Administration Act
Source: Tanzania Revenue Authority 2018
3.3. Process, Time and Cost of Paying Taxes for a Medium Enterprise in Tanzania
To determine the time and costs of paying taxes, the doing business methodology was used. The table
below shows that a medium enterprise made 60 payments, 207 hours, and the total tax and Contribution
rate as a percentage of profit was 44%.
25 https://www.tra.go.tz/IMAGES/headers/Taxes-and-Duties.-July-201819.pdf accessed on 7/6/2019
17
Table 9: Process, time and number of payments for paying tax for medium enterprise in Tanzania
Tax or Mandatory contribution Payments (number)
Notes on Payments
Time Hours
Total tax and Contribution rate (% of the profit)
Corporate income tax 5 62 20.81
Social security contributions (NSSF) 12 11.28
City Service Levy 4 5.30
Skills and Development Levy 12 78 5.08 Workers Compensation Tariff 12 1.13
Tax on interest 0 withheld 0.26
Motor Vehicle License 1 0.22
Property tax 1 0.15
Fuel Tax 1 0.00 Social security contribution on employees 0 jointly 0.00
Value added tax (VAT) 12 67 0.00
Total 60 207 44.0
Source: Doing Business Tanzania 2019
For compliance purpose, the above table translates that an enterprise has to prepare for this by planning
207 hours an equivalent of 26 person days for tax compliance.
3.4. Paying Taxes for Micro and Small enterprises for 2019/20
Micro and small enterprises in Tanzania who have an annual turnover of Tanzania Shillings 100 MLS and
below can now enjoy a presumptive tax regime26. The amendments made during the budget speech has
increased the threshold for presumptive tax from Tanzania shillings 16 million to 100 million. The 2019/20
budget speech has made amendments to the Income Tax Act, as illustrated in the table below.
Table 10: A comparison of current presumptive tax and proposed presumptive tax rate 2019/20 Turnover (Shillings) Current presumptive tax rates
structure Turnover (Shillings)
Proposed presumptive tax rate structured
Tax payable where section 35 of the Tax Administration Act is not complied with
Tax payable where section 35 of the Tax Administration Act is complied with
Tax payable where section 35 of the Tax Administration Act is not complied with
Tax payable where section 35 of the Tax Administration Act is complied with
Where turnover does not exceed Tshs. 4,000,000/=
- NIL - NIL Where turnover does not exceed Tshs. 4,000,000/=
- NIL - NIL
Where turnover exceeds Tshs. 4,000,000/= but does not exceed Tshs. 7,500,000/=
Tshs. 150,000/=
3% of turnover in excess of Tshs. 4,000,000/=
Where turnover exceeds Tshs. 4,000,000/= but does not
Tshs. 100,000/=
3% of turnover in excess of Tshs. 4,000,000/=
26 http://www.mof.go.tz/docs/news/BUDGET%20FINAL%20JUNE%2012%202019%20ENGLISH.pdf accessed on 6/26/2019
18
exceed Tshs. 7,000,000/=
Where turnover exceeds Tshs. 7,500,000/= but does not exceed Tshs. 11,500,000/=
Tshs. 318,000/=
Tshs. 135,000/= plus 3.8% of turnover in excess of Tshs. 7,500,000
Where turnover exceeds Tshs. 7,000,000/= but does not exceed Tshs. 11,000,000/=
Tshs. 250,000/=
Tshs. 90,000/= plus 3% of turnover in excess of Tshs. 7,000,000/=
Where turnover exceeds Tshs. 11,500,000/= but does not exceed Tshs. 16,000,000/=
Tshs.546,000/= Tshs. 285,000/= plus 4.5% of turnover in excess of Tshs. 11,500,000/=
Where turnover exceeds Tshs. 11,000,000/= but does not exceed Tshs. 14,000,000/=
Tshs.450,000/= Tshs. 230,000/= plus 3% of turnover in excess of Tshs. 11,000,000/=
Where turnover exceeds Tshs. 16,000,000/= but does not exceed Tshs. 20,000,000/=
Tshs. 862,500/=
Tshs. 487,000/= plus 5.3% of turnover in excess of Tshs. 16,000,000/=
Where turnover exceeds Tshs. 14,000,000/= but does not exceed Tshs. 100,000,000/= /=
Tshs. 450,000/= plus 3.5% of turnover in excess of Tshs. 14,000,000
Source: Budget speech 2019/2020
Part V of the Tax Administration Act, 2015 is about the maintenance of documentary and provision of information. Section 35 () states that:
1) Every taxable or liable person shall, within the United Republic , maintain documents in paper or electronic form which:
a. Contain information to be provided of files which the Commissioner General under any tax law:
b. Enable an accurate determination of tax payable under any tax law; c. Can be prescribed by the commissioner General or by regulation
2) Every taxable person or a person liable to tax shall keep records and accounts in accordance with general accepted accounting principles and the requirements of a respect tax law.
3) The documents referred to this in section (1) and (2) shall be retained for a period of five years from the relevant date or for a further period as prescribed in the tax law.
3.4.1. How to calculate presumptive taxes For tax payable where section 35 of the Tax Administration Act is complied with payable taxes vary according to the sales turnover. The table below demonstrates how to calculate payable taxes according to the hypothetical turnover and under different tax categories.
Table 11: Workable examples for calculating payable presumptive taxes
Tax range Instruction for Calculation
Hypothetical sales Turnover
Working formula Payable Tax
Where turnover does not exceed Tshs. 4,000,000/=
NIL 2,000,000 Tshs 2,000X0% 0/=
Where turnover exceeds Tshs. 4,000,000/= but
3% of turnover in excess of Tshs. 4,000,000/=
6,000,000/= Step 1:(6,000,000-4,000,000) = 2,000,000 Step 2: 2,000,000x3%
60,000/=
19
does not exceed Tshs. 7,000,000/=
Where turnover exceeds Tshs. 7,000,000/= but does not exceed Tshs. 11,000,000/=
Tshs. 90,000/= plus 3% of turnover in excess of Tshs. 7,000,000/=
9,000,000/= Step 1: (9,000,000-7,000,000)x 3%
= 60,000/=
Step2: 90,000/+60,000/=
150,000/=
Where turnover exceeds Tshs. 11,000,000/= but does not exceed Tshs. 14,000,000/=
Tshs. 230,000/= plus 3% of turnover in excess of Tshs. 11,000,000/=
14,000,000/= Step 1: (14,000,000-11,000,000)X3%= 90,000/= Step 2: 230,000+90,000/=
320,000/=
Where turnover exceeds Tshs. 14,000,000/= but does not exceed Tshs. 100,000,000/=
Tshs. 450,000/= plus 3.5% of turnover in excess of Tshs. 14,000,000
90,000,000/= Step 1: (90,000,000-14,000,000) x3.5% 2,660,000+450,000=
3,110,000/=
3.5. The Electronic Fiscal Device (EFD) System
According to the TRA website27, Electronic Fiscal Device (EFD) are designed for use in business for efficient
management controls in areas of sales analysis and stock control system and which conforms to the
requirements specified by the laws. Different EFDS exist and include:
• Electronic Tax Register (ETR) is used by retail business that issue receipts manually.
• Electronic Fiscal Printer (EFP) is used by computerized retail outlets. It is connected to a computer
network and stores every sale transactions or details made in its fiscal memory.
• Electronic Signature Device (ESD) - is designed to authenticate by signing any personal computer
(PC) produced financial document such as tax invoice. The device uses a special computer
program to generate a unique number (Signature) which is appended to and printed to every
invoice issued by the user’s system.
• Electronic Fiscal Pump Printer (EFPP) - is designed for use in Petrol Stations. It is connected to a
pump and printed every receipt during the sale transactions.
Users are of EFDS are obliged to issue receipt or invoice on each sale and notify any
changes/malfunctioning of the machine to Commissioner within 24 hours. The supplier of the machine
will install, configure and attend the malfunctioning of the machine within 48 hours
3.5.1. The Tanzania Revenue Authority EFD Second Phase
The implementation of the TRA second phase of Electronic Fiscal Devise (EFD) begun in year 2013, with
the aim to expand the number of traders who shall use the EFD system to issue receipts or tax invoice in
every transaction made. The second phase includes non VAT registered traders administered under The
Tax Administration Act 2015. The implementation of the second phase of EFD includes the following
groups;
a) Persons who are not VAT registered with a turnover ranging from TSHS 14 million and above per
year;
b) Traders trading in the Region’s prime areas, identified on the basis of rent payable;
c) Traders dealing with selected business sectors such as Spare Parts, Hardware, Mini
Supermarkets, Petrol stations, Mobile phone shops, Sub wholesale shops, Bar and Restaurants,
Pharmaceutical Stores; Electronic Shops etc.
27 https://www.tra.go.tz/index.php/e-fiscal-devices-efd accessed on 8/1/2019
20
The system is ongoing and the Authority is gradually registering traders basing on traders business
prosperity, experience and capacity.
There are penalties on EFD offences – for details click https://www.tra.go.tz/index.php/e-fiscal-devices-
efd/495-efd-offencesc
TRA charges Interest, Penalties & Offences when tax payers fail to comply with various provisions of tax
laws requirements. For more details click https://www.tra.go.tz/index.php/interest-penalties-offences Accessed
3.6. Tax Clearance Certificates and Business Licensing
3.6.1. Rationale for Applying for a tax Clearance Certificate28
The Finance Act, 2015 reinstated the condition for issuance of Tax Clearance Certificate (TCC) to taxpayer before issued with Business license. The purpose of reintroduction the TCC was to enhance voluntary tax compliance amongst taxpayers. To obtain a TCC the applicant has to fulfil the following conditions: i) All assessed taxes have been fully paid or evidence of agreed instalment payments. And ii) Taxpayer eligible to acquire EFD have acquired EFD. The TCC has the features of Certificate i) Name of the Taxpayer being cleared; ii) Registered Business Activities for which License is sought, iii) The Certificate shall bear a signature of the Commissioner responsible for Domestic Revenue; iv) Official Seal; iii) Tax Clearance Certificate is valid for a period of 12 months from the date of approval after which the certificate is due for renewal. Some of the operational issues relating to TCC include i) Currently all Certificates are being issued manually at all TRA offices, ii) Effort is being made to automate the process whereby the Certificate will issued by the system; iii) Detailed information of the certificate will be made available on the TRA website for verification by other Government bodies (Licensing Authorities – Ministry of Industry and Trade, Trade Officers); iv) Issuance of Certificates are controlled and administered centrally using the system to ease
28 http://hat-tz.org/hattzorg/wp-content/uploads/2015/10/TRA_Tax-Clearance-Certificate-Presentation.pdf accessed on 8/22/2019
Regional Manager, Tanzania Revenue Authority, P.O. Box 25216, Kipata Street (Mnazi Mmoja), Ilala – Dar es Salaam Dear Sir/Madam, RE: APPLICATION FOR TAX CLEARANCE CERTIFICATE Refer to the heading above. We are, by way of this letter, requesting a tax clearance certificate for ……………… (company name) with Tax Identification Number ……………… We are looking forward for your kind consideration and positive response for approval on our application. Sincerely, Managing Director
21
cross checking and comparing of each trader for a given year of income; v) To assist TRA when dealing with increased number of traders population demanding for clearance Tax Officer are required to confirm if all conditions have been fulfilled and vi) Once confirmed, the certificate will be processed, printed and issued to the taxpayer after approval by the Approving organs. The insert below is a sample application letter for the TCC. The Licensing Authority will be required to verify the certificate. The officer must: i) Have a certificate with him before asking the system for verification; ii) The verification of the TCC will be made on the TRA website and it shall have a link that guide any officer to follow; iii) In case of any doubt, the Officer will call the TRA official via a Telephone that is indicated on the Certificate.
3.6.2. The Business Licensing Regime in Tanzania
According to the Tanzania Investment Center (TIC)29, any person who is engaged in business transaction is required to apply for a business license prior operations. Business License in Tanzania are categorized in two groups; i) Group A; All types of business which are regulated or administered by any laws, any business of national or international nature or Governed by policy and ii) Group B, All types of business which are unregulated, any other business which is not of National/International nature or not governed/proceeded by policy. To apply for a business license for all the categories a person need to have the following documents:
• Certificate of Incorporation
• Memorandum and Article of Association.
• Evidence of nationality of shareholders
• Certified lease agreement/title deed
• Power of Attorney in case the shareholders of the company are non-residents
• Tax payer Identification Number (TIN)
• Tax clearance • Sectorial approval in case of any business which is regulated or administered by any laws.
29 http://www.tic.co.tz/businessLicense accessed on 8/22/2019
22
4. Complying to Standards in Tanzania 4.1. What is a standard The guide defines the standard30 as a document, established by consensus and approved by a recognized
body that provides, for frequent and repeated use, rules, guidelines or characteristics for activities or their
results, aimed at the achievement of the optimum degree of order in a given context. Standards should
be based on the consolidated results of science, technology, and experience, and aimed at the promotion
of optimum community benefits. Standards, therefore, relate to the design and manufacturing of
consumer products to ensure they do not represent harm or hazards to consumers31.
4.2. The standards Landscape in Tanzania
There are several standards that an entrepreneur has to comply to; the important ones are the Tanzania
Bureau of Standards (TBS), Tanzania Food and Drug Authority, Occupational Health and Safety Health
(OSHA), and the Weights and Measure Authority (WMA). The section below discusses the functions and
mandate of TBS, OSHA, and WMA.
