Category Archives: Finance,Taxation and Investment


Here is the last part of the 2014 Tanzania National Budget review. Fiscal measures The proposed fiscal changes are as follows:

•• Reduce duty rate on:
— Buses under HS Code 8702.10.99 carrying more than
25 passengers, from 25% to 10% for a period of 1 year.
— Papers under HS Codes, 4805.12.00 and
4805.30.00 only, from 25 % to 10 %.
•• Increase duty rate on:
— Chemical based (petroleum) aerosol spray under HS Code
3808.91.39 from 10% to 25%.
•• Grant duty exemption on:
— Machinery spares and inputs for use in development and
generation of wind and solar energy.
— Importation of Electronic Fiscal Devices for a period of one
year (Tanzania only).
— Importation of goods used in the manufacture of gas
•• CET rate:
— Extend the stay of application of the CET rate of 35% on
wheat grain under HS Codes 1001.90.10 and 1001.99.90,
and apply a CET rate of 10 % for the period of one year.
•• Continue to grant duty remission to:
— Soap manufacturers using LABSA raw materials under HS
Code 3402.11.00; HS Code 3402.12.00 and HS Code
3402.19.00, from 10% to 0% for a period of one year.
— The Armed Forces Canteen Organisation for another year.
•• Duty exemption
— Remove duty exemption on splints used in manufacturing
•• Taxes due on the importation of petroleum products must be
remitted on importation, rather than 45 days later.
•• The removal of cement from the list of deemed capital goods
which are tax exempted under the Tanzania Investment Centre.
•• An increase in the minimum capital requirement for foreign
investors through Tanzania Investment Center from US$ 20
million to US$ 50 million.
•• The amendment of the Business Licensing Act, No. 25 of 1972 to
enable the Government to impose new business licensing fees.
•• Reductions of the export levy on raw hides and skins from
90% or TZS 900 per kilogram to 60% or TZS 600 per kilogram,
whichever is the higher.
•• The amendment of the Vocational Education and Training Act,
CAP 82, in order to include additional institutions in the list of

Financial Sector
•• Launching of the National Financial Inclusion Framework (NFIF).
•• Tanzania Agricultural Development Bank (TADB) is established.
It’s operationalization is in progress.
•• Growth in the number of Banks from 51 in 2013 to 53 in 2014.
and insurance companies from 28 in 2013 to 30 in April 2014.
•• Capital requirement for community and commercial banks
remain unchanged – compliance is expected by 2015.

Infrastructure Development
Transport infrastructure
•• Total budget of TZS 2,109.0 billion has been set aside for
procurement of wagons, rehabilitation of the central railway line
and for the construction and rehabilitation of roads and bridges.
•• Infrastructure development is geared towards reducing
congestion in urban areas, costs of transport and transportation
of goods and services.
•• TZS 90 billion set for construction of Kinyerezi I gas fired
electricity generation plant.
•• TZS 290.2 billion is for Rural Electrification Agency (REA) for
distribution of electricity in rural areas.
Oil and Gas
•• TZS151billion set for the completion of gas pipeline from Mtwara
to Dar es Salaam.
•• Introduction of new natural gas laws.
•• Agriculture created 130,974 jobs.
•• Budget set aside a total of TZS 1,084.7 billion for strengthening
irrigation infrastructure, construction of warehouses and markets
and to create available loans for promotion of food and cash
crops production.
Human Resource Development
•• Government plans to support youth skills development in oil and
gas courses in the country and abroad. Currently 124 students
will be financed by the Government and 35 students will be
awarded scholarships by Development Partners.
•• Total of TZS 1,588.2 billion has been set aside for procurement
of medicines, prevention of epidemic diseases, and immunization
for children, construction of hospitals and dispensaries and HIV
and malaria control.
Water and sanitation
•• Total of TZS 665.1 billion has been set aside to improve urban
and rural water infrastructure which includes continuing with
the construction of 10 water wells in every Local Authority.


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Credit card myths busted

Credit card myths busted When it comes to credit cards, there are a lot of nasty myths and misconceptions passed around. These can often scare off first-time applicants for standard and balance transfer credit cards, but most are untrue and are not worth paying attention to.To clear things up, let’s bust some credit card myths.Myth

via Credit card myths busted.


Clarification on 5% Withholding Tax on Services – Pracice Note No. 01/2013

Following the issue of Practice Note No. 01/2013  for Withholding Tax on Payments of Service Fee to a Resident Person under Section 83(1) (c) of the Income Tax Act, Cap. 332 was issued in  August 2013, a lot of issues have been  raised by various groups who are affected by the it.


