Businesses in Tanzania will now need a tax clearance certificate from the Tanzania Revenue Authority for the annual renewal of their licences.

The requirement, which had been repealed in 2004, comes after an amendment was made in the Tanzania Business Licensing Act (CAP 208) in June.

But the Confederation of Tanzania Industries director of policy and advocacy Hussein Kamote said the amendment to the law would increase bureaucracy and by extension, the cost of doing business.

“What if TRA delays approving the audited books of accounts?” Kamote asked. “That would delay the licence. I think they should revert to the previous procedure.”

The latest World Bank Ease of Doing Business Index places Tanzania at number 131 out of 181 nations across the globe.
The tax clearance is issued by TRA while the licence is issued by the Trade Ministry.

A source at the Dar es Salaam Merchants Chamber told The EastAfrican that some chamber members are forced to spend large sums of money on financial statement audits at the wrong time of the year to appease the TRA, a problem that forces some members to offer bribes.

The head of the Business Licensing Department at the Ministry of Trade, Christopher Nasari, and TRA Deputy Commissioner for Internal Revenue Generous Bateyunga, said the procedure has been reintroduced to curb tax evasion.

The tax clearance certificate is a condition for obtaining a business licence everywhere in East Africa, Mr Nasari said. It is, therefore, common practice that should be accepted, he added.

But the business licence application form TFN 211 contradicts the amended Business Licensing Act (CAP 208). TFN 211 stipulates that the Tanzania business license should not be linked to any other payments.

Mr Nasari said the contradiction will be solved when new application forms are printed, adding that the form only involved procedural matters.

Ms Bateyunga said that the tax clearance certificate’s link to the trading licence will serve as a control tool and not an impediment.

The Tanzania Business Licensing Act (CAP 208) was amended in parliament in June and assented by the [president on June 28. Section 49 of Part XVI of the Tanzania Finance Act 2015 amends Section 13 of “The Principal Act” to make it mandatory for every business to obtain a tax clearance certificate from the TRA for annual renewal of their business licence.

Source: The East African

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of TradeMark Africa.