4.2.1. The Tanzania Bureau of Standards (TBS)
The Tanzania Bureau of Standards (TBS) has jurisdiction over all standards issues in the country. TBS
standards generally follow internationally accepted norms and are harmonized with the other East African
Community members. TBS issues certification of standards (e.g., ISO 9000) mainly for manufactured
products. TBS provides the following standards functions:
• Conformity Assessment- TBS has seven laboratories: the Food and Microbiology Laboratory, the Chemistry Laboratory, the Textile and Leather Laboratory, the Electrical Engineering Laboratory, the Mechanical Engineering Laboratory, the Building and Construction Laboratory, and the Metrology Laboratory.
• Product Certification -TBS implements and certifies third-party standards. TBS product certification schemes require that the products comply with the requirements and characteristics related to quality, material, composition, design, safety, durability, and performance.
• Publication of Technical Regulations -TBS has published more than 600 standards in the fields of
agriculture and food chemicals, textiles, leather, general techniques, electrical engineering,
mechanical engineering, building, and construction.
To reduce the cost of doing business, the budget speech/finance bill 2019 abolished the following fees charged by TBS32:
• Application fees of 50,000 shillings for a TBS mark;
• TBS mark guarantee fees (15 percent of overhead and transport costs);
• TBS mark license fees (50 percent of the cost of transport and testing of a sample from the
market);
• Application form fees of 50,000 shillings for imported goods;
• Calibration of equipment based on industrial metrology fees. The amount payable depends on
the distance covered from the office to the place, e.g., For Dar es Salaam it is 10,000 shillings; and
30 https://www.iso.org/files/live/sites/isoorg/files/archive/pdf/en/standardsandconsumer.pdf accessed on 6/25/2019 31 http://www.businessdictionary.com/definition/product-safety-standards.html accessed on 6/25/2019 32 Ibid footnote 18
23
• Application form on imported cosmetics and medical devices including condoms, syringes, gloves,
cotton wool, and bandage (0.2 percent of transport costs).
The budget speech also amended the Food, Drugs, and Cosmetic Act, CAP 219, in the areas of standards
management which includes quality, food security, and cosmetics so that the Tanzania Bureau of
Standards (TBS) continues to manage the food and cosmetics as it was in 1975. Thus, the Tanzania Bureau
of Standards will be responsible for the general coordination of premises registration, product
registration, certification of products, and import inspection. The Food and Drug Authority (TFDA) will
continue to manage medicines, medical devices, and reagents to increase efficiency.
Annex 5 amplifies the changes, and the table below illustrates the steps, time, and costs of obtaining a
food manufacturing license.
Table 12: The steps, time and costs of obtaining a food manufacturing license
Step No of step
Time (minutes)
Cost TZS
1Submit application for a permit and premises registration 1 20 min 0
2Pay permit and inspection fees 1 20 min 550,000
3Obtain TFDA receipt 1 15 min 0
4Participate in inspection 1 15 days33 0
5Obtain letter to producing trial run 1 10 min 0
6Submit application for registration of food 1 10 min 0
7Pay food registration fee 1 10min 69,098.88 8Obtain TFDA receipt 1 0.5 days 0
9Obtain food registration certificate 1 - 0
10Obtain premises registration certificate and food manufacturing permit 1 10min 0
Source: TIC eRegulations Portal
SME may receive preferential treatment if they receive a letter of recommendation from the SIDO regional
office. SMES recommended from SIDO will not pay for costs levied by TBS for the first three years of their
establishment and for the fourth year they will pay 25%, while in the fifth year they will pay 50% of the
cost and from thereon pay full costs as it is deemed that after five years they might have grown to afford
the costs.
4.2.2. Occupational Health and Safety Health (OSHA)
The Occupational Safety and Health Authority (OSHA)34 is the government agency under the Prime
Minister’s Office-Policy, Parliamentary Affairs, Labor, Youth, Employment, and People with Disabilities. It
has been set up to improve the health and wellbeing of workers and workplaces. OSHA achieves this by
promoting occupational health and safety to prevent occupational injuries and diseases and ultimately
make better productivity.
The role of OSHA is to improve health and safety (wellbeing) of workers, and workplaces by promoting
occupational health and safety practices to eliminate accidents and occupational diseases and hence
achieve better productivity in the workplaces. The agency’s services extend to all workplaces as defined
33 Inspection for Good Manufacturing practice for local factory takes between 2 to 3 days and for foreign factories it take 1 to 2 day. Waiting time until next step: min 15 days - max 15 days 34 https://www.osha.go.tz/pages/introduction?mid=148 accessed on 6/26/2019
24
by the prevailing legislation, i.e., The Occupational Health and Safety No. 5 of 2003 and other subsidiary
legislation. To make a place
of work safer and healthy, in
collaboration with
stakeholders, OSHA
undertake several functions
and roles as shown in Insert.
The finance Bill 2018 abolished the following charges levied by OSHA35:
• The application form fees for registration of working places;
• The registration of working places levy;
• The fines relating to fire and rescue equipment;
• OSHA compliance license of TZS 500,000; and
• The consultancy fee of TZS 450,000. The finance bill also reduced the OSHA levy on the salt sector from TZS 2 million to 1 million.
4.2.3. The Weights and Measure Agency (WMA)
Legal metrology36 (Time and the calendar, Distance and area, Weights and measures) was developed over 5000 years ago. The relationship between the State and metrology was symbiotic. The State needed measurements to provide the information necessary to organize, plan, defend, and tax with efficiency. Currently, metrology offers the following benefits to the economy; I) Reduced disputation and transaction costs. Ii) Consumer protection. Iii) The level playing field for commerce. Iv) Effective stock control; v) Control of fraud in the marketplace. Vi) Full collection of government excise and taxes based on measurement, and vii) full public benefit for commodity exports. In Tanzania, in 1999 and pursuance to the Executive Agencies Act Number 30 of 1997 the Weights and Measures Agency (WMA) was legislated as an Executive Agency responsible for fair trade transactions through certification of Weights and Measures. The Agency is under the Chief Executive as the Commissioner and has the following roles 37(See insert)
35 https://www2.deloitte.com/content/dam/Deloitte/tz/Documents/tax/tz_budget_highlights_2018.pdf accessed on 7/3/2019 36 https://www.oiml.org/en/files/pdf_e/e002-e03.pdf accessed on 6/28/2019 37 http://website.informer.com/visit?domain=wma.go.tz accessed on 6/28/2019
OSHA Functions and Roles Conducting general workplace inspection Conducting health and safety audit
Regulating statutory Inspections (Electrical, Pressure Vessels and Lifting Equipment inspections)
Regulating Workplace Risk Assessment
Organizing and conducting trainings on occupational health and safety
Carrying out researches and surveys on OSH
Disseminating information on occupational health and safety
Consultancy and Advice on OSH matters
Enforcing of safety and health standards and legislation at workplaces
Registering and keeping register of workplace
Scrutinizing and approving workplace drawings/plans
Conducting workplace environmental monitoring
Regulating occupational medical examinations for the workers
Offering (expert opinion in courts of law on OSH matters
Accrediting OHS practitioners Authorizing OHS Private Providers
Investigating accidents and occupational diseases
Assessing psychosocial factors
Initiating ratification of international conventions and treats on OHS
25
The table below presents the legal requirements for packing agriculture crops according to the Weights
and Measures Act of 1982 and subsequent amendments38.
Table 13: Maximum packing Quantities for Agriculture commodities
Beans 80kgs Maize Grain 90kgs
Millet 90kgs Rice 100kgs
Rice Paddy 75kgs Sunflower seeds 40kgs
Wheat Flour 90kg
Source: TCCIA 2004
Attached as Annex 4 is a list of approved Weights and Measure Agency patterns.
WMA is also responsible for labeling. Listed below are vital elements enterprises have to adhere to while
labeling a product:
1. Name introducing the product, e.g., Brown bread, White bread;
2. Name and place of producer/packaging firm;
3. Postal address, Telephone number, email address, website;
4. Net weight of the product (kg, ml, g, mg);
5. At least one official language where the product will be sold;
6. Label sizes should be written according to the subscribed size except for a specific order
7. Leave one space between a number and a letter, for example, 200g (incorrect)) 200 g (correct
The table below demonstrates the do and don’ts of labeling.
Table 14: The do and don’ts of labeling
Label Name The Correct label The incorrect label
Millimeter mm Mm, mm., MM, mms
Centimeter Cm C, Cm, CM, cm., cms
Metre m M, m.,
Gram g GRM, gm, grm, grms, gr, Grams, g., GM, GR
Kilogram kg Kilo, KGM, kgm, kgs, kgms, KGS, KGMs, kg., KG
Milliliter ml or mL ML, Ml, mls, MLs, ml.,mL., Litre L or l L., l., ltr, lts, LTS
Source: Weights and Measures Agency 2019
38 http://www.best-dialogue.org/wp-content/uploads/TCCIA-2004-05Tanzania-Weights-and-Measures-Practices-ECIDAI.pdf accessed on 7/5/2019
• Protect consumers in trade, safety, health and environment about Legal Metrology;
• Protect society from the consequences of false measurements in public and private transactions;
• Approve or ensure approval by other designated institutions measuring instruments to be used for a public or private sale in the trade, safety, health, and environment sectors;
• Control the use of measuring instruments in public and private transactions
• Control pre-packaging of products;
• Liaise with regional and international organizations with similar objectives;
• Give effect to the decisions and recommendations of the OIML Council and Committee about Legal Metrology;
• Provide information on Legal Metrology in general and
• Ensure that Legal Metrology standards are traceable to national and International measurement standards.
26
4.3. Environmental Management Standards
Environmental management standard is defined39 as an independent, third-party, and verifiable set of
specifications (such as ISO 14001 or Responsible Care) which provide publicly recognized means to an
organization to demonstrate its commitment to maintaining and enhancing the quality of environment.
In Tanzania compliance to environmental management standards is governed by the Environmental
Management Act was passed by the National Assembly in 2004. The Act repeals the National Environment
Management Act, 1983 and provides for the continued existence of the National Environment
Management Council. Under the Act, local authorities are supposed to be the principal executive agencies
of environmental policies and regulations. These local authorities are argued to work with environmental
NGOs and community-based organizations (CBOs) which are coordinated by the Vice President’s Office
(VPO) and the Tanzania Association of Non-Governmental Organizations40.
To effectively manage the Environmental Management Act (2004), the Government issued the Environmental Management (Environmental Impact Assessment and Audit) (Amendment) Regulations, 201841. One of the features of the regulation is section 4A.-(1) that classifies the projects that have to be registered for Environmental Impact Assessment and Audit into the following categories, namely: a) “A” category for Mandatory Projects; b) “B1” category for Borderline Project; c) “B2” category for Non-Mandatory; and d) “Special Category. Most of the MSMEs that the ENGINE project is dealing with fall under Category “B2. According to schedule one of the regulations category “B2” comprises the following projects as illustrated in the table below. Table 15: List of Type B2 Projects
List of small-scale activities and enterprises that require registration but shall not require Environmental Impact Assessment. Further, the projects shall not require screening and scoping, rather, the Project Brief shall be examined and issued with an Environmental Impact Assessment Certificate
1. AGRICULTURE a) large Scale cultivation (<50 to 10 Ha);
(i) water resources development projects: (ii) water supply (command area (<200 to <50
Ha; (iii) flood control (command area (<200 to <50
Ha); (iv) irrigation, drainage (command area (<200
to <50 Ha); and b) Large scale mono-culture (cash and food crops) (<50
Ha). (i) Floriculture (<2 Ha).
2. LIVESTOCK AND RANGE MANAGEMENT a) large Scale Livestock movement (< 1000 to <500
cattle); and b) Intensive livestock rearing units (< 500 to < 100
herd. 3. FORESTRY Selective removal of single tree species Ministry of Natural Resources (<100 tree species). 4. FISHERIES Industrial fish processing and storage (<10 tons per day )
5. TOURISM AND RECREATIONAL DEVELOPMENT Camping activities 6. FOOD & BEVERAGE INDUSTRIES a) slaughter houses / abattoirs (All projects when number of b) animals slaughtered are <10 per day);
a. tobacco processing; and b. Canned fruits and sauces.
7. TEXTILE INDUSTRY Cotton & Synthetic fibers (All stand-alone knitting and weaving units). 8. BUILDING & CIVIL ENGINEERING INDUSTRY Schools, dispensaries, health-centers: a) dispensaries and health-centers; and b) All School projects (l <360 students). 9. METAL AND ENGINEERING INDUSTRY Garages 10. ELECTRICAL AND ELECTRONICS INDUSTRIES Installation and expansion of communication towers. 11. WASTE TREATMENT AND DISPOSAL a) municipal Solid Waste; b) construction of composting plant; c) municipal Sewage; and d) (d) Night soil collection and treatment.
39 http://www.businessdictionary.com/definition/environmental-management-standard.html accessed on 8/30/2019 40 http://www.lead-journal.org/content/07026.pdf accessed on 8/30/2019 41 https://www.nemc.or.tz/uploads/publications/en1549556787-Revised%20-%20EIA%20and%20Audit%20Regulations%202018%20-%20NEW.pdf accessed 8/30/2019
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5. Trading Across Borders A study conducted by UNCTAD42 on informal trade cross-border between Tanzania and Malawi/ Zambia compliments how this type of trade supports livelihoods, creates jobs and contributes to food security, eclipsing even formal business at specific border posts. It argues that enabling cross-border traders – most of whom are women – to flourish and to integrate into the formal economy would not only support gender equality, but would also boost trade and the private sector and, in turn, economy-wide growth and development. The Customs and Excise Department of the Tanzania Revenue Authority (TRA) is an administrator of all
taxes on international trade. The taxes include Import Duty, Excise Duty, and Value Added Tax (VAT) on
imports43.