Some people Confuse when the Law says Resident Person  Whether the Practice Note is applicable to Zanzibar residents or not;

The Practice Not number 01/2013 on withholding tax on service fee paid to a resident person under section 83 (1) (c) of the Income Tax Act, Cap 332 was made under Section 130 of the Act. Income tax is a Union matter, therefore the practice Note is applicable to all parts of the Union.


This Practice Note is issued under Section 130 of the Income Tax Act, Cap. 332 as amended from time to time.

 This practice note was intended to address administrative problems arising from the wide scope of the recently introduced withholding tax on any service fee payable by a resident person to another resident person.

I will try to clarify on Some of issues Raised , This is to my Understanding of the practice as published by Tanzania Revenue Authority.

a)       Lack of clarity between paragraphs and about types of services subject to withholding tax

Generally, the services whose payments are subject to withholding tax are professional services or consulting services of independent business character. The practice note under paragraph has gone further to list these services to be those of scientific, literary, artistic, educational or training activities of physicians, surgeon lawyers, engineers, architects, surveyors, dentists, accountants and auditors. This list represents services falling under ‘’professional or consulting ‘’. The objective of the practice note is to cover service whose payments are subject to withholding tax under section 83 © of the Income Tax Act, Cap 332.

(b) Are services not listed in paragraphs and are subject to withholding tax.

The intention of the practice Note is to narrow down the scope of the application of Section 83(1)(c) to professional or consulting service only where a resident person pays service fees to another person. Paragraph of the Practice Note provides for the service that are of professional or consultancy nature which were intended to be subject of the withholding tax. This paragraph has listed some of the professional or consultancy services. However, this paragraph has only some of The professional or consultancy services falling within the withholding tax net and hence the list is not exhaustive. In so far as the service is a professional service or a consultancy service it falls within the ambit of paragraph

Paragraph has provided a list of payments that are excluded from the scope of the 5% withholding tax that would have otherwise been subjected to the tax by virtue of Section 83 (1) (c).

Therefore, in order to determine whether a service fee payment is subject to withholding tax of 5%, one has to check whether the service fee is of a professional or consulting in nature. If the service is not professional or consulting in nature then the payment in respect of the service is not subject to withholding tax deduction. On the other hand, if the service is professional or consulting in nature and it is not specifically listed under paragraph then the payment is subject to withholding tax.

List of  Services Not Applicable to WT Deduction:

SN                Type of Service Applicability of withholding tax
1 Hotel/ accommodation Not applicable
2 Security services Not applicable
3 Clearing Services Not applicable
4 Loading and offloading services Not applicable
5 Storage services Not applicable
6 Packaging Services Not applicable
7 Vehicle Rental Not applicable
8 Equipment rental Not applicable
9 Supply of agency staff Not applicable
10 Telephone Services Not applicable


Blessed Sunday ALL



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Dar es Salaam Stock Exchange Updates: weak performance compared to Last week results

THE Dar es Salaam Stock Exchange (DSE) performed dismally in both turnover and activity levels last week
as compared to the previous week’s trading.

Turnover amounted to 879m/-, a 92.3 per cent decline compared to 11.3bn/- of the previous week while activity
level shrunk, with shares traded declining to 1,344,490 from last week’s 34,679,010.

The weekly market commentary by Tanzania Securities Limited (TSL) shows that the DSE All Share Index (DSEI) gained grounds by 0.22 per cent to settle at 1,611.15.

The Tanzania Share Index (TSI) closed at 1,961.23, mainly contributed DCB, NMB and TBL counters that closed the week at 500/-, 1,760/- and 3,340/- share prices, respectively.

Both Indices strengthened with the banking segment Index gaining 2.32 per cent to close at 2,084.77 points, buoyed by gains made on the DCB and NMB counters.The Industrial and Allied Index closed at 2,063.09 points, thanks to gains on TBL counter.

Banks accounted for 94 per cent of the week’s total volume traded and 76 per cent of the market value. Mainly local investors dominated in CRDB counter trading during the week, with a mere one per cent of the counter turnover coming from foreigners.

The counter traded 851,308 shares at a price of between 320/- and 325/-. NMB transacted 151,528 shares at
between 1,740/- and 1,760/- per share.

Twiga was the most active counter among the Industrial and Allied sector during the week, moving 59,011 shares
at a price of 2,700/- each. Simba followed with 14,400 shares transacted at 2,400/- per share while TBL closed the week at 3,340/- per share having moved 7,700 shares.

