Tanzania WT/TPR/S/66
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III. TRADE POLICIES BY MEASURE
(1) INTRODUCTION
1. Tanzania has, since 1986, undertaken significant efforts to reform its economy and to create a
market driven environment attractive to foreign inve stment.  Its reforms in the trade sector have been
comprehensive;  exchange controls and quantitative restriction on imports have been eliminated apart
from those arising from the application of internatio nal conventions and those maintained for reasons
of health and security.  A programme of import inspection and valuation has been in force since 1999
under a contract awarded to COTECNA.
2. Export restrictions in almost all areas have been eliminated, as have foreign exchange
controls administered by the Bank of Tanzania.  The simple average tariff is 16.1%.  A new tariff
schedule was recently passed by the National Assembly, simplifying tariff rates into five bands with aminimum of zero rate tariff and a maximum of 25%.  The tariff structure is somewhat escalatory.  As
a consequence, domestic producers benefit from a high effective rate of protection and the signals to
the economy result in a misallocation of resources.
3. Tariff revenue constitutes a significant proportion of Tanