Service Levy vs Business Licence: Two Instruments, Two Desks

This page is the service levy versus business licence operating file: which instrument each charge sits in, which desk bills it, and the order a new company meets them in. It is not a council by-law digest and not a fee table.

• The levy itself: service levy on turnover
• The number every desk asks for first: TIN registration
• Why none of this reaches the island: Union vs non-Union taxes

As at 14 September 2026. Take the live Schedule figure from brela.go.tz and the levy bill from the council revenue office; this file rests on Cap. 208 with its Regulations, and on Cap. 290.

Two charges, two Acts, two desks

The business licence is a permission to trade at a stated premises in a stated activity, created by Act No. 25 of 1972, now Cap. 208, administered by the Ministry, and issued at one of two desks: BRELA for Category A, the local government authority for Category B. The fee is fixed by class in the Schedule to the Business Licensing Regulations made under the Act, payable on issue and on every annual renewal.

The service levy is not a permission. It is council revenue, listed among the own-source revenues of district councils and urban authorities in Cap. 290 and charged on corporate entities at a rate each council adopts in its by-laws under the Local Government (District Authorities) Act, Cap. 287, or the Local Government (Urban Authorities) Act, Cap. 288. The statutory ceiling is 0.3% of turnover after VAT and excise duty are stripped out. A company can hold a valid licence while in levy arrears, or the reverse; the inspector checks both.

Both Acts are Mainland statutes. Trade licensing and local government are non-Union matters, so neither reaches Zanzibar, where a business registers at BPRA, is licensed under the island’s own law and meets the Zanzibar Revenue Authority (ZRA, successor to ZRB) for non-Union taxes.

Category A or Category B: which desk issues the licence

Category A is issued by BRELA on the Ministry’s behalf through the Online Registration System (ORS). It covers the activities the Regulations keep at the centre (banking, insurance, telecommunications, mining, oil and gas, air and marine transport, and the import and export classes the Schedule names), and, whatever the activity, any business in which a non-citizen holds shares or a foreign company trades through a branch registered on a certificate of compliance.

Category B is issued by the council’s trade office for the ordinary trades of citizen-owned businesses inside that council: shops, restaurants, workshops, guest houses below the tourism-licence threshold, local transport. The trade officer (Afisa Biashara) inspects the premises before signing.

The split bites at renewal too. A company that admits a foreign shareholder moves to Category A at its next renewal; the council declines and refers the file to BRELA. Each place of business carries its own licence, and a branch takes the head office’s category.

Side by side: fee against levy

Before the process: GN No. 487A of 2025

Cap. 208 is also the instrument under which the Minister reserves activities for citizens. GN No. 487A of 2025, gazetted in July 2025, lists business activities closed to non-citizens, and a locally incorporated company majority-owned or controlled by non-citizens does not cure the reservation. Screen the activity against that list before the TIN, the lease and Form TFN 211. A Category A application in a reserved class is refused at BRELA; a Category B application that conceals foreign ownership is a false declaration under the Act, not a shortcut.

Screen sector Acts at the same point. Banking (BOT), insurance (TIRA), telecommunications (TCRA), mining (Mining Commission), energy (EWURA) and pharmaceuticals (TMDA) each issue a sector licence the application asks for as an attachment.

Sequence after BRELA and the TIN

1. Incorporate at BRELA under the Companies Act, Cap. 212, through ORS; a foreign company opening a branch takes a certificate of compliance instead.
2. Register for TIN at TRA under the Income Tax Act, Cap. 332: each director takes a personal, biometric TIN first, then the company TIN issues against the BRELA certificate.
3. Obtain the tax clearance certificate from the TRA regional office holding the file. A new company receives it against a provisional assessment; on renewal it issues only if returns are filed and instalments paid.
4. Secure the premises in the company’s name: a tenancy agreement or title held by the company, not a director. For Category B, collect the introduction letter from the Mtaa or Ward Executive Officer.
5. Lodge Form TFN 211: on ORS for Category A, at the council trade office for Category B, with the attachments, pay the Schedule fee on the control number and collect the licence.
6. Open the levy account at the council revenue office (the Treasurer’s desk): the company is registered as a levy payer and receives quarterly bills on the turnover it declares.
7. Diarise renewal and declarations together: the licence renews annually against a fresh tax clearance; the levy is declared each quarter and reconciled at year end.