• Import Duty is a tax levied on imported goods. The duty is usually calculated as an ad-valorem
rate on C.I.F value of goods imported into the country and is collected before goods leave the
entry point into the country and bonded warehouses.
• Excise Duty is levied on certain consumer goods on importation. The traditionally excisable goods
are goods whose consumption is seen by society as immoral, i.e., beer and cigarettes, and goods
whose consumption creates negative externalities to the community, i.e., petroleum. In Tanzania,
apart from the traditional excisable products, soft drinks and motor vehicles are excisable for
revenue generation purposes. Excise duty is also charged on specific or ad-valorem rate, and the
tax base for the ad-valorem rate is the C.I.F value plus the import duty.
• Value added tax is a consumption tax charged on taxable goods, services immovable property of
any economic activity whenever value is added at each stage of production and at the final stage
of sale. VAT is charged on both locally produced goods and services and on imports. Value Added
Tax is charged by persons registered for VAT only. The VAT is charged on any supply of goods,
services and immovable property of any economic activity in Mainland Tanzania where it is a
taxable supply made by a taxable person in the course of economic activity carried by him. The
importation of taxable supply from any place outside Mainland Tanzania shall be charged VAT and
normal Customs Laws and procedures shall apply. All supply consumed or enjoyed outside
Mainland Tanzania shall be zero-rated upon proof. VAT is chargeable on the taxable supplies of
goods and services. The rates are 18% for standard rated supplies, and 0% for exports of goods
and services.
5.1. Importing Goods in Tanzania
It is advisable that importers should liaise with relevant government agencies for approval depending on
the nature of goods imported. These government agencies include Ministry of Agriculture, Food Security
and Cooperatives, The Government Chemist Laboratory Agency, The Tanzania Food, and Drug Authority,
The Ministry of Livestock and Fisheries Development, Ministry of Natural Resources and Tourism,
Tanzania Bureau of Standards and Tanzania Atomic Energy Commission and the Fair Competition
Commission.
The process of importing goods in Tanzania involves a five-step process if these are imported through
the use of a clearing agent. The table below lists the steps, the time, and the costs.
42 https://unctad.org/en/PublicationsLibrary/ditc2018d3_en.pdf accessed on 7/1/2019 43 http://tanzania.eregulations.org/menu/287?l=en accessed on 7/2/2019
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Table 16: The steps, time and costs of importing goods via a Clearing Agent in Tanzania
Process Number of steps
Time Cost USD
Clearance of goods (1)
1Submit documents for clearance 1 1 day 0
Pay import and excise duties (1)
2import and excise duties 1 15 min Import duty44 + Excise duty45 +
Pay other charges (2) 3Pay other charges
1 15 min port charges include wharfage, storage, handling, and removal46+Shipping Charges47 +Agency fees48 = Transport to the buyer to premises49
4obtain payment receipt 1 3-7 days
Obtain goods (1)
5Inspect and obtain goods 1 45 min
Source: Constructed from TIC E Regulation Trading In Tanzania
44 import duties= or USD 0 - 10 % goods-value import duty for semi-finished goods or USD 0 - 25 % goods-value Import duty on final consumer or finished goods. USD 0 - 18 % goods-value VAT on taxable imported goods and services 45 Excise duties= USD 0 - 10 % goods-value Excise duty applicable to saloons and station wagon motor vehicles with engine capacity in excess of 2000cc or USD 0 - 30 % goods-value excise duty applicable to importation of consumer luxuries and cosmetics USD 0 - 18 % goods-value VAT on taxable imported goods and services 46Port charges include warfage, storage, handling and removal= TZS 73,609.05 1.6 % goods-value USD 32 - 1.6 % goods-value wharphage charges 2,000 or TZS 9,201.13 USD 4 wharphage charges per metric tonne. TZS 181,722.35 USD 79 handling charges for container of 20 feet or TZS 411,750.63 USD 179 handling charges for container of 40 feet or TZS 13,801.70 USD 6 handling charges for loose cargo e.g. cars per cubic meter TZS 9,201.13 USD 4 Removal charges payable 7 days after vessel discharge of goods per cubic meter TZS 46,005.66 USD 20;storage charges for a 20 feet container if goods stays beyond 7 days of grace period after being discharged from the ship. or TZS 92,011.31 USD 40 storage charges for a 40 feet container if goods stays beyond 7 days of grace period after being discharged from the ship or TZS 2,300.28 USD 1 storage charges for a loose cargo per cubic meter 47 shipping cost TZS 4,507,602.70 USD 1,960 Basic freight rate for imported 20 feet container from USA/CANADA or TZS 2,989,736.48 USD 1,300; Basic freight rate for imported 20 feet container from Arabian Gulf or TZS 1,343,081.62 USD 584 Basic freight rate for imported 20 feet container from Europe or TZS 1,812,240.27 USD 788 Basic freight rate for imported 20 feet container from Far East or TZS 1,000,411.82 USD 435 Basic freight rate for imported 20 feet container from India/Pakistan TZS 2,673,514.35 USD 1,162.5 Basic freight rate for imported 20 feet container from South Africa 48 Agency fee TZS 0 1.5 % goods-value USD 0 - 1.5 % goods-value agency fee. Minimum is 200 USD 49 transport to the buyer's premise TZS 0 0.2 % goods-value USD 0 - 0.2 % goods-value transportation cost
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5.2. Exporting Goods out of Tanzania
To measure the trading across border data, the guide uses the Doing business methodology 201950. The method measures the time and cost (excluding tariffs) associated with three sets of procedures—documentary compliance, border compliance, and domestic transport—within the overall process of exporting or importing a shipment of goods as in the figure below. Figure 1 Division of costs and time for exporting from Mbeya to Malawi
Mbeya
Malawi
Source: Doing Business 2019 Methodology
The table below depicts the steps, time, and costs an exporter incurred in exporting from Tanzania. Table 17: The steps, time and costs an exporter incurred in exporting from Tanzania
Process Number of steps
Time (hours)
Cost USD
Documentary compliance (3) 96 (4days) 1160
1. Obtaining, preparing and submitting documents during transport, clearance, inspections, and port or border handling in Tanzania
1
2. •Obtaining, preparing and submitting documents required by destination economy and any transit economies
1
3. Covers all documents required by law and in practice, including electronic submissions of information
1
Border compliance (3) 96 (4days) 275
4. Customs clearance and inspections 1
5. Inspections by other agencies (if applied to more than 20% of shipments)
1
6. Handling and inspections that take place at the economy’s port or border
1
Domestic transport (3)
7. Loading or unloading of the shipment at the warehouse or port/border
1
50 https://www.doingbusiness.org/en/methodology/trading-across-borders accessed on 7/1/2019
Domestic Compliance
Border Compliance
Documentary compliance
30
8. Transport between the warehouse and port/border 1
9. Traffic delays and road police checks while shipment is en route 1
Source: Doing Business Tanzania 2019- Trading Across Borders
The following documents are needed for exporting goods;
Bill of lading Certificate of origin
Commercial invoice Custom Export declaration
Release order Export permit
Fumigation Certificate Phytosanitary certificate
Letter of authorization Packing list
SOLAS51 Certificate
5.3. Simplified Trade Regimes
SMES exporters in the project area may benefit from simplified trade regimes (STRs). STRs are designed to respond to the challenges of aligning informal trade with official regulations, and this has motivated several countries in sub-Saharan Africa to introduce specific trade facilitation measures at the regional level. The primary outcome of the is to encourage small scale traders to switch from informal to formal trade by lowering the costs of legal import and export procedures and easing the official trade rules. For example, ten countries of the Common Market for Eastern and Southern Africa (COMESA) members (Burundi, the Democratic Republic of the Congo, Ethiopia, Kenya, Malawi, Rwanda, Sudan, Uganda, Zambia, and Zimbabwe) have taken steps to implement the STR. The STRs have enabled Small-scale consignments of eligible goods to be exempted from duty and subject to a simplified certificate of origin.29 Processing fees have also been considerably reduced, and are now set at US$152. The East African Community (EAC) in 2007 reduced certificate of origin for goods valued at less than US$2,000 and a current list of eligible products. The STR concept was initiated after recognizing that the existing rules under the EAC Customs Union were mostly benefiting large traders, whereas 33 percent of cross-border trade in EAC countries is characterized by transactions with a value below US$2,00053.
Other STR measures include implementation of trade facilitation through One-Stop Border Posts and the traveler’s rebate scheme. One-stop border posts respond to the challenge of reducing the formalities, costs, and time to cross borders. They also aim to prevent irregular practices such as informal trade and smuggling and to provide an additional incentive to the formalization of small scale, cross-border traders. SMEs in the project area could benefit from the advantages offered by the one-stop border posts of established at the Tunduma/Nakonde Tanzania and Zambia border post that is operational and the proposed Kasumulu/Songwe border between Malawi and the United Republic of Tanzania. Equally, small-scale traders to avoid any administrative cost and burden related to trade transactions use a traveler’s rebate scheme in place in many countries to accord private travelers a tax-free allowance on small amounts of merchandise for personal use, regardless of its origin.
51 International Convention for the Safety of Life at Sea (SOLAS), 1974 52 WTO (2016); Trade Policy Review: Malawi. Revision. World Trade Organization. Geneva. 53 Government of Rwanda (2013); Ministry of Trade and Industry report on cross-border trade.
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6. Compliance to Local Government Authority and Sector Based Levies
6.1. Local Government Levies
According to the Local Government Finances Act (2002), Local Governments have the mandate to raise certain revenues from taxes, levies, and fees. The Local Governments set their revenue policy within limits set by the Central Government. They retain all their receipt and use it as part of their budgets these revenues do not form part of Central Government revenue.
The taxes, levies, fees and revenue sources which Local Governments are mandated to raise under the Act fall under Taxes on Goods and Services, Taxes on Specific Services, Business, and Professional Licenses, Motor Vehicles. Other LGA revenue sources are; Other Equipment and Ferry Licenses, Other Taxes on the Use of Goods, Permission to Use Goods, Turnover Taxes, Entrepreneurial and Property Income, Administrative Fees and Fines, Penalties and Forfeitures.
The table below summarizes the taxes that Local governments are allowed to levy. Table 18: Allowable levies LGA can levy on Citizens
Tax, levy Category Levy/Tax
1. Taxes on Goods and Services
1. Crop cess cash crops a cess over 3%
2. Crop cess food crops a cess over 3%
3. Forest products – cess on sellers cess on timber product, e.g., furniture and like
4. Plying fee for transportation of crops not exceeding one tone from one district to another
2. Taxes on Specific Services 5. Guest house levy
3. Business and Professional Licenses
6. Commercial fishing license fees
7. The intoxicating liquor license fee
8. Private health facility license fee
9. Taxi license fee
10. Other business licenses fees
4. Motor Vehicles, Other Equipment, and Ferry Licenses
11. Vehicle license fees 12. Fishing vessel license fees
5. Other Taxes on the Use of Goods, Permission to Use Goods
13. Forest produce license fees
14. Building materials extraction license fee
15. Hunting licenses fees
16. Scaffolding / Hoarding permit fees
6. Turnover Taxes 17. Service levy
7. Entrepreneurial and Property Income
18. Dividends
19. Other Domestic Property Income 20. Interest
21. Land rent
8. Administrative Fees and Charges 22. Market stalls/slabs dues
23. Magulio fees
24. Auction mart fees
25. Meat inspection charges 26. Land survey service fee
27. Building permit fee
28. Permit fees for billboards, posters or hoarding
29. Tender fee
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30. Abattoir slaughter service fee
31. Artificial insemination service fee 32. Livestock dipping service fee
33. Livestock market fee
34. Fish landing facilities fee
35. Fish auction fee
36. Health facility user charges
37. Clean water service fee 38. Refuse collection service fee
39. Cesspit emptying service fee
40. Insurance commission service fee
41. Revenue from renting of houses
42. Revenue from renting of assets
43. Parking fees
Sources: Ministry of Finance
6.2. Sector-Based Levies
There are other government ministries, authorities that charge levies that entrepreneurs have to meet. For the sake of simplicity, the guide will present the transport sector, tourism, small mining, health (pharmacies), Education (private schools) and the livestock (Dairy Industry – milk and milk products registration.
6.2.1. Transport Sector -SUMATRA
In ENGINE project areas, several entrepreneurs are involved in the transport sector, and the sector has
organized associations at the region and national level. The Surface and Marine54 Transport Regulatory
Authority (SUMATRA) is a Multi-sectorial regulatory agency which was established by an Act of Parliament
(No.9) of 2001. SUMATRA Act came into force on 15th August 2004 as per Government Notice No. 297
published on 20th August 2004. The SUMATRA Act, sets out the following as role of the Authority55; a)
promoting effective competition and economic efficiency; b) protecting the interests of consumers, c)
protecting the financial viability of efficient suppliers, d) promoting the availability of regulated services
to all consumers including low income, rural and disadvantaged consumers. The other roles are: e)
Enhancing public knowledge, awareness, and understanding of the regulated sectors including as to (i)
the rights and obligations of consumers and regulated suppliers; (ii) the ways in which complaints and
disputes may be initiated and resolved; (iii) the duties, functions, and activities of the Authority. Other
roles are f) taking into account the need to protect and preserve the environment, g) taking into account
the need to regulate safety and security in the transport sector.
Relating to the functions of issuing, renewing, canceling and amending Road Service Licenses, a bus
operator to be licensed to operate a passenger services operations has to pass through the following
process as in the table below.
