Duty Exemptions on Capital Goods in Tanzania: Who Qualifies

This page is the capital-goods relief operating file: which tax an incentives certificate reaches, who grants it, and what a declaration must quote before a container is released. It is not a tariff manual, and not an assurance that plant lands free of every charge.

• The money a threshold is measured against: increasing share capital
• Sector floors that bind before any incentive: minimum capital to start
• The first three months around the plant: a 90-day launch plan
• Imported stock sold online afterwards: e-commerce compliance

As at 15 September 2026. Confirm the live position on tiseza.go.tz and tra.go.tz; this file rests on the East African Community Customs Management Act, the Value Added Tax Act Cap. 148, the Tanzania Investment Act, 2022 and the 2025 investment statute that created TISEZA.

Most plant already enters at zero duty

The Common External Tariff sorts goods into three ordinary bands (nil on raw materials and capital goods, 10% on intermediate goods, 25% on finished goods) with a fourth band reaching 35% since 1 July 2022. Machinery, plant and most electrical equipment sit in the nil band. A lathe, a transformer or a packaging line arrives duty-free because of how it is classified, not because anyone applied.

So an investor paying to secure duty relief on a production line is usually buying what the tariff hands over free. The charge that bites is value added tax at 18% under Cap. 148, assessed on customs value plus any duty payable. What decides both is the tariff heading on the entry, never the description on a supplier’s invoice.

Reserved activity and the capital threshold come first

Order runs against the investor. If the business sits among the activities Tanzania reserves for its own citizens, the schedule in force being GN No. 487A of 2025, there is no certificate to hold and no relief route at all. Read that entry before anyone budgets a landed cost.

Size is the second gate. The Tanzania Investment Act, 2022 sets minimum investment capital at USD 500,000 for a wholly foreign-owned or joint-venture project and USD 50,000 for one owned by citizens. Below those figures the project is lawful; it pays ordinary rates and recovers input tax through returns if registered for VAT. Dressing a smaller project up is what beneficial-ownership filings expose later.

TISEZA recommends, the Commissioner General exempts

Two hands, in sequence. The investment authority issues the incentives certificate and annexes a schedule of the plant to be imported. TRA’s Commissioner General then approves relief against that schedule, under the Fifth Schedule to the customs Act and under whatever the live VAT instrument allows. The certificate alone releases nothing at the port.

The authority itself changed. The 2025 investment statute folded the Tanzania Investment Centre and the Export Processing Zones Authority into one body, the Tanzania Investment and Special Economic Zones Authority, and the procedures now sit on tiseza.go.tz. Correspondence still addressed to TIC is the symptom of a file run from an old checklist, and the reason a verbal assurance given at a counter years ago is worth nothing.

Zone projects run differently: an operator licensed into an export processing zone takes relief tied to exporting at least 80% of output, a trading commitment rather than an upgrade. On the islands the certificate belongs to the Zanzibar Investment Promotion Authority under its 2018 Act. Customs is a Union matter, so TRA still assesses import duty at the island ports; island VAT is charged at 15% by the Zanzibar Revenue Authority, which a Mainland certificate does not touch.

Deemed capital goods: the 75% row and the 20% cap

Deemed capital goods are the items consumed in putting a project up rather than the plant that makes it work: cement, roofing, steel, cabling, fencing, a site pick-up, a standby generator. They carry real duty, which is why this part is worth arguing.

The incentive published by the investment authority relieves 75% of the import duty otherwise payable on them and limits their value to 20% of the capital goods actually brought in. Both the rate and the ceiling are stated in the authority’s own incentives procedure and have moved before; confirm them on tiseza.go.tz before they reach a budget. A quarter of the duty still runs, so a project that wrote nil here is out by that quarter plus the tax on it.

Which head the certificate switches off

The sequence the desks take

1. Test eligibility before the purchase order. The reserved-activity entry, then the capital floor. A project failing either has nothing to apply for.
2. Incorporate and take the tax numbers. BRELA registration, the TIN, and VAT registration where turnover requires it: input recovery depends on it.
3. Apply to the investment authority with a costed business plan, a timetable, evidence of the site and proforma invoices.
4. Get the annex right at that moment. Every later approval is read against it by tariff heading and quantity, so commercial shorthand costs weeks later.
5. Lodge the relief application with TRA before the goods sail, quoting the certificate, the invoices and a code for each line.
6. Wait for approval to register in TANCIS and for its reference to reach the clearing agent.
7. Clear against that reference. Any mismatch in heading, quantity or description holds the container while storage accrues.
8. Keep the pack for audit and disposal. Entries are reopened long after the crate is empty, and a relieved asset cannot be sold on a board’s decision.