Papers on the file

For the licence: Form TFN 211, completed per premises; certificate of incorporation or certificate of compliance; memorandum and articles; the TIN certificate; the tax clearance certificate; the tenancy agreement or title; directors’ national IDs, or passports with Residence Permit Class A under the Immigration Act, Cap. 54, for non-citizens; the sector licence where one applies; and, at the council, the Mtaa or Ward introduction letter and the premises inspection report.

For the levy: the council’s levy registration, the quarterly turnover declaration, the VAT returns for the period, the audited financial statements at year end, the GePG receipt for every quarter paid and, where there are branches, a schedule apportioning turnover to each council. Name and address must be identical across the BRELA certificate, the TIN certificate, the lease and the application.

Illustrative arithmetic, not a quotation

A Category A trading company in Kinondoni Municipality invoices TZS 2,832,000,000 in a year, inclusive of VAT at the VAT Act, Cap. 148, standard rate of 18%. The levy base is the VAT-exclusive figure: TZS 2,832,000,000 ÷ 1.18 = TZS 2,400,000,000. At the 0.3% ceiling the annual levy is TZS 7,200,000, billed as four quarterly instalments of TZS 1,800,000 where the council’s by-law adopts the full rate.

The same company opens a branch in Arusha City. If TZS 960,000,000 of the net turnover arises there, Arusha City Council bills TZS 2,880,000 and Kinondoni Municipal Council bills TZS 4,320,000; the company does not pay 0.3% of the whole to the head office’s council. The branch also carries its own Category A licence at the Schedule fee, which does not move with turnover.

The base is turnover, not profit: a company closing the year at a loss on TZS 2,400,000,000 of net sales still owes TZS 7,200,000.

What the council inspector asks for

Council inspections are unannounced. The officer asks first for the licence, which Cap. 208 requires to be displayed at the premises, and reads its category, premises and activity against what the business is actually doing. Then the TIN certificate, EFD receipts issued that day under TRA’s electronic fiscal device regulations, and the levy receipts for the latest quarter. Urban councils add the signboard-fee receipt, the inspection certificate under the Fire and Rescue Force Act 2007, workplace registration under the Occupational Health and Safety Act 2003 and, for food premises, the health permit.

An expired licence, a licence for a different activity, or missing levy receipts each produce a demand notice or a closure order the same day; by-law penalties then sit on top of the arrears.

Where this file stalls

• A company with one foreign shareholder applies at the council as Category B; the trade officer refuses the form and the BRELA application starts from zero.
• Renewal blocked because TRA will not issue the tax clearance: provisional-tax instalments are unpaid or the last return is unfiled.
• The licence-fee receipt is produced when the inspector asks for levy receipts; the council raises levy for every quarter since incorporation, with penalties.
• A non-citizen director’s Residence Permit Class A has lapsed by the renewal date.

What has moved recently

Council billing on the Mainland has moved from cashier receipts to the TAUSI revenue system rolled out by PO-RALG in place of LGRCIS; it issues a GePG control number for each licence fee, levy bill and signboard fee, and a payment made without a control number does not reach the council’s ledger. TRA now issues the tax clearance certificate electronically through the Taxpayer Portal with a verification code the licensing desk checks. This desk has not seen a Finance Act alter the 0.3% ceiling; confirm the live text of Cap. 290 on parliament.go.tz once.

Mandate-holders this file does not replace

The Ministry owns licensing policy and the Regulations under Cap. 208; BRELA issues Category A for it. The council, under PO-RALG, issues Category B and bills the levy, the signboard fee and its other by-law charges. TRA owns the TIN, the tax clearance, EFD compliance, VAT and the provisional-tax instalments that decide whether a clearance issues. Property tax has moved between TRA and the councils in successive Finance Acts; confirm who bills it this year. Zatra prepares and sequences these files; it does not issue a licence, assess a levy or sign a tax clearance.

What to confirm before you act

• Category: does foreign ownership or the activity place the licence at BRELA rather than the council?
• Reservation: is the activity on GN No. 487A of 2025 or under a sector Act?
• Fee: the live Schedule figure for the class as ORS quotes it, not a remembered number.
• Rate: the levy rate adopted in your council’s by-law, up to 0.3%, and its billing calendar.
• Clearance: that TRA will issue a tax clearance today, before the renewal date.
• Branches: one licence per premises, turnover apportioned to each council, lease in the company name.