54 The Parliament approved the Tanzania Shipping Agencies Act 2017 (the Act) which will regulate the maritime transport industry in Mainland Tanzania. SUMATRA is now responsible to regulate surface transport https://www.clydeco.com/insight/article/establishment-of-the-tanzania-shipping-agencies-corporation accessed on 7/11/2019 55 https://www.sumatra.go.tz/index.php/about-us/roles-and-functions accessed on 7/3/2019
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Table 19: SUMATRA Process of Applying and Issuance of a Road Service License:
Step Requirement Authority
Application Form (2)
1. Fill application forms in duplicate Application form SUMATRA
2. Submit the duly filled forms Vehicle Registration Card Vehicle Inspection Report Valid Insurance Certificate Previous License ( for renewal)s
SUMATRA offices and Regional Offices (RAS)
ISSUANCE OF LICENSES
a) Regional and Urban Licenses Regional Teams issue the Regional Licenses in the Regions which have no SUMATRA Branch or Zonal office.
b) Pan Territorial Licenses Zonal Offices and Headquarters
c) Time Tables Zonal offices issue Pan - Territorial Time-tables in consultation with the Headquarters
Source: Constructed by Author from SUMATRA website
The Table below shows the costs of acquiring a SUMATRA Road Service License that is issued based on the size of a vehicle carrying capacity, in-country services, and foreign and tourism services. Table 20: Fees charged by SUMATRA for Road License Service fees for Passenger Vehicles
Bus Carrying Capacity In Country Services For Foreign and Tourism Services Annual
Fees(TZS) Fees for 3
Months (TZS) Annual Fees
(USD) Prices for 3
Months (USD
Normal Bus
Less than 15 passengers 35,000 12,000 50 15
15 passengers but not exceeding 25 50,000 20,000 80 20
25 passengers but not exceeding 45 90,000 30,000 145 35
45 passengers but not exceeding 65 100,000 35,000 150 40
65 passenger and more 140,000 46,000 160 45
Application form fee 10,000 10,000 10 10
Application fee for changing the route 50% of the license fees
Fees for Luxury Buses
More than 25 passengers 150,000 50,000 180 60
Application form fee 10,000 10,000 10 10
Application fee for changing the route 50% of the license fees
Other Charges
Reissuing a new license due to loss, destroyed or dirtiness 20,000/=
Issuing a timetable 10,000/=
Redundant license 10,000/=
Source: SUMATRA website
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6.2.2. The Tourism Sector- Tourism Agent and Licensing Compliance
The government of Tanzania has deliberated to promote tourism in the Southern Highlands after recognizing that Southern Tanzania has a vast endowment of tourism assets56. To implement the strategy, the competencies and awareness of operators in the tourism sector have to be developed. One of the pillars guiding the tourism sector is the Tourism Agents (Registration) and Licensing Regulations, 201557.
Section 3(1) of the regulations require a person who wishes to carry on a tourism agent business shall make an application for a certificate of registration to the Director of Tourism. Section 11 (1) requires a person who has been a certificate of registration as a tourism agent under regulations to make an application for a license to the Tanzania Tourist Licensing Board.
The table below tracks the steps, time, and costs of obtaining a tourist registration and license, and the documents required food manufacturing license process. Table 21: The steps, time and costs of obtaining a tourist registration and license
Step Number of steps
Institution Time Costs
Travel agent license registration (7) 15-22 days
1Submit request for registration 1 MNRT
2Physical inspection of business establishment (office) & vehicles
1 Customer premise
3Obtain certificate of registration 1 MNRT
4Pay licensing fees 1 MNRT TZS 4,606,000.47
5Obtain receipt 1 MNRT
6Submit signed invoice 1 MNRT
7Obtain tourism license (travel agent) 1 MNRT
Source: Constructed by Author from TIC eregulations
The following documents are required for the next steps:
• Step1: i) Registration and license application form; ii) Taxpayer Identification Number (TIN) Certificate; iii)The project’s Business Plan/Feasibility Study; iv) Proof of having not less than two (2) Tanzanian employees; v) International air transport Association certificate (IATA); vi) Lease agreement and vii) Extract from register; viii) Certificate of incorporation, ix) International air transport Association certificate (IATA)
• Step3: x) Certified Passport;
• Step 5: xi) Bank slip (NMB); xii0 Payment invoice;
• Step 6: xii) Signed payment invoice
The results of the above effort are Tourism license.
6.2.3. The Mining Sector- Compliance of Artisanal and Small Miners
The government of URT since the 1980s, has undertaken structural economic reforms aimed at promoting socio-economic development. Despite the achievements, the mineral sector continued to face challenges, particularly low integration with other areas of the economy; little contribution to the GDP compared to
56 http://hat-tz.org/hattzorg/wp-content/uploads/2015/12/A-Strategy-for-Tourism-Development-in-Southern-Tanzania_Final.pdf accessed on 3/7/2019 57 http://tanzania.eregulations.org/media/Tourism-Agents-Registration-and-Licensing-Regulations-2015-1.pdf accessed on 3/7/2019
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the sector growth; slow development of small scale mining; low capacity of the Government to administer the sector; low level of value addition of minerals; and environmental degradation. Based on the challenges, the government developed a mineral Policy of Tanzania 2009. The mission of the policy is: to set policies, strategies, and laws; regulate the mineral exploration, production, trading, value addition and mineral actors for sustainable development of mineral resources; and integrate with other sectors of the economy58. The fifth government, on the guidance of a win-win situation in the mining sector, passed various legislations to see that Tanzania gains equitably as investors from mining resources. One of such a measure that has compliance implications to artisanal and small miners is the Mining (Mineral and Gem Houses) Regulations, 2019.59 Section 4(.1) of the regulations establishes Mineral and Gem Houses in each geographical administrative area of the region or district. Part 5(1) sets the rules of the mineral and GEM Houses that among others include:
a) a platform for mineral auction, minerals exchange, minerals warehouse and minerals clearinghouse; and
b) a one-stop center for all mineral transactions that provide; Section 6(1) regulates the sales of by stating that a person who wishes to buy or dispose of mineral may do so through the Mineral and Gem Houses. Section 6(3) provides incentives of artisanal and small miners who transact - Artisanal and Small scale miners who dispose of minerals through the Mineral and Gem houses shall be exempted from paying withholding tax, and Value added tax (VAT) by the Income Tax Act, and the Value Added Tax respectively. Part IV of the regulation sets the operations of the Mineral and Gem Houses. The table below explains the process and the requirements of trading under the Mineral and Gem House. Table 22: The process and the requirements of trading under the Mineral and Gem House
Step/Process Authority Requirements
Mineral Auction
1. set date and time for inspection of minerals which are subject to auctions in the warehouses
Commissioner 1. present to the Commission receipt of payment of fees for participating in the auction
2. A company or firm participating in the mineral auction may appoint up to three persons in the mineral auction one of whom shall be a representative authorized to place bids.
3. The Commission determines the rates of fees to be paid by participants at the mineral auction
2. set date and time for mineral auctions
Commissioner
3. determine how the auction may be conducted
Commissioner
Viewing of minerals
4. Participants in the auction may view the mineral
Registered buyers
4. Each registered buyer may bring one or more than one staff for viewing the minerals.
5. The process of viewing minerals shall be on first come first served basis
Bidding
58 http://www.teiti.or.tz/wp-content/uploads/2014/03/0014_11032013_Mineral_Policy_of_Tanzania_20091.pdf accessed on 7/4/2019 59 https://www.madini.go.tz/wp-content/uploads/2019/07/SUPP-GN-NO-418-24-MAY-2019-THE-MINING-MINERAL-AND-GEM-HOUSES-REGULATIONS-2019.pdf accessed on 7/4/2019
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5. Fill the bidding form Registered buyers
6. Duly filled Bidding Form BF.4 specified in the Schedule of the Regulations
6. Commit to Pay Registered buyers
7. Make declaration committing to pay the amount about the disposing price without delay
Return of the bid forms
7. Return bid form Commissioner 8. The bid form shall be returned to the Commission in a sealed envelope not later than 15.30 hours on the day set as the deadline for submission of the bid form.
9. The Commission shall not accept a bid form from any person after the time prescribed under sub-regulation (1
Announcement of auction results
8. Announcement of buyer
Commissioner 10. eligible buyers announced on the same day of the auction after completion of evaluation or analysis of the submitted bid forms
11. The buyer with the highest price shall be declared as a winner and be offered to buy the relevant minerals
12. If the highest bidder wins all the lots s/he will be allowed to buy only 75%
9. Winner settle payment 13. settle payment before the deadline as may be specified in the bid form; and
14. Pay royalty, taxes, and other fees by the provisions of the Act.
Source: Constructed by the author from the Mineral and Gem House Regulations 2019
6.2.4. The Health Sector- Registration and Compliance Requirements for a Pharmacy
Tanzania has two tiers of pharmacies, i.e. retail pharmacies and accredited drug dispensing outlets (ADDOs).
• Retail pharmacies
• Include any premise from which services requiring a trained pharmacist are dispensed,
including community, institutional, and wholesale pharmacies.
• Must be owned by a pharmacist and operate under rules that dictate hygiene and
recordkeeping practices.
• Are dictated by ownership requirements,
• Outlets must have staff
with at least a degree in
pharmacy who can
conduct or supervise
sales.
• Must be licensed and are
required to pay annual
fees
• Must follow the rules
about hygiene,
recordkeeping, and
licensure
Steps for obtaining a Pharmacy Premises permit
Step Authority Time Cost TZS
• 1Submit application form for pharmacy permit
TFDA
• 2Pay for permit and inspection fees
NMB 70,000/=
• 3Obtain TFDA receipt TFDA
• 4Submit receipt TFDA
• 5Participate in inspection Premises
• 6Obtain retail business permit
TFDA
37
• The insert above depicts the steps and costs for obtaining a permit for the pharmacy
premises.
• The required documents include i) Application for license form 0003 (TFDA); Ii) Premise
Registration form 0001 (TFDA). Iii) NMB Bank slip. iv) TFDA payment receipt and VI) TFDA
profoma invoice.
• The results is a Retail Business permit.
• A cost of 70,000 consists of TZS 50,000 Inspection fee for goods at owners premise and
TZS 20,000 Annual dealer permit for Retailers.
• Accredited drug dispensing outlets (ADDOs)
• ADDOs are outlets where non-prescription over-the-counter medicines are sold.
• Are certified to operate in line with government standards developed in 2009.
• Can be owned by any
Tanzanian citizen older than
18 who have undergone
training conducted by the
Tanzania Food and Drug
Authority.
• Must follow the rules about
hygiene, recordkeeping, and
licensure.
• They face additional
regulations about their
physical size and location to
ensure that they are
conveniently located in rural,
peri-urban, and other
underserved areas with
limited access to medicines.
• While ADDOs must be
accredited and their staff
trained, there is no
requirement for supervision
of staff by a qualified
pharmacist.
• To access the ADDO license,
an operator has to follow the
permit application process
to establish ADDO as in the insert.
Both the pharmacy and ADDO facilities face restrictions on advertising medicines. They both receive licenses to operate from and are inspected by the Pharmacy Council. If violations are found, both pharmacies and ADDOs are subject to loss of licenses, fines, and imprisonment. Pharmacies and outlets abide by similar rules regarding storage and expiration of pharmaceutical products, including sales of
38
counterfeit products. Neither level is governed by laws that regulate prices. All pharmaceutical products sold in Tanzania are registered and inspected by the Tanzanian Food and Drug Authority. Business License levied on pharmacies by Local Government Authorities Part II of the Finance Bill 201460 amended the Business License Act (No.25 of 1972). Section 8 of the Act Amended the Principal Act by substituting it with a new Schedule. Under Category B- Fees to be collected by Local Government Authorities, the selling medicine fee structure is as follows:
Business category Business description Fee for Principal License TZS
Fees for Subsidiary License TZS
10. General Trading Selling Medicine retail
Part i Poison shop 200,000/= 100,000/=
Part ii Poison shop 100,000/= 80,000/=
6.2.5. Registration and Compliance in the Education Sector – Registering a Private School
The establishment and creation of a private school in Tanzania are guided by the guideline
for the registration of schools, namely “Mwongozo wa Usajili wa Shule
(1982)”. The stages are summarized as follows:
STAGE ONE: Permission to build a School by the Ministry
• An application in writing is made by a client to the Commissioner of Education under the flying seal of District Executive Director and the Regional Administrative Secretary requesting a permit to build a School. The request letter should have the following attachments:- • Client’s project proposal; • Copy of a school site plan; Copies of buildings drawings which are certified by the District
Engineer, • Certificate of evidence of ownership of land from the recognized sector. The land area should
be 3 ½ areas at town and 7½ at village area, building permit; • Bank statement amounting to Shillings 62million and above; • Certificate of incorporation/registration and memorandum of understanding or articles of
Association/partnership deed for the school which is owned by partners, company or institute.
• If there is a need for using the name of a saint, the permission should be submitted from the recognized religious leaders. • Permit to build a school is granted by the Commissioner of Education by issuing a written
document. • Construction of a School can begin after a permit is granted.
STAGE TWO: Approval of Owner and Manager of a School This stage is only for schools which have already completed step one and entails the following:
• Application by the client is made in form No.RS.661 and RS.762 to the Ministry seeking for the approval of the owner of school and manager of school respectively.