A total of 3,553 shares of Swissport changed hands at 2,240/- each while TCC moved 100 shares at 6,800/-.

The PAL counter moved 400 shares at 475/- and TTP moved 50 shares at 600/- each share as TOL counter remained
dormant for the whole of the week.



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Gold outlook worst in commodity survey

Gold outlook worst in commodity survey



Gold has the worst 12-month outlook among commodities and will trade below $1,400 an ounce in a year, according to an investor poll by Credit Suisse Group AG.

Sixty percent of respondents named bullion as having the worst outlook, 18 percent picked copper and 16 percent selected corn, the bank said in an e-mailed report today. Fifty-one percent predicted gold will fall under $1,400 in 12 months, it said. The bank polled 185 investors including hedge funds, pension funds and family offices on May 15 in London.


Gold has the worst 12-month outlook among commodities and will trade below $1,400 an ounce in a year, according to an investor poll by Credit Suisse Group AG.

Sixty percent of respondents named bullion as having the worst outlook, 18 percent picked copper and 16 percent selected corn, the bank said in an e-mailed report today. Fifty-one percent predicted gold will fall under $1,400 in 12 months, it said. The bank polled 185 investors including hedge funds, pension funds and family offices on May 15 in London.

“Bearishness for gold was a very clear consensus,” said Kamal Naqvi, the head of commodities sales for Europe, Middle East and Africa at Credit Suisse. “It’s not about just not buying gold, it’s about shorting it,” or wagering on a drop.

Gold slumped into a bear market last month as investors lost faith in the metal as a store of value. Bullion is down 17 percent this year, compared with the 2.9 percent drop for the Standard & Poor’s GSCI gauge of raw materials.

Fifty-three percent of investors expect commodity prices to stay near current levels, Credit Suisse said. Most were underweight raw materials or had zero exposure, while they expected to be overweight or neutral in 12 months, the bank said. Investors named relative value trades, fundamentally based directional trades and volatility as the best ways to extract value from commodities.





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Press Release:Dun & Bradstreet Promises Most Comprehensive Credit Bureau in Tanzania

L-R Adrian Pillay (GM Business Development), Adebowale Atobatele (GM Tanzania Bureau) Miguel Llenas (C.E.O) at the Dun & Bradstreet Credit Bureau Workshop in Dar es Salaam recently.

Participants at the Dun & Bradstreet Credit Bureau (T) Limited Workshop

Press Release

Dun & Bradstreet Promises Most Comprehensive Credit Bureau in Tanzania

FINANCIAL institutions in Tanzania are set to enjoy better protection from loan defaulters following the announcement that Dun & Bradstreet Credit Bureau, a company licensed by the bank of Tanzania to provide credit reference services in Tanzania announced that it will commence operations in a few weeks.

The workshop which was attended by Senior Executives of Banks and Financial Institutions in Tanzania, also had in attendance representatives of the Bank of Tanzania, and the International Finance Corporation who graced the event as observers and promoters of the credit reference system in Tanzania.

Speaking at the workshop, General Manager, Dun & Bradstreet Credit Bureau Tanzania Limited Mr. Adebowale Atobatele, explained that with the use of a credit report in the assessment of loan applicants, banks and financial institutions can easily estimate the credit worthiness of loan applicants thereby ensuring that they approve the loans of only those who they (banks) consider to have the propensity to repay based on their credit history.

Speaking further on the benefit of credit reporting, Mr. Adebowale Atobatele said, “The benefits of credit reporting are multi-dimensional. For example, banks and financial institutions, they can expect to make accurate risk predictions, prevent loss, reduce their NPL ratio and increase their ability to lend to a broader risk segment, Also, with a good credit report, consumers can expect to have their loan applications objectively reviewed, they can expect to have easy access to credit and build a strong reputation collateral.”

Speaking during the opening of the workshop D&B Chief Executive Officer (CEO) Miguel Llenas said, “Our aim is to build the most comprehensive Credit Bureau in Tanzania thereby playing a significant role in boosting Tanzania’s economy and financial soundness. We are in Tanzania to help improve the lending culture. We want to see a situation where people develop a culture of repayment not only because it is morally right to repay loans but because it is in the best interest of the economy.”

Credit bureaus, established by Dun & Bradstreet, have reduced the information asymmetry between lenders and borrowers thereby creating transparent and efficient credit information system.

Dun and Bradstreet Credit Bureaus Tanzania Ltd. will work closely with Central Banks, commercial banks, financial institutions, insurance companies, economic development boards and various government entities and to build a robust credit information infrastructure for Tanzania.