What the relief file carries

• The incentives certificate with its annexed equipment schedule.
• Certificate of incorporation, memorandum and articles, TIN and VAT certificates.
• The costed business plan and timetable lodged with the authority.
• Proforma invoice, packing list, bill of lading or airway bill, coded line by line.
• Certificate of origin where a preferential EAC or SADC rate is claimed.
• Evidence of the project site: the derivative right, registered lease or title.
• Board resolution appointing the licensed clearing agent, with authority naming the consignment.
• The approval itself, printed with its system reference.

Illustrative arithmetic: a bottling line landed at Dar es Salaam

Take plant with a CIF value of TZS 1,200,000,000 falling in the nil band. Import duty is zero without any certificate. Tax at 18% on that value is TZS 216,000,000, and the Railway Development Levy at 1.5% adds TZS 18,000,000.

Alongside it the project brings in building materials, a site pick-up and a generator worth TZS 240,000,000: exactly the one-fifth ceiling. At 25% the duty would be TZS 60,000,000; relief of three quarters leaves TZS 15,000,000 to pay. Tax is then charged on TZS 255,000,000, the value plus the duty actually payable, giving TZS 45,900,000, and the levy adds TZS 3,600,000.

Totals: TZS 15,000,000 of duty, TZS 261,900,000 of tax and TZS 21,600,000 of levy: TZS 298,500,000 against invoices of TZS 1,440,000,000, close to a fifth. The certificate moved TZS 45,000,000 and nothing else. Where the relieving instrument does reach the tax head, that TZS 261,900,000 moves with it; otherwise it is cash out on the day of release, recoverable only through returns. Illustrative arithmetic, not a quotation; bands and reliefs move by Finance Act.

Disposal, and the duty that comes back

Relief is conditional, and the condition attaches to the machine rather than to the company. Selling a relieved asset, leasing it out, or working it on a project other than the one it was listed for, without the Commissioner’s written permission, makes the duty and tax forgone payable and exposes the goods to seizure.

Three situations catch operators out: a site pick-up registered in a director’s name; equipment quietly moved to a second factory; and a sale of the business assets, where the buyer takes the plant directly: a share sale leaves the importer of record intact, an asset sale does not. Hold relieved items on a separate fixed-asset register carrying the entry number, so the amount forgone is visible before anybody signs.

Where this file stalls

• Shipping before approval. The vessel arrives, terminal storage starts running, and the choice narrows to paying in full or watching the clock.
• An annex written in sales language (“packaging equipment”, “assorted spares”) that no officer can reconcile to the codes declared.
• Quantities exceeded. Four compressors were listed; six are declared, and the surplus is fully assessed.
• One certificate stretched across two sites, found at audit rather than clearance.
• Second-hand plant arriving with no age or valuation evidence, so the officer values it.
• Deemed items budgeted at nil because somebody heard the word exempt and stopped listening.

Mandate-holders this file does not replace

TRA Customs owns the approval, the declaration and the post-clearance audit. The investment authority owns the certificate and the equipment annex behind it. TRA’s domestic side owns registration and input recovery. The Tanzania Bureau of Standards holds its own clearance on imported machinery, the Tanzania Ports Authority owns the terminal and the storage clock, and a sector regulator (the Mining Commission, EWURA, TMDA, TCRA) may hold a permit on the same cargo. On the islands, ZIPA and ZRA take the corresponding roles. The agent lodges the entry; liability stays with the importer of record. Zatra prepares, structures and coordinates the pack, grants no exemption and does not practise law or audit.

What to confirm before you act

• Whether your ownership is permitted in the activity, from the reserved list in force.
• Whether the project reaches the investment capital the statute demands.
• The tariff heading for every line, settled before the certificate issues, not at the port.
• Whether the live instrument reaches import tax or only duty: that sets the working capital.
• The current relief rate and ceiling on deemed items, on the authority’s own portal.
• Whether the levy and processing fee are named in the relief.
• For an island project, ZIPA’s certificate and ZRA’s position, neither answered by a Mainland file.
• The disposal conditions, before a relieved machine is sold or moved.