60 https://www.tra.go.tz/tax%20laws/Finance%20Act%202014.pdf accessed on 7/13/2017 61 http://www.moe.go.tz/en/component/jdownloads/send/25-various-forms-fomu-mbalimbali/214-form-rs-6.html accessed on 7/13/2019 62 http://www.moe.go.tz/en/component/jdownloads/send/25-various-forms-fomu-mbalimbali/215-form-rs-7.html accessed on 7/13/2019
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• This is done after all the necessary buildings and infrastructure has completed to at least 75 percent and above.
• The buildings are classrooms, Administration block/offices, library, students’ toilets, and staff toilets, hall, and laboratories.
• The forms duly filled and recommended by the Regional and District Authorities should be accompanied by the following reports:-
• The District Building Engineer, • the District Health • Officer and the District Chief Inspector of Schools.
• The Ministry approves the owner and manager of school by issuing a written notice to the respective persons.
STAGE THREE: Registration of a School The step is only for schools that have already completed phases one and two:
• Application by the client is made to the Ministry to seek registration of his/her school or Institution. This is done after the owner has put in place all necessary physical infrastructures, furniture, teaching/learning materials and has adequate teachers, and the client has to fill in form no. RS863 which must be approved by the Zonal Director of Quality Assurer
• Owner of schools that qualify for registration is issued with written notifications and registration certificates. The registration certificates carry the registration number of the school.
Local Authorities are delegated authority to register Government pre-primary, primary school, and Adult education centers. The Ministry is however notified of the particulars of the registered Schools.
Registration of International Schools
The Ministry does not register International Schools but recognizes schools that have been approved by any of the institutions that register International schools like the European Council for International Schools (ECIS) or Association of International Schools in Africa (AISA). Both institutions have set criteria for assessing schools or organizations needs to register with them, and membership is awarded only when the registration criteria are met with the applicants.
Registration procedures
• The Ministry must first register the schools as a regular school,
• The Owners should submit to the Ministry are quest seeking a permit to apply to become international School.
• If permission is granted the school in question proceeds with application modalities with one of the institutions registering international schools.
• Once a school is registered as international, owner notifies the Ministry in writing providing relevant copies of the evidence for the said registration.
63 http://www.moe.go.tz/en/component/jdownloads/send/25-various-forms-fomu-mbalimbali/216-form-rs-8.html accessed on 7/13/2019
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Registration of Religious schools/institutions Any religious institution/organization wishing to establish the religious school/institutions must first follow the three stages mentioned earlier on but will be required to fill in form No.RS.964 instead of form No.Rs8.
NOTE: Any violation of the Act in this regard is punishable as spelled in Part VIII of the general provision of the Education Act no. 25 of 1978 section 59. Who is involved in the Process of Registration of Schools?
• School inspectors, District Education personnel, District Civil Engineers and District Health Officials- have a collective central role to play in certifying the preparedness of the client to establish a school and the safety and health of the learning environment. Reports from these officials help the District Councils/Municipals to access and make requisite recommendations as they forward the requests for ownership and management of schools or hiring teachers to the relevant Regional Education Officers. The reports also help the Ministry to make an informed decision on the client’s request.
• Village Government Officials and Ward Officials-provide initial official information and the need for the service in their locality and certify whether or not the owner of schools is the legal owner of the land where the school is to be built.
• The Zonal Chief Inspector of Schools (ZCIS)-receives a request from the owner of schools for its registration. The Zonal Chief Inspector of Schools carries out an inspection to access the capacity of the management and administration of the school to implement effectively.
• Local Authorities and Regional Administrations-oversee all developmental issues of the areas under their jurisdiction. They have a direct role of making decisions on the type of programs to be run their areas and meet some of their running and administrative costs such as for the construction of primary schools and Community day secondary schools. They play a leading advocacy role to the communities towards developing the education sector. They feature well during the process of approval of management and ownership of schools and registration of schools
• Chief Education Officer and the Minister for Education-During the process of approval of management and ownership of schools and registration of schools, the Chief Education Officer approves manager of a school and the registration of schools and licensed teachers while the Minister approves owner of the school.
Registration of Teachers Registration of teachers is done by The Education Act no. 25 of 1978 part VI, The Education Amendment Act no. 10 of 1995, and The Education Regulations 2002.
Three categories of personnel for teaching are registered:
• Trained teachers in recognized teachers colleges or institutions,
• Untrained teachers applying to teach
• Qualified teachers of foreign origin applying to teach in Tanzania
• Trained teachers
64 http://www.moe.go.tz/en/component/jdownloads/send/25-various-forms-fomu-mbalimbali/217-form-rs-9.html accessed on 7/13/2019
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• A trained teacher o Signs an agreement with the employer according to the Teachers’ Service Commission
regulations 1990 when he/she takes up his/her service post for the first time. o He is registered in a specific register (register part. II) As a probationary teacher. o After completing two years of probation, he is registered under Registration part I of the
register of teachers who have been confirmed to the service post and he is issued with a Registration Certificate
• Untrained teachers and trained teachers of foreign origin o Requests are made by individuals wishing to be issued with teaching licenses through
relevant school managements to the ministry via the Zonal Chief Inspector of schools and Chief Inspector Schools.
o The requests indicate particulars of individuals: professional, academic, and personal, including whether or not they are nationals or foreigners.
o Zonal and Chief Inspectors of schools scrutinize requests and make recommendations to the Chief Education Officer,
o A select committee makes further scrutiny of the applications of the ministry chaired by the Director of Administration and Personnel and necessary advice to the Minister made,
o Minister approves the prospective requests for issuing teaching Licenses o The Chief Education Officer then endorses and issues teaching licenses o Licensed teachers are registered in Registration part III of the register of teachers.
6.2.6.. The Livestock Sector- The Dairy Board Industry Act The Dairy Industry Board Act (2004)65 provides for the production, regulation, and promotion of the dairy; establishment of the Tanzania Dairy Industry Board and repeals the Dairy Industry Act, 1965 and for other related matters. Some of the functions of the Board are (a) to advise the Minister of the issues concerning dairy development policies and strategies for promotion and development of the Dairy Industry; airy and meat sectors are(b) to perform regulatory activities in the dairy industry in accordance with the provisions of this Act; (i) to collect, analyze, maintain and disseminate data and information relating to dairy industry; k) to promote and coordinate the development of small, medium and large scale dairy keepers and processors; (r) to liaise with the Tanzania Food, Drugs and Cosmetics Authority (TFDA) on licensing; (s) to collaborate with the Tanzania Food, Drugs and Cosmetics Authority (TFDA) in inspection of dairy facilities such as dairy farms, plants, kiosks, parlors and other similar facilities; Section 8 of the Dairy Industry (Registration of Dairy Industry Stakeholders) Regulations, 200766, provides for the Certificate of registration. Section 8(1) states “where the Board grants the application for registration in respect of the dairy under these regulations, it shall instruct the Registrar: - (a) to register the dairy in question; and (b) to issue a certificate of registration in respect. The Table below tracks Steps, Time, Authorities, and the Costs for Obtaining a Milk and Milk Products Registration Certificate with the Dairy Industry Board.
65 https://trade.business.go.tz/media/DAIRY%20INDUSTRY%20ACT%202004[1]-converted.pdf accessed on 7/14/2019 66 https://trade.business.go.tz/procedure/497/step/1848?l=en&embed=true&includeSearch=true accessed on 7/14/2019
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Table 23: Steps, Time, Authorities and the Costs for Obtaining a Milk and Milk Products Registration Certificate
Step No of step Time (minutes) Cost TZS Authority
1Submit application 1 25 TDB
2Pay fees 1 25 0 CRDB
3Obtain TDB receipt 1 25 TDB
4Obtain registration certificate 1 25 TDB
Source: Business.go.Tz
The result of the process is a Certificate of registration of dairy stakeholders. To apply, the following documents are required; i) Application form for registration of dairy stakeholders (original)
ii) Business license (Simple copy); iii) Tax Identification Number certificate (Simple copy); IV) Certificate of incorporation (Simple copy). For companies incorporated in Tanzania, i) Business registration certificate (Simple copy). For a registered business name; i) Certificate of compliance (Simple copy)
The Budget 2017/18 speech of the Minister of Agriculture and livestock67 removed registration charges from milk stakeholders:
Type of Stakeholders
Milk Processors Milk Collectors Milk Distributors
Size of processors and fees that were removed
• Large: > 500 liters a day –TZS 100,000
• Medium : 101-500 liters a day-TZS-50,000
• Small: 10-100 liters a day –TZS 5,000
• Large: > 5,000litres a day –TZS 250,000
• Medium: 1,000-5,000 liters a day-TZS-150,000
• Small: less than 1,000 liters a day –TZS 50,000
• All: TZS 500,000
6.2.7. Reform in the Agriculture Sector As mentioned in the above section, the 2017/18 budget speech of the Minister of Agriculture removed a
total of 108 fees that various institutions were charging in the agriculture and livestock sector. Ten
fees/levies were scrapped in tobacco, while two taxes/levies were revised. Seventeen taxes/fees were
removed in the coffee sub-sector, while 16 were eliminated in the sugar sub-sector. Two levies were
removed in the tea sub-sector, one in tea sector and two in the cashew- sub-sector.
Levies/fees were removed from the various institution. Four taxes were excluded from the fertilizer
regulation authority (Dealers ‘registration fees, dealer licensing fee, registrant fee for sterilizing plant or
manufacturer, and the fertilizer registration fee). Fees for quality assurance that are charged by the
Agriculture research institute were reduced from USD 30,000 to USD 10,000. Seven levies charged by the
Agriculture Seed Agency were scraped, while the documentation fee charged by the National Inputs Fund
was also removed. The export milk permit charges levied by the Dairy Industry Board was excluded and
removed also were four levies charged by the Meat Board. Sixteen charges levied on livestock were
dismissed. The removed fees are attached as Annex 6.
67 http://ufugaji.co.tz/wp-content/uploads/2015/08/Hotuba-ya-Bajeti-2017-2018.pdf accessed 7/14/2019
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PART 3: HOW TO
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7. Facilitating MSMEs to Formalization and Compliance 7.1. The Situation of Formalization and Compliance Using the measure of registration by BRELA, most of the micro and small enterprises are informal. The figure depicts the informal business environment existing in Tanzania68. Figure 2: Registration under BRELA by Size%
Figure 3: Registration by BRELA by Area%
Source: FSTD Focus Note Building a stronger small business sector through formalization in Tanzania 2018 The chart above shows that 3.6% of the micro enterprises are formalized, while 15.6% of the Small enterprise is formalized. The figures based on the area show that 96.8% of the firms in other urban and 95.8% of firms in rural are informal. Equally, the ENGINE program has set targets of formalizing 15% of the unregistered MSMEs above the baseline by project end. A study69 on effective delivery of business development services found constraints to service delivery in rural areas both on the demand side and supply side that are also relevant for enterprises.
The demand side, constraints include: The supply side, limitations include:
• The unfamiliarity of markets and the benefits that services provide.
• Reluctance or inability of small entrepreneurs, especially the weaker enterprises located in a rural community, to pay for services, even if those services are needed for them to make more money.
• Lack of non-financial capacities to take advantage of business services, including general awareness that such services exist.
• Prevalence of subsidized or free services provided by the public sector or donor-supported development projects has eliminated incentives for smallholders or producer groups to pay for services.
• BDSPs incur high costs in providing services to clients that are geographically dispersed, especially the most deprived communities where road and transport networks are the least developed.
• Real and perceived risks of working with smallholder farmers (e.g., limited income, minimal collateral, unpredictable and highly seasonal cash flows).
• Lack of qualified BDSPs to deliver expert services at an affordable cost in remote areas.
• Prevalence of subsidized/ free services provided by the public sector or donor-supported development projects that crowd out the development of sustainable service markets.
68 http://www.fsdt.or.tz/wp-content/uploads/2018/11/FSDT-Focus-Note-Business-Formalization-in-Tanzania.pdf accessed on 7/6/2019 69 https://www.crs.org/sites/default/files/tools-research/guide-to-strengthening-business-development.pdf accessed on 7/6/2019
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7.2. The How of Delivering Business Formalization and Compliance Services. The approach below is proposed to facilitate effective delivery of business formalization and compliance to MSMEs:
1) Targeting through a market assessment. 2) The institutional arrangement is focused on achieving viability/sustainability 3) Human capital with competencies to provide high-quality BDS facilitation and delivery. 4) Monitoring and evaluation
The following sections briefly explain the approaches.
7.2.1. Targeting through Market Assessment
As it is the pre-requisite of SMEs to conduct market research to understand the demand for their services,
BDSPs have also to conduct a market assessment. The market assessment will enable the service providers
and ENGINE to understand the requirements of compliance and formalization services to widen the
outreach, avoid market distortion, and maximizing the scope for viability and sustainability.
Market assessment questions70 are illustrated in the table below. Table 24: Contents of the market assessment for formalization and Compliance services to MSMEs
Area Issue Questions
1. Demand
1. Profile: 1. What types of MSMEs are using which services? Which types of services are not being used?
2. Benefits 2. What kind of benefits are MSMEs looking for from BDS services? 3. Awareness: 3. How aware are MSMEs about services?
4. Do they understand the benefits of services
2. Transactions 4. Market 5. How big is the market? 6. What percentage of MSMEs have tried particular services?
5. Purpose 7. Why do/don’t MSMEs use the services? ·
6. Delivery: 8. How are services delivered? 9. How do MSMEs want them to be delivered?
7. Features 10. What service features do MSMEs want? 11. How satisfied are they with what is available? ·
8. Prices 12. What prices are MSMEs paying for services?
9. Nature 13. What percentage of MSMEs acquire services through fee-for-service transactions, services embedded in other commercial transactions, and for free?
