SEVENTH  SCHEDULE
INCENTIVES AND ALLOWANCES FOR APPROVED INVESTOR
[Made under section 31(3)]

PART I
Incentives and allowances  in the Free Economic  Zone

CATEGORY "A" FREE ECONOMIC ZONE DEVELOPERS:
DEVELOPMENT OF INFRASTRUCTURE

1.  The developer of a Free Economic Zone shall benefit to the following incentives:

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

CATEGORY "B" FREE ECONOMIC ZONES OPERATORS: APPROVED INVESTORS PRODUCING FOR SALE INTO THE CUSTOMS TERRITORY

1.  Approved Investors whose primary markets are within the customs territory shall be entitled to the:
(a)    remission of customs duty, value added tax and any other tax charged on raw materials and goods of capital nature related to the production  in the Free Economic Zones;
(b)   exemption from payment of withholding tax on interest on foreign sourced loan;

(c)    remission  of customs duty, value added tax and any other tax payable  in respect of importation of one administrative vehicle, one ambulances, firefighting equipment and fire fighting vehicles and up to two buses for employees' transportation into and from the Free Economic Zones;
(d)     exemption from pre-shipment or destination inspection requirements;
(e)     on site customs inspection of goods within Free Economic Zones;
(f)     access to competitive, modern and reliable services available 'within the Free Economic Zones; and 

(g)    subject to compliance with applicable conditions and procedures for foreign exchange and payment of tax whenever appropriate ,unconditional  transfer through any authorized dealer bank in freely convertible currency of;
(i)     net profits or dividends attributable to the in vestment;

(ii)     payments in respect of loan servicing where a foreign  loan has been obtained;
(iii)  royalties,  fees  and  charges  m  respect  of  any  technology  transfer agreement;

(iv)   the  remittance  of proceeds  in the event  of sale  or  liquidation of  the licensed  business  or any interest  attributable to the licensed  business; and
(v)    payments  of  emoluments  and  other   benefits  to  foreign   personnel employed  in Tanzania in connection  with the licensed  business.

CATEGORY  "C" FREE ECONOMIC ZONE OPERATORS: APPROVED INVESTORS PRODUCING FOR EXPORT MARKETS

1.   Approved   Investors   producing   for  export   markets   m  non-manufacturing  or processing sectors shall be entitled  to the:
(a)    subject  to compliance with applicable  conditions and procedures, accessing the export credit guarantee  scheme;
(b)    remission  of customs  duty, value  added  and any other  tax charged  on raw materials  and  goods  of capital  nature  related  to the production  in the Free Economic  Zones;
(c)    exemption from  payment  of corporate  tax for an initial  period  of ten years and  thereafter, a corporate  tax shall  be charged  at the  rate specified  in the Income Tax Act;
(d)    exemption from payment of withholding  tax on rent, dividends and interests for the first ten years;
(e)    exemption  from  payment  of  all  taxes  and  levies  imposed   by  the  Local Government Authorities for products  produced  in the Free Economic Zones for a period of ten years;
(f)     exemption from  pre-shipment or destination inspection  requirements; (g)      on site customs  inspection  of goods in the Free Economic  Zones;
(h)    remission  of  customs  duty,  value  added  tax and  any  other  tax  payable  in respect of importation  of one administrative vehicle, ambulances, firefighting equipment and vehicles and up to two buses for employees' transportation to and from the Free Economic  Zones;
(i)     treatment of goods destined into Free Economic Zones as transit goods;

(j)     access to competitive, modern and reliable services available within the Free Economic Zones; and
(k)   subject to compliance with applicable conditions and procedures for foreign exchange and payment of tax whenever appropriate unconditional transfer through any authorized dealer bank in freely convertible currency of:
(i)     net profits or dividends attributable to the investment;

(ii)   payments in respect of loan servicing where a foreign loan has been obtained;
(iii)  royalties,  fees  and  charges  111   respect  of  any  technology  transfer agreement;
(iv)     the remittance of proceeds in the event of sale or liquidation of the business enterprises or any interest attributable to the investment;
(v)     payments  of  emoluments  and  other  benefits  to  foreign  personnel employed in Tanzania in connection with the business enterprise;
(I)    twenty percent of total turnover is allowed to be sold to the local market and is subject to the payment of all taxes;
(m)  hundred percent foreign ownership is allowed ; and
(n)   no limit to the duration that goods may be stored in the Freeport Zones.

2.  For purposes of this section investors licensed primarily for export markets are investors whose exports are more than eighty percent of total  annual production.

PART TWO
Incentives and allowances outside Free Economic Zones

1. Approved investor investing outside Free Economic Zones, may be granted the:
(a)     exemption  from  payment of import duty, excise  duty Value Added Tax and other similar taxes on machinery, equipment, spare parts, vehicles and other input necessary and exclusively required by that enterprise during construction period indicated in the Investment Certificate;
(b)    exemption from payment of business license fee for the first three months of trial operation;
(c)    corporate tax exemption for up to five years;
(d)    hundred percent foreign ownership;
(e)    hundred percent retention of all profits after tax;
(f)     hundred percent allowance Research and Development; and

(g)    hundred percent allowance for free repatriation of profit after tax.

2.  Without prejudice to the provisions of paragraph 1 of this Part, approved investor investing in manufacturing sector may further be granted the:
(a)     exemption from payment of any tax on all goods produced for exports;

(b)    exemption from payment of trade levy for raw materials and industrial inputs procured from Tanzania Mainland;
(c)     exemption from payment of import duty, Value Added Tax and other similar taxes on raw and packaging materials during project operations;
(d)    exemption of Income Tax on interest on registered borrowed capital; and
(e)     hundred  percent  allowance  investment deduction on capital  expenditure within five years;


3.   Without prejudice to the provisions of paragraph 1 of this Part, Approved Investor investing in real estate business may also be granted the:
(a)    exemption of income tax on interest on borrowed capital;
(b)    stamp duty exemption;
(c)     hundred  percent  allowance  investment deduction on  capital  expenditure within five years; and
(d)    capital gains tax on properties sold or purchased.