APPLICATION PROCEDURES AND CRITERIA FOR STRATEGIC INVESTMENT
Application Procedures for Strategic Investment
1. Approved Investor may apply to the Authority to be granted a status of being Strategic investment in accordance with the conditions and criteria specified in PART TWO of this Schedule.
2. The Authority shall consider the application and may recommend to the Minister to grant Strategic Investment Status to the applicant.
3. The Minister, after consultation with relevant institution, shall take decision on whether to grant or not Strategic Investment Status, and inform the applicant accordingly.
4. The Minister, may withdraw the strategic investment Status to any Approved Investor who has been granted Strategic Investment Status in any case, if:
- fails to comply with obligations imposed under this Act;
- fails to fulfill the criteria and conditions of strategic investment; or
- performs any act which is prohibited under this Act.
Criteria for Strategic Investment
1. Approved Investor may be granted Strategic Investment Status after he has:
- investing assets equivalent to Hundred Million United States Dollars or more and contributing at least thirty percent of this investment in form of equity;
- employing at least One Thousand people; or
- investing assets equivalent to Fifty Million United States Dollars in the innovative investment or in the disadvantageous regions in any of the following priority sectors:
(i) industrial manufacturing or assembling;
(ii) up market tourism;
(iii) agriculture and fisheries;
(iv) real estate development;
(vi) infrastructure development; and
(vii) information and Communication technology.
BENEFITS, INCENTIVES AND ALLOWANCES FOR STRATEGIC INVESTMENT
Benefits, Incentives and Allowances during Implementation of the Approved Investment.
1. Approved Investor who has been granted Strategic Investment status may, where appropriate, be granted the following benefits, incentives and allowances during implementation of the Approved Investment:
- exemption from all duties and taxes on importation and local purchases of construction goods and materials during the project construction;
- exemption of income tax on interest on capital borrowed from foreign banks;
- five years grace period on payment of Land Lease;
- hundred percent foreign ownership is allowed ;
- engagement of foreign contractors is allowed; and
- five years grace period on payment of land lease for marina in tourism investment;
Benefits, Incentives and Allowance during Operation of the Approved Investment
2. Approved Investor who has been granted Strategic Investment status may, where appropriate, be granted the following benefits, incentives and allowances during operation of the Approved Investment:
- fifty percent exemption of the prevailing rate for Corporate Income Tax;
- fifty percent exemption of Profit tax for repatriated Profit;
- fifty percent exemption o for Accelerated Depreciation for five years;
- fifty percent exemption of income tax on interest on capital borrowed from foreign banks;
- hundred percent allowance on Research and Development expenditure;
- hundred percent retention of all profits after tax; and
- hundred percent foreign ownership is allowed.
3. Without prejudice to the provisions of paragraph 1 and 2 of this Part, strategic investment in manufacturing sector, may further be granted the following additional incentives:
- exemption from payment of any tax on all goods produced for exports;
- exemption from payment of trade levy for raw materials and industrial inputs purchased from Tanzania Mainland;
- exemption from payment of Import Duty, Excise Duty and VAT on importation of heavy machines and equipment;
- exemption from payment of VAT on local purchase of heavy machinery or equipment required during production phase; and
- Additional five years allowance of fifty percent Accelerated Depreciation.