3. Supply
10. Suppliers 14. What kind of suppliers exists?
11. Products 15. What range of products is available?
12. Strengths & weaknesses
16. What are the strengths and weaknesses of the current suppliers? ·
13. Substitutes: 17. What kind of alternatives for BDS to MSMEs use?
Key respondents of the market assessment are potential and existing MSMEs. Other sources could include BDS suppliers (public and private), business associations (Chambers of Commerce as well as other voluntary bodies), governmental sources (national, regional and local), NGOs, etc. Market research tools, including literature/document reviews, consumer surveys, Focus Group Discussions, and Suppliers Interviews, could be used to collect the needed data.
70 ILO (2003) BDS Reader: Developing Commercial Markets for Business Development Services, BDS Primer by Miehlbrandt, A. & McVay, M. for ILO SEED.
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7.2.2. Institutional Arrangements
To develop an adequate and effective institutional arrangement for delivering formalization and compliance service provision, BDSPs and ENGINE should consider the following three questions.
1. Which approach should be used to deliver Formalization and Compliance services? 2. What is the best institutional model could be used for effective Formalization and Compliance
services delivery? 3. Should the BDSPs charge for formalization and compliance services or not?
The following sections offer propositions on the raised questions: Which BDS approach should be used for formalization and compliance services delivery? There are two typologies of business development services. The first one is the traditional development approach, while the second is the market development approach. The table below compares the methods. Table 25: The Differences between the Traditional and Market Development approach to BDS
Traditional Development Approach Market Development Approach
Vision A non-profit or government organization provides BDS to MSMEs
A primarily private sector market made up of competing suppliers sell a range of services to MSMEs
Objective Provide services that MSMEs can afford Encourage others to provide services to MSMEs on a commercial basis
Starting point Diagnosis of needs, surveys Assessment of market (demand, supply, potential)
Point of intervention
“First tier”: direct provision through a single, local institution “
The second tier”: facilitate, regulate, develop products for and work with more than one supplier
Duration of involvement
Permanent: donor-funded programs must continue if services are to be available to MSMEs
Temporary: donor support is withdrawn as markets develop
Subsidies Support free or low-cost services to MSMEs. Justified in the long run as MSMEs cannot be expected to pay full costs
Support assistance to suppliers or temporary grants to clients. Justified in the short term if market development impact outweighs distortion
Source: Bluebook 2001
The ENGINE program suggests a sustainable approach and therefore aligning itself to the market
development approach. However, looking at the products in question that are informational, a mixed
method is proposed. In this case, government institutions (BRELA, TBS, SIDO, TRA, and the SME
department of the Ministry of Industries and Trade (MITI)) will still be required as Compliance and
formalization facilitators. Subsidies to private BDSPs may also be needed as it will take time for the cost
of formalizing/complying will outweigh the benefits of informality, especially for small and micro
enterprises.
What is the best institutional model for effective Compliance and formalization Service delivery?
The formalization and compliance service delivery models the ENGINE and BDSPs could choose from
including the following:
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• The Business Support Centre model provides limited services such as starting businesses,
registration, business planning, access to finance, training, consultancy, etc.).
• The Business Incubator model provides support (such as advice, facilities, low-cost premises,
finance, etc.) to businesses when they are most vulnerable, namely between startup and
achieving stable profitability.
• The Local Economic Development (LED) model’s objective is to design and implement a
development strategy which leads to the creation of jobs and stimulates economic activity by
using local resources and local competitive advantages.
Given the above context, BDSPs could use the business support centers model, i.e., offering information
services and facilitating MSMEs to formalize and comply. Equally, the ENGINE program could use the LED
model as it is designed to provide support through a participatory development process that encourages
partnership arrangements between the key private and public stakeholders in a defined geographical
space.
Should the BDSPs charge for formalization and compliance services or not?
BDSPS should focus on achieving viability in the first instance and eventually, sustainability. To achieve this, charges are to be collected from entrepreneurs. Charges represent necessary price signals which oblige entrepreneurs to consider the value of the services on offer. It is evident that entrepreneurs, for example, micro-entrepreneurs may be unable to pay, and the demand for compliance and formalization may have a low order compared to a provision of marketing support services. In this case, BDSPs could do cross subsidization whereby revenues earned from highly demanded product and entrepreneurs whose capacity to pay is high (medium enterprises) are used to subsidize low required product s and vulnerable enterprises such as micro-enterprises.
7.2.3. High-quality human capital for compliance and formalization facilitation and delivery.
ENGINE recruited BDSP who have the experience to deliver BDS. ENGINE has continually assessed the capacity delivery gaps of the BDSPs and providing the needed mentoring/training to cover those gaps. Also, BDSPs have their capacity development plans. Despite the above efforts, capacity building is a continuous process, and for productive developing of the high-quality human capital for compliance and facilitation, BDSPs and ENGINE could develop a customized capacity building packages, and support will be planned and delivered. Such a plan will reflect the priorities of the project in question, however, is likely to include the following broad components:
• Working through partnerships.
• National/ local / enterprise development.
• Developing and implementing strategies and work plans.
• Achieving SDGs through BDS.
• Monitoring and evaluation.
• Delivering BDS to internationally accredited standards.
7.2.4. Monitoring and Evaluation
The monitoring and evaluation of formalization and compliance will use the program indicators developed for the BSDP component.
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Annex 1: Terms of Reference for a Call of a Consultant
Short term Consultant: Business Formalization and Compliance Consultant
Location of Assignment: Dar es Salaam, Tanzania
Proposed Level of Effort: 3 weeks
Anticipated Start Date: JULY/AUGUST 2019
Background
The Tanzania Enabling Growth through Investment and Enterprise Program (ENGINE) is a four-year, USAID-funded Feed the Future activity that aims to streamline and enhance many of the regulatory, informational and financial channels that encourage domestic and foreign investment in the southern mainland agricultural regions of Mbeya, Morogoro, and Iringa, and in Zanzibar.
ENGINE works at the district level, using a broad-based approach to engage with district Local Government Authorities (LGAs), private sector associations, business development service providers (BDSPs), financial institutions and small and medium enterprises. The program’s activities are divided into three main components:
1. Implement policies for growth. Build the capacity of the private sector to effectively dialogue with the government to set the policy agenda and improve the capacity of the public sector to implement policies.
2. Equip businesses for growth. Strengthen SME capacity and foster the growth and capacity of a sustainable market for business development services (BDS) in Tanzania.
3. Access to finance for growth. Broaden access to finance for small and medium-sized enterprises (SMEs), especially women and youth entrepreneurs and those working within agricultural value chains, to facilitate increased investment and growth.
Problem Statement
The ENGINE Program BDS component is currently working with 114 BDSPs in the mainland regions of Mbeya, Iringa, Morogoro, and Zanzibar. One of the frequently required services by many MSMEs is support from BDSPs in business formalization and compliance procedures. Unfortunately, a majority of the BDSPs are not conversant with the processes needed regarding business formalization and compliance. It is against this background that the ENGINE Program is seeking the services of an experienced consultant to assist BDSPs to compile a full package of business formalization procedures, applicable in Tanzania. The increased knowledge of BDSPs on legal and regulatory requirements for business formalization will reduce the time and cost associated with formalization services and therefore attract numerous SMEs to purchase the service.
Objectives of the Assignment
The main objective of this assignment is to build the capacity of BDSPs in Morogoro, Iringa, and Mbeya to understand the requirements of business formalization and compliance procedures applicable in Tanzania to improve their services to MSMEs. The consultant will compile and present to BDSPs a systematic review of the required steps involved in business formalization and compliance, with a timeline and associated costs for different sectors, and each of the steps.
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Task
The Consultant will complete the following tasks:
A. Attend an orientation meeting with ENGINE Program Component 2 staff in Dar es Salaam at ENGINE offices.
B. Through desk research and interviews with key government institutions responsible for business formalization and regulation, compile a full package of requirements for MSMEs in formalization and compliance procedures, noting all the required steps, including costs and approximate time to complete.
C. Accompanied by relevant ENGINE staff, present the full package of business formalization requirements to ENGINE staff in each of the three regions of Morogoro, Iringa, and Mbeya.
D. Write a Final Report summarizing findings, conclusions, and recommendations related to the assignment, as well as challenges and recommended solutions;
E. Provide an exit debriefing to ENGINE program staff and soft copy in MS WORD.
Deliverables
The Consultant will submit the following deliverables:
1. A full package of business formalization and compliance requirements and associated costs and timelines for each step for SMEs applicable in Tanzania.
2. List contacts of institutions involved in business formalization and compliance issues, including emails and telephone contacts.
3. A draft outline of the report for review and approval by ENGINE Senior staff after one week of signing the contract
4. Hold a half-day workshop in each of the three mainland Regions of Morogoro, Iringa, and Mbeya to present the final report to selected BDSP’s to be selected and invited by ENGINE Senior Staff.
The Consultant will submit a Final Assignment Report to the ENGINE Program that includes the following sections:
A. Introduction. B. Methodology. C. Findings, Conclusions, and Recommendations: related to the BDS Provider meeting with selected
BDSP’s and ENGINE staff. D. Discussion of the assignment objectives and how they were met or why they were not met.
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Annex 2: Requirements and results for formalizing a Medium Enterprise Step Requirements Results 1. Obtain certified and
notarized documents 1. Declaration of compliance form (form14b) 2. Memorandum and Articles of Association or
charter or statutes (2 original ) 3. Lease agreement (3 simple copies) it should bear
the company name. To be used during the payment of stamp duty (step number 6).
4. Physical presence Of all the shareholders of the company to be formed or their authorized representatives
Also, for an authorized representative 5. Power of attorney (an authentic copy) 6. Proof of ID (Simple copy
1. Notarized declaration of compliance (form14b)
2. Certified Memorandum and Articles of Association
3. Certified lease agreement
4. Endorsed title deed (for contracts older than 5 years)
2. Create an online account
7. National Identification Authority (NIDA) ID number
8. For foreign promoters of the company-Passport
3. Apply for a certificate of incorporation
9. Signed BRELA Consolidated form (original) 10. Signed ethics and integrity pledge form 11. Signed ethics and integrity pledge form (original) 12. Notarized declaration of compliance (form14b)
(original) 13. Notarized memorandum and articles of
association (2 original + 2 authentic copies)
5. BRELA invoice 6. Control number
(BRELA)
4. Pay Incorporation Fees
14. Control number (BRELA) (original)-This is generated online during the application
7. CRDB Bank slip (new) 8. Stamped control
number
5. Obtain a certificate of incorporation
15. User credentials 9. Certificate of incorporation
10. BRELA payment receipt
6. Submit a Lease agreement for the assessment
16. Lease agreement (original) 17. Taxpayer Identification Number (TIN) 18. Certificate (Simple copy) Of the landlord/lady
11. Withholding tax assessment form
12. Stamped lease agreement
13. Control number (TRA) 14. Payable stamp duty
7. Pay withholding tax and stamp duty
19. Control number (TRA) (original) 15. Stamped control number
8. Submit a request for TIN
20. TIN application form (original) 21. An estimate of tax payable by installments form 22. (original + Simple copy) 23. Notarized lease agreement (Simple copy) 24. or Endorsed title deed (for contracts older than
five years) (Simple copy) 25. Certificate of incorporation (Simple copy) 26. or Certificate of compliance (BRELA) (Simple
copy) 27. Notarized memorandum and articles of
association (Simple copy) 28. TRA EFD receipt (original) From advocate for
notarization fee
16. Appointment
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29. Power of attorney (original) From owners to a resident person or a citizen Also, for each director
30. Personal TIN Certificate (Simple copy) 31. Identification (Simple copy) 32. NIDA ID or driving license or voter's card 33. or Passport (original) For foreigners
9. Biometric and photo capture
