In light of significant regulatory reforms aimed at enhancing economic development in Tanzania, businesses operating within the country must stay vigilant and flexible. According to the World Bank, Tanzania’s economy has been resilient, growing by 5.2% in 2023 compared to 4.6% in 2022. The services sector remained the main driving force behind Tanzania’s overall economic growth, expanding by 7.3%, supported by buoyant economic activities in financial and insurance, transport and storage, and trade and repair subsectors. Despite recurrent droughts and floods, the agriculture sector grew at 3.4% in 2023. Foreign direct investment has continued to pour into Tanzania.
The evolving regulatory landscape presents both opportunities and challenges, necessitating proactive strategies to ensure compliance and mitigate risks. Adili Group stands at the forefront of providing expert guidance in regulatory compliance and risk management. This article delves into recent regulatory changes in Tanzania and offers practical compliance strategies, showcasing Adili Advisory’s expertise.

Understanding Recent Regulatory Changes
In recent years, Tanzania has introduced several regulatory reforms aimed at enhancing economic growth, attracting foreign investment, and ensuring sustainable development. Key areas of change include:

Tax Reforms
The Tanzanian government is dedicated to reducing the fiscal deficit by improving tax collection and controlling spending. It has updated its tax framework to increase revenue and enhance tax compliance. The new regulations include adjustments to corporate tax rates, VAT rules, and tax incentives for specific sectors. These changes involve income tax exemption for internal restructuring of mining companies according to framework agreements, modifying Electronic Fiscal Device (EFD) penalty to the higher of TZS 3,000,000 or 20% of the tax in case of failure to issue invoices/receipts, excluding transactions involving the issuance or transfer of shares happening locally from the scope of section 56 of the Income Tax Act, and raising the annual VAT threshold from TZS 100 million to TZS 200 million.
Businesses must keep informed about these changes to ensure accurate tax reporting and compliance.
Investment Regulations

Tanzania has recently improved the process for foreign investors to do business in the country. The Tanzania Investment Centre (TIC) has been established as a one-stop shop to assist and oversee investments, making the process more efficient.

According to the January 2024 Monthly Investment Factsheet, the Centre recorded project registrations totaling more than USD 300 million in 2023. Some recent changes in the Tanzania Investment (Amendment) Regulations, 2024 include shifting the chairmanship of the Technical Committee from the Permanent Secretary to the Deputy Permanent Secretary of the Ministry of Finance. The Minister in charge of investment is now required to make decisions on appeals received from investors within 14 days, and these decisions can be appealed in court.

Additionally, businesses can now apply for certificates of incentives which serve as evidence of compliance with investment requirements. One of the incentives offered is a 75% import duty relief on capital goods.

Labour Laws
Proposed changes to labour laws are geared towards enhancing the rights and conditions of workers, encompassing revisions to minimum wage mandates, employment agreements, and mechanisms for resolving disputes.

Environmental Regulations
New, stricter environmental regulations have been put in place to promote sustainable development. These regulations cover waste management, emissions, and conservation practices. For example, Tanzanian authorities and the IMF have agreed on a reform program to tackle climate change challenges.

This program is supported by the Resilience and Sustainability Facility (RSF) and marks the completion of the third review under the Extended Credit Facility (ECF). The RSF will help the authorities implement structural reforms and make investments in adaptation and mitigation to address the risks and challenges associated with climate change.

Data Protection
Tanzania has introduced the Data Protection Act to safeguard personal data and privacy rights. The recently operationalized Personal Data Protection Commission (the Commission) was established by the Personal Data Protection Act, 2022 (the Act) to protect individuals’ privacy and ensure that the collection and processing of personal data adhere to the principles outlined in the Act.

Businesses handling customer information must comply with data protection requirements, including obtaining consent, ensuring data security, and promptly reporting any breaches.

Compliance Strategies for Businesses
To navigate regulatory changes, businesses operating in Tanzania can use these practical compliance strategies:

1. Conduct Regular Compliance Audits: Regular audits help identify compliance gaps and areas for improvement. Engaging professional services like Adili Advisory can provide an objective assessment and expert recommendations.

2. Implement Robust Internal Controls: Establish strong internal policies and procedures to ensure compliance with regulatory requirements. This includes maintaining accurate records, conducting employee training, and setting up a compliance management system.

3. Leverage Technology: Use compliance management software to track regulatory changes, automate reporting processes, and maintain accurate records. This can significantly reduce the risk of non-compliance and improve efficiency.

Adili Advisory: Your Partner in Compliance
The Adili Group, with its extensive experience and pan-African presence, is dedicated to supporting businesses through its two key offerings: Adili Advisory and Adili Private Clients. Adili Advisory excels in providing high-quality corporate, risk advisory, and outsourcing services. Our team, with over 150 years of combined experience, delivers tailor-made solutions in regulation and compliance, risk management, and enhancing business efficiency.

By partnering with Adili Advisory, businesses can confidently navigate the regulatory landscape in Tanzania. Our expertise ensures that companies remain compliant, mitigate risks, and capitalize on new opportunities arising from regulatory reforms.

Conclusion
Businesses need to ensure they comply with the constantly evolving regulations in Tanzania in order to achieve success. By adopting proactive compliance strategies and leveraging the expertise of Adili Advisory, businesses can effectively manage regulatory challenges and thrive in the Tanzanian market.

Sources:
1. World Bank Report, April 2024
2. Tanzania Revenue Authority. “Tax Reforms and Policy Updates.” TRA, 2023.
3. Deloitte. “Tanzania Budget Highlights 2023/24.” Deloitte, 2023.
4. Tanzania Investment Centre. “Investment Guide to Tanzania.” TIC, 2023.
5. Ministry of Labor, Tanzania. “Labor Law Reforms.” Ministry of Labor, 2023.
6. National Environment Management Council. “Environmental Regulations Update.” NEMC, 2023.

For further information, please contact us at info@adili.africa