Nevertheless Mr. Adrian Pillay General Manager Dun and Bradstreet Credit Limited named some D&B Credit Bureaus implementations as Credit bureau of Nepal, CRB that is in Sri Lanka, Emcredit that is in Dubai, Credit Reference Company that is in Nigeria and iScore in Egypt.

Participants at the workshop expressed hope, that with the presence of Dun & Bradstreet Credit Bureau in Tanzania, the country’s financial sector will be further protected from collapse.


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Understanding The Real Value of Gold

Understanding The Real Value of Gold

Investments, although very difficult for most of us to theoretically understand, practically apply and emotionally stick to as to what asset allocation to follow or what time frame to adhere to, there is one investment which most of us, particularly Indians, love and also believe they understand — gold.

A layman may not understand the benefits of investing in stocks or bonds or hoarding cash but the same person might easily understand and believe that he knows the value of gold.

Besides traditional options like purchasing jewellery or investing in gold bars and coins, there are now a plethora of new options available like the National Spot Exchange, Gold ETFs and also Gold Fund of Funds.

The gold bulls made a killing over the past decade with gold prices multiplying more than seven times in 11 years from USD 80/10 gm in 2001 to USD 600/10 gm by 2012.

However, the recent unprecedented crash in gold prices by a nearly 20 per cent in few days have left the most convinced gold bull question the yellow metal as a good investment option.

What do we mean by an investment asset? It would mean an asset which puts money in our pockets by generating income. For example, a bond gives interest, equities give dividends, house gives rent. But what cash flow does gold give? Probably nothing.

Therefore, gold cannot be termed as investment asset but merely a “speculative item” because the person buying gold is speculating that the price of the gold will rise in future and he will be able to sell it at a higher profit — there is simply no interim income from it.

Most assets like steel, oil, copper have industrial use but what use does gold have besides making golden tooth? If the industrial use of gold is practically nothing, why is it so costly?

Its value is high because governments and Central Banks (led by the US Fed) are running their money printing machines continuously, relentlessly and at a brisk speed.

The US Dollar has lost 97 per cent of its value against gold over the past 40 years. Hence, its not gold which has gone up but it’s the USD which has gone down because of the indiscriminate money printing by the US Fed.

Now, has gold risen consistently over the past few decades? No, not at all. International gold prices crashed from $850 per ounce in 1981 to $250 per ounce in 2001, negative return over a 20-year long period. However, the “rupee value” of gold was up during the same period, simply because the Rupee which was Rs 8 per USD in 1981 crashed to Rs 45 by 2001.

Hence, because the Indian currency lost significant value against the USD Indian gold prices in rupee terms went up while actual international gold prices in USD crashed during the same period. And has gold given great returns over a 20-year period? No.

Indian gold prices are up by 8.9 per cent CAGR over the last 20 years while the BSE Sensex has given returns of 15.3 per cent CAGR over the same period. In fact, over the past 20 years, bank FD might have given better returns than gold.
Lot of the so called financial experts will educate you that gold is a hedge against inflation.

However, that may not necessarily be the case. Its not directly related to inflation but to “real interest rates” of USD denominated assets like US Treasuries.

When the real interest rate is down and close to inflation, gold is likely to appreciate in value because to hold gold (which does not give any cash flow), the investor has to forego interest on his investments and hence real interest rates have to be low or negative so as to induce the investor to hold onto something which does not give any real cash flow.

Till the US Fed continues to print money, the USD will remain weak. Till there is uncertainty in the global economy, the money printing will continue.

Till the USD remains weak, some shift from Asian Central Banks like China, India will happen from USD denominated securities to hard asset like gold.

Till there is uncertainty, people will move to the so called safe heaven of gold. Till the rupee remains structurally weak against the USD over the long term, Indian gold prices would be supported in rupee terms. Till women in India love gold ornaments, its demand will rise.

So, the next time you invest in gold, weigh all these factors and remember that gold is not an income producing investment asset but merely a speculative item whose price may go up or down depending on the conditions which determine its value.

What makes gold dearer

Value of the US Dollar: Since gold is internationally quoted in US Dollar, the weaker the US Dollar, the higher the price of gold and vice versa

Real Interest Rates in US Dollar denominated assets: Low or negative real interest rates results in higher gold prices and vice versa
Indian rupee vis-a-vis US Dollar: Since Indians buy gold in rupees, the weaker the rupee against the US Dollar, the higher will be the price of gold and vice versa


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