34. TIN application form (original) Duly filled 35. 2. Physical presence Of the director/ shareholder
17. Assigned TIN
10. Obtain TIN and tax assessment form
36. The physical presence of the applicant 18. Tax Identification Number (TIN) Certificate
19. An estimate of tax payable
20. Valid Tax clearance certificate
11. Submit and stamp application letter for tax clearance certificate
37. Application letter (tax clearance) (original + Simple copy)
21. Stamped application letter
12. Obtain tax clearance certificate
38. Stamped application letter (Simple copy) 22. Tax clearance certificate
13. Assessment and verification of documents
39. Business license application form (original) 40. A form needs to be filled for each type of license
applied for 41. Memorandum and articles of association (Simple
copy) 42. Certificate of incorporation (Simple copy) 43. For companies registered in Tanzania 44. Certificate of compliance (BRELA) (Simple copy) 45. Power of attorney (an authentic copy) 46. Lease agreement (Simple copy) 47. Title deed (Simple copy) 48. Valid Tax clearance certificate (Simple copy)
23. Control number (BRELA)
14. Pay Business license 49. Control number (BRELA) (Simple copy) 24. CRDB (Pay Slip)
15. Obtain BRELA Receipt 50. CRDB bank slip (original) 25. BRELA payment receipt
16. Submit application 51. Business license application form (original) 52. filled by one of the promoters of the company 53. BRELA receipt (Simple copy) 54. Memorandum and articles of association (Simple
copy) 55. Certificate of incorporation (Simple copy) 56. For companies incorporated in Tanzania 57. Certificate of compliance (BRELA) (Simple copy) 58. Valid Tax clearance certificate (Simple copy)
26. Appointment
17. Obtain a business license
59. BRELA receipt (original) 27. Business license
18. Apply for VAT registration
60. VAT application and registration form (original) 61. Identification (Simple copy) Voter's ID or
passport 62. Certificate of incorporation (Simple copy) 63. Business license (BRELA) (Simple copy)
28. Appointment
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64. Certificate of compliance (BRELA) (Simple copy) 65. Memorandum and articles of association (Simple
copy) 66. Passport size Photos (2 original ) 67. Lease agreement (Simple copy) 68. Must show the business location and paid fee 69. Taxpayer Identification Number (TIN) Certificate
(Simple copy) 70. Bank account number 71. Revenue projections (Simple copy) 72. For those wishing to register with VAT
immediately after registering a business
19. Obtain VAT Certificate
73. Physical presence Of applicant 74. Proof of ID (Simple copy) In case of
representative
29. VAT certificate
20. Submit registration request for social security
75. Application for employer's registration -form R1 (3 original ) Three R1 forms need to be filled but only one is attached with the requirements
76. Tax Identification Number (TIN) Certificate (Simple copy) Of the company
77. Certificate of incorporation (Simple copy) 78. For local companies or Certificate of compliance
(BRELA) (Simple copy) 79. For foreign companies or Certificate of
registration (BRELA) (Simple copy) For business names
80. Business license (BRELA) (Simple copy)
30. Appointment
21. Obtain social security number
81. Proof of ID (Simple copy) Of a person obtaining the social security number
31. Notification of contributing employer on a registration number (form R2)
32. Processed application for employer's registration (for
22. Submit the document for OSHA assessment
82. Application form for registration of a workplace form 1(b) (original) -This applies for workplaces other than building operations or engineering construction sites or Application form for registration of workplace form 1 (a)-Application form for registration of workplace form 1 (a) (original) -This applies to building operations or works of engineering construction nature
83. Certificate of incorporation (an authentic copy) or Certificate of compliance (BRELA) (Simple copy) or Certificate of registration (BRELA) (Simple copy)
84. Certified TIN certificate (an authentic copy) 85. Business license (BRELA) (an authentic copy)
33. Control number (OSHA)
23. Pay general inspection and publication fees
86. Control number (OSHA) 34. Bank slip (NMB Bank)
53
24. Obtain OSHA Receipt 87. NMB Bank slip (original) 35. OSHA Government Bill (Control Number)
25. Obtain OSHA registration certificate
88. OSHA Government Bill (Control Number) (original + Simple copy)
36. OSHA Certificate of Registration
37. Notification letter
26. Apply for inspection to OSHA
89. Factory or workplace drawings (Simple copy).Drawings for office space partitioning or factory final set-up. Not drawings for the construction of the building
38. Appointment
27. Workplace inspection by OSHA
90. Physical presence 39. Appointment
28. Obtain a general inspection report
91. Proof of ID For a representative 92. Physical presence Of applicant
40. Certificate of inspections from OSHA
29. Register and obtain a copy of WCF Certificate online
93. List of employees (original) -Just fill as shown in the sample
94. Taxpayer Identification Number (TIN) Certificate (Simple copy) should be in PDF or JPG format
95. Certificate of incorporation (Simple copy) Certificate of compliance (BRELA) (Simple copy)
96. or Certificate of registration (BRELA) (Simple copy)
97. Business license (BRELA) (Simple copy) 98. Names of shareholders (Simple copy) 99. Certificate of Compliance (OSHA) (Simple copy) 100. Value Added Tax Certificate (VAT) (Simple copy) 101. Letter of appointment (Simple copy). In the case
of Agent. Authorized by the employer to apply on behalf
41. Provision certificate of registration (WCF)
30. Obtain Original WCF registration certificate
102. Provision certificate of registration WCF) (Simple copy)
42. WCF registration certificate
54
Annex 3: Contact Information for formalization compliance Institutions
1. Obtaining a certificate of Registration, Business license, BRELA GENERAL LINES
1 GENERAL CONTACT NO. 1 +255 (0) 22 2181344
2 GENERAL CONTACT NO. 3 +255 (0) 22 2180113
ONLINE REGISTRATION SYSTEM (ORS) SUPPORT
TYPE OF SERVICES PHONE NUMBER
FOR ALL ENQUIRIES REGARDING COMPANIES AND BUSINESS NAMES +255 (0) 735 331 001
+255 (0) 735 331 000
+255 (0) 755 235 188
AG. DIRECTOR OF COMMERCIAL LAWS (DRCL) +255 (0) 735 332 003
FOR ALL ENQUIRIES REGARDING ONLINE INTELLECTUAL PROPERTY (IP) +255 (0) 735 322 001
+255 (0) 735 322 000
DIRECTOR OF INTELLECTUAL PROPERTY (IP) +255 (0) 784 333 044
FOR ALL ENQUIRIES REGARDING ONLINE INDUSTRIAL LICENCES +255 (0) 784 411 777
+255 (0) 754 285 137
DIRECTOR OF LICENCES +255 (0) 713 335 618
FOR ORS IT TECHNICAL SUPPORT +255 (0) 735 331 004
ZONAL OFFICES
SN ZONE ADDRESS CONTACT PERSON MOBILE
2. SOUTHERN HIGHLANDS ZONE
REGIONAL COMMISSIONER OFFICE, ROOM NO. 25, MBEYA CITY, MBEYA
1. MOHAMED SONGORO +255 (0) 677 000 001
55
SN NAME TITLE EMAIL TEL MOBILE
1 MR. ANDREW MKAPA DIRECTOR OF LICENCES [email protected] +255 (0) 22 2181421 +255 (0) 713 335 618
2 MR. BAKARI MKETO DIRECTOR OF BUSINESS SUPPORT
+255 (0) 717 959 673
3 MS.LOY MHANDO DIRECTOR OF INTELLECTUAL PROPERTY (IP)
[email protected] +255 (0) 22 2180139 +255 (0) 784 333 044
4 MS. REHEMA KITAMBI AG. DIRECTOR OF COMMERCIAL LAWS (DRCL)
+255 (0) 735 331 003
5 MR. BOSCO GADI CHIEF ACCOUNTANT [email protected]
+255 (0) 713 233 180
6 MR. GEOFREY MWAKIJUNGU
HEAD ICT [email protected]
+255 (0) 766 063 375
7 MS.GLORIA BINAMUNGU
HEAD OF SECTION - INDUSTRIAL LICENCES
+255 (0) 754 285 137
8 MR. TAWI KILUMILE HEAD OF SECTION - BUSINESS LICENCES
+255 (0) 735 332 000
56
Other institutions
Activity Responsible entity contact Unit in charge Person in charge
Obtaining OSHA Registration OCCUPATIONAL SAFETY AND HEALTH AUTHORITY P.O.BOX 519 Plot no: MNY/KMB/565, Kinondoni Mahakama road, Dar es Salaam Tel: +255 222 760 548 / +255 222 760 579 Fax: +255 222 760 552 Email: [email protected] Website: www.osha.go.tz
OSHA ACCOUNTS DEPARTMENT Mon: 08:00 - 16:00
Tue: 08:00 - 16:00 Wed: 08:00 - 16:00 Thu: 08:00 - 16:00 Fri: 08:00 - 16:00
JOSEPH MBUNDA Accounts Assistant Tel: +255 222 760 548 Email: [email protected]
Register for social security scheme
NATIONAL SOCIAL SECURITY FUND (NSSF) Mafao House, Uhuru Street, Ilala, Dar es Salaam P.O. Box 9504 Tel: +255 222 862 596 / +255 222 866 647- 8 Fax: +255 222 129 397 Website: www.nssf.or.tz
REGISTRATION OFFICE (GROUND FLOOR) Mon: 08:00 - 13:00
Tue: 08:00 - 13:00 Wed: 08:00 - 13:00 Thu: 08:00 - 13:00 Fri: 08:00 - 13:00
RABIA LUGENDO Registration assistant officer Tel: +255 713 425 840
Obtain notarized declaration of compliance form
CONTACT PUBLIC NOTARY IN YOUR REGION
Obtain company tax identification number (TIN
ONLINE- https://ors.brela.go.tz/um/register
Obtain Workers Compensation Fund (WCF) certificate of registration
ONLINE https://portal.wcf.go.tz/
57
Annex 4: Contact information for compliance institutions
1. Paying Taxes TRA Contacts - TRA Regional Offices
Name Position Phone
Coast Region Regional Manager +255 23 240 2905
Dar es salaam HQ Taxpayer Service Centre +255 22 2127085
Kinondoni Regional Manager +255 22 2771846
Ilala Regional Manager +255 22 2185545
Temeke Regional Manager +255 22 2861122
Arusha Regional Manager +255 27 2502946
Mwanza Regional Manager +255 28 2500906
Tanga Regional Manager +255 27 2642200
Kilimanjaro Regional Manager +255 27 2753268
Tabora Regional Manager +255 26 2604609
Rukwa Regional Manager +255 25 2801089
Ruvuma Regional Manager +255 25 2602140
Shinyanga Regional Manager +255 28 2762385
Singida Regional Manager +255 26 2502320
Mtwara Regional Manager +255 23 2333662
Mbeya Regional Manager +255 25 2502165
Mara Regional Manager +255 28 2622551
Manyara Regional Manager +255 27 2531006
Lindi Regional Manager +255 23 2202662
Kigoma Regional Manager +255 28 2802054
Kagera Regional Manager +255 28 2220390
Iringa Regional Manager +255 26 270144
Morogoro Region Office +255 23 261 4192
Dodoma Region Office +255 26 232 2912
Annex 5: Public Notice Change of Procedures for Product Certification and Imports Inspection
58
1. Tanzania Bureau of Standards (TBS) wishes to inform the general public that the National
Assembly of the United Republic of Tanzania has passed the Finance Bill of 2019 which, pending
assent by the President of the United Republic of Tanzania, will cause the amendment of Section
130 of the Standards Act No. 2 of 2009, to reflect the additional functions of assuring the quality
and safety of food and cosmetics products, which are currently performed by the Tanzania Food
and Drugs Authority (TFDA). The implementation of the new functions will commence on 1st
July 2019, and they include registration of production premises for food and cosmetics products
and registration and certification of locally produced and imported food and cosmetics
products.
2. Following the amendment of the Law, TBS would like to clarify that from 1st July 2019;
a. Premise registration certificates issued by TFDA to local manufacturers will be
recognized by TBS till their Expiry Date, which is five years. After that, a new registration
will be issued by TBS procedure.
b. TBS will assume the responsibility for registering premises for new applicants using a
harmonized system which observes safety and quality requirements for food and
cosmetics products. Moreover, new registrations will be done for expiring premise
registration certificates.
c. Unlike in the current practice, food and cosmetics samples will be taken and tested once
for both quality and safety requirements by relevant standards for the initial inspection.
This is aimed at reducing testing costs and turnaround time; thus, manufacturers are
advised to make necessary preparations before embarking on food and cosmetics
products certification processes.
d. In case initial inspection samples do not conform to the quality and safety requirements
for food and cosmetics, the manufacturer will be advised to take corrective action on
observed discrepancies. After taking corrective action measures, re-inspection and
retesting of samples may be conducted before the issue of a license to use the
Standards Mark of Quality.
e. Basing on positive factory inspection and laboratory test results, TBS shall issue a license
to use the Standards Mark of Quality for products certified against national standards or
a certificate for products certified against other standards.
f. A license or certificate issued by TBS through the procedure specified in e) above shall
be an attestation of premise registration and product registration and confirmation of
safety and quality of food and cosmetic products. This is aimed at reducing annual
licensing/certification costs and the piles of licenses and certificates at the
manufacturer’s premise.
g. Concerning imported food and cosmetics products, TBS will recognize the registration of
food and cosmetics products issued by TFDA and the certification of those products shall
be done through a harmonized system which observes safety and quality requirements
for food and cosmetics products.
59
h. TBS will assume the responsibility for registering imported food and cosmetics products
using a harmonized system which observes safety and quality requirements for food and
cosmetics products. Moreover, new registrations will be done for expiring registrations
for imported food and cosmetics products.
i. TBS will proceed with safety and quality assurance of imported products through the
existing certification schemes, i.e., Pre-Shipment Verification of Conformity to Standards
(PVoC) Programme or Destination Inspection (DI).
j. To acquire the Certificate of Conformity under PVoC, the importer of food and
cosmetics product shall be required to attach the registration certificate issued by TFDA
(for registered products) or TBS registration certificate for products registered after the
amendment of the Act.
k. For unregistered products, the importer shall be required to submit samples at TBS for
assessment and registration before embarking on the importation process. Samples
shall be accompanied by a formal request. For unregistered products entering the
country, registration shall be done through a harmonized system for registration of
imported food and cosmetics products which observes safety and quality requirements
for the products.
l. Other quality and safety assurance measures by international standards, namely ISO/IEC
17067, 17065, and 17020 shall be maintained through existing procedures which are
revised from time to time to enhance their effectiveness. The measures will include
market and factory surveillance to ensure conformity to systems requirements and to
ensure that manufacturers and distributors of products abide by the safety and quality
requirements for food, cosmetics, and other products.
3. It is our sincere hope that stakeholders and the public, in general, will observe this guidance. For
more clarifications, do not hesitate to contact us through the following contacts:
Director General
Tanzania Bureau of Standards (TBS)
P O Box 9524 Dar es Salaam
Tel: +255(022)2450298 Hotline: +080110827
Email: [email protected]
60
List of Approved Weights and Measures Agency Patterns
S/N NAME OF INSTRUMENT COMPANY/IMPORTER/MANUFACTURER
1 AVERY WEIGH TRONX 150 kg capacity ELECTRONIC PLATFORM
AVERY EAST AFRICA LTD P. Box 40604, Dar es Salaam Tel: +255 222865254
2 SALTER SPRING BALANCE 200 kg capacity, Model 23510
SAHEL TRADING Co. Ltd, P. Box 10967, Dar es Salaam Tel: +255 222120886
3 SALTER SPRING BALANCE 100 kg capacity, Model 23510
SAHEL TRADING Co. Ltd, P. Box 10967, Dar es Salaam Tel: +255 222120886
4 TOKHEIM FUEL PUMP Multi Suppliers
5 NANDRA COUNTER SCALE 15 kg capacity, ROBERVAL
NANDRA ENGINEERING WORKS PO Box 304, Kilimanjaro, Tel: +255 272750575
6 WAYNE FUEL PUMP Mult Suppliers
7 GILBARCO FUEL PUMP Multi Suppliers
8 DAVIDS 15 kg capacity, ROBERVAL KIRAMA PEMBE MWARANGI P.O. Box 869, Dar es Salaam Tel: +255 767081721
9 AVERY HARDOLL FUEL PUMP Multi Suppliers
10 CAL-ON CL 200C50 ELECTRONIC SPRING BALANCE
TANZANIA COTTON ASSOCIATION Pamba Road/Garden Avenue P.O.Box 9161, Dar es Salaam, Tanzania. Tel: +255 (0) 22 2122564
11 NAGATA HTR 150 kg*20 g capacity ELECTRONIC SPRING BALANCE
S.M. HOLDINGS LTD P.O. Box 19639, Dar es Salaam Tel: +255 222171460
12 HANG SCALE(COUNTER SCALE) 15 kg capacity
HASSAN NGALAMBELA P.O. Box 1618, Moshi Tel: +255 753510209
13 SALTER BRECKNEL(HANGING SCALE) 300 kg capacity
AVERY EAST AFRICA P. Box 40604, Dar es Salaam Tel: +255 222865254
14 BWS NAGATA 5 kg capacity DAR ES SALAAM AVERI SCALES(1990) Ltd P.O. Box 19639, Dar es Salaam Tel: +255 222171460
15 CAL-ON CL 200C50 100 kg capacity ELECTRONIC SPRING BALANCE
TANZANIA COTTON ASSOCIATION Pamba Road/Garden Avenue P.O.Box 9161, Dar es Salaam, Tanzania. Tel: +255 (0) 22 2122564
16 ZING COUNTER SCALE 15 kg capacity ROBERVAL COUNTER SCALE
ZING Co. Ltd P. O. Box 6238-00100, Nairobi, Kenya Tel: +254 722589391
17 STAR COUNTER SCALE 15 kg capacity ROBERVAL COUNTER SCALE
STAR METRIC SCALES CO.LTD P. O. Box 72312, Dar-es-Salaam, Tanzania
61
18 SUPER CLOSE BODY 10 kg capacity ROBERVAL COUNTER SCALE
SUPER CLOSE BODY P. O. Box 7517, Dar-es-Salaam, Tanzania
19 AVERY COUNTER SCALE, ZING 20 kg capacity, ROBERVAL COUNTER SCALE
ZING Co. Ltd P. O. Box 6238-00100, Nairobi, Kenya Tel: +254 722589391
20. PARAMOUNT 15 kg capacity ROBERVAL COUNTER SCALE
Samson Kessy, P. O. Box 1713, Moshi Tel: +255 767743802
21 MBP 15 kg ROBERVAL COUNTER SCALE HAMIS O. NGALAMBELA P. O. Box 10723, Mwanza Tel: +255 754238877
22 SALTER BRECKNEL(HANGING SCALE) 30 kg capacity, Model 2508
General Motors Investment Limited, 14 Nyerere Road - Vingunguti Area P. O. Box 16541 Dar-es-Salaam, Tanzania Tel. +255-22-2862661,+255-22-2862664 Fax: +255-22-2862667
23 WINTECH, 200 kg capacity ELECTRONIC HANGING SCALE
WINTECH ELECTRONIC P.O. Box 38419, Dar es Salaam Tel: +255 767914919/26
24 BWS NAGATA, 150 kg capacity ELECTRONIC SPRING BALANCE
BWS NAGATA P.O. Box 19639, Dar es Salaam Tel: +255 222171460
25 MARBGRANT 50 kg capacity Electronic Platform Scale
MARBGRANT P.O. Box 63228, Dar es Salaam Tel: +255 22 2700525 Fax: +255-22-2775354
26 (a) 150 kg Ohaus electronic scale, SAHEL TRADING Co. Ltd, P. Box 10967, Dar es Salaam Tel: +255 222120886
27 (b) 30 kg Ohaus electronic scale,
28 (c) 100 kg Salter spring balance, 29 (d) 40 kg Ohaus electronic scale,
30 (e) 200 kg crane weigher electronic instrument,
31 (f) 200 kg capacity Salter Electronic scale,
32 (g) 30 kg capacity Endel Electronic scale
33 (a) 100 kg capacity Wintech Electronic scale,
WINTECH ELECTRONIC P.O. Box 38419, Dar es Salaam Tel: +255 767914919/26
34 (b) 60 kg capacity Wintech Electronic scale,
35 (c) 30 kg capacity Wintech Electronic scale,
36 (d) 15 kg capacity Wintech Electronic scale,
37 (e) 60 kg capacity Wintech Electronic scale
38 40 kg capacity TCS Electronic scale Haussein Chogogwe Tel: +255 653 751 011
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39 Uritwo 15 kg capacity Roberval Counter scale
Uritwo Weighing Scale, P.O. Box 11457, Arusha
40 Weighland 15 kg capacity Roberval Counter scale
Khalfani Islam, Private bag, Mbagala Street, Dar es Salaam
41 Hasat 15 kg capacity Roberval counter scale
H K HAMIDU, Metrologist Hasat Inspiration, Magore Ilala P.O. Box 313, Dar es Salaam Tel: +255 783 392833
42 MCF 15 kg capacity Roberval counter scale
Mkurugenzi, MCF SIDO INDUSTRIAL AREA P.O. Box 426, MOSHI Tel: +255 754 286 039, +255 719 280 779
43 300 kg Capacity Capture Digital Platform Scale
Managing Director, Capture Solutions Tanzania Ltd, P. O. Box 6408, Dar es Salaam +255 688133433
44 10 kg capacity Horse Roberval c/s Shabbir A. Sarkar, P. O. Box 7517, Dar-es-Salaam, Tanzania.
45 250 kg capacity ASCO Mechanical
platform scale
Techno Trade Investment Ltd, P. O. Box 3633, Dar es Salaam
46 10 kg capacity Lovison Roberval c/s Ideal Freight Forwarders Limited, P. O. Box 75065, Dar es Salaam
47 15 kg capacity ABA Roberval c/s Abdallah Bakari P.O. Box 3, Kabuku Handeni Tanga, Tanzania
48 15 kg capacity IJM Roberval c/s IDDI JUMA MAJALA, Private Bag, Moshi, Tanzania.
49 15 kg capacity Haqu Roberval c/s Khatibu Ahamadi, P.O. Box 168, Moshi, Tanzania. +255 764994658
50 30 kg capacity Cal On electronics scales
Instruments
Cal On Instruments, P. O. Box 75065, Dar es Salaam
51 15 kg capacity Nyabuya Roberval c/s ISSA NDOSSY, P. O. BOX 6413, Mwanza, Tanzania.
52 150 kg capacity Kifaru Electronic scale H. J Janoowalla, Private Bag, Dar Es Salaam
53 200 kg capacity Cal On electronics
scales Instruments
Cal On Instruments, P. O. Box 75065, Dar es Salaam
63
54 (a) 300 kg Endel (Stainless steel) electronic scales
SAHEL TRADING Co. Ltd, P. Box 10967, Dar es Salaam Tel: +255 222120886 55 (b) 300 kg Endel(Mild steel)
electronic scales
56 (c) 30 kg Endel electronic scales
57 (d) 30 kg Ohaus electronic scales SAHEL TRADING Co. Ltd, P. Box 10967, Dar es Salaam Tel: +255 222120886
58 (e) 15/30 kg CAS electronic scales
59 15 kg capacity Wilad Roberval c/s ISSA NDOSSY, P. O. BOX 6413, Mwanza, Tanzania.
60 15 kg capacity Kenhum Roberval c/s Wilbard Marunda, P. Box 14670, Dar es Salaam Tel: +255 222120886
61 25 mm DN Sensus Water meter Junaco
62 15 kg capacity Diamond Roberval c/s Raymond Phillipo Mcharo, 63 10 kg Kan Roberval counter scale Kahamba Nyadu,
P.O.Box Dodoma. 0754013536
64 15 kg capacity Kibo Roberval c/s Hamad Hamis Choka
65 15 kg capacity TSM Roberval c/s Eliuta F. Temba
66 5 kg capacity Wintech Electronic YP50001 Series
WINTECH ELECTRONIC P.O. Box 38419, Dar es Salaam Tel: +255 767914919/26
67 15 mm DN NWM Type water meter Davis & Shirtliff
68 2 kg capacity Wintech electronic weighing scale, YP Series
WINTECH ELECTRONIC P.O. Box 38419, Dar es Salaam Tel: +255 767914919/26
69 300 kg capacity Golden dragon Mechanical platform machine
Managing Director, Kilimo Bora Limited, P. Box 1510, Dar es Salaam
70 250 kg capacity Golden dragon Mechanical platform machine
Managing Director, Kilimo Bora Limited, P. Box 1510, Dar es Salaam
71 110 g Wintech electronic weighing scale, JA301 P Series
WINTECH ELECTRONIC P.O. Box 38419, Dar es Salaam Tel: +255 767914919/26
72 600 g capacity Wintech electronic weighing scale, DJA 600 Series
WINTECH ELECTRONIC P.O. Box 38419, Dar es Salaam Tel: +255 767914919/26
73 10000 kg capacity Wintech Suspended electronic weighing scale, OCS-SL-10 Series
WINTECH ELECTRONIC P.O. Box 38419, Dar es Salaam Tel: +255 767914919/26
74 100 kg capacity Wintech Suspended electronic weighing scale, OCS-L-Series
WINTECH ELECTRONIC P.O. Box 38419, Dar es Salaam Tel: +255 767914919/26
75 30 kg capacity Capture electronic scale Managing Director, Capture Solutions Tanzania Ltd, P. O. Box 6408,
64
Dar es Salaam +255 688133433
76 100 kg capacity Capture Suspended electronic weighing scale, OCS-SPB-01
Managing Director, Capture Solutions Tanzania Ltd, P. O. Box 6408, Dar es Salaam +255 688133433
77 15 kg capacity Teamwork Roberval c/s Managing Director, Teamwork Construction Co. Ltd, P. O. Box 11867, Dar es Salaam
78 100 kg capacity Cal on an electronic platform scale
Cal On Instruments, P. O. Box 75065, Dar es Salaam
79 15 mm Baylan DN water meter S & TECH P. O. Box 70846 DSM
80 40mm Baylan DN water meter S & TECH P. O. Box 70846 DSM
81 20 mm Baylan DN water meter S & TECH 70846 DSM
82 200 kg capacity Wintech Suspended electronic weighing scale
WINTECH ELECTRONIC P.O. Box 38419, Dar es Salaam Tel: +255 767914919/26
83 220 g capacity Wintech electronic balance
WINTECH ELECTRONIC P.O. Box 38419, Dar es Salaam Tel: +255 767914919/26
84 1000 g Wintech electronic balance WINTECH ELECTRONIC P.O. Box 38419, Dar es Salaam Tel: +255 767914919/26
85 5000 kg capacity Wintech Suspended electronic weighing scale
WINTECH ELECTRONIC P.O. Box 38419, Dar es Salaam Tel: +255 767914919/26
86 5000 kg capacity Wintech electronic platform weighing scale
WINTECH ELECTRONIC P.O. Box 38419, Dar es Salaam Tel: +255 767914919/26
87 2000 kg capacity Wintech electronic platform scale
WINTECH ELECTRONIC P.O. Box 38419, Dar es Salaam Tel: +255 767914919/26
88 1000 kg capacity Wintech Suspended electronic weighing scale
WINTECH ELECTRONIC P.O. Box 38419, Dar es Salaam Tel: +255 767914919/26
89 1000 kg Wintech electronic platform scale
WINTECH ELECTRONIC P.O. Box 38419, Dar es Salaam Tel: +255 767914919/26
90 500 kg capacity Cal on the electronic platform scale
Cal On Instruments, P. O. Box 75065, Dar es Salaam
91 15 kg capacity Comorock Roberval c/s Nelson A. Kato, P.O.Box 1730, Dar es Salaam, Tanzania.
65
92 15 mm Aimei DN water meter Alternative Solution, P.O.Box 14189, Dar es Salaam, Tanzania
93 15 mm Suwasa DN water meter Daka Traders & General Supplies, P.O.Box 619, Singida,Tanzania
94 15 mm Sensus DN water meter Trans Ocean supplies Ltd, P.O.Box 10216, Dar es Salaam, Tanzania
95 15 mm Baylan DN water meter Junaco Group of Companies, IPS Building, 10th Floor, P.O.Box 77756, Dar es Salaam, Tanzania
96 20 mm Baylan DN water meter Junaco Group of Companies, IPS Building, 10th Floor, P.O.Box 77756, Dar es Salaam, Tanzania
97 20 mm Aimei DN water meter Alternative Solution, P.O.Box 14189, Dar es Salaam, Tanzania
66
Annex 6: Levies and Charges removed by the Ministry of Agriculture and Livestock budget Speech 2017/18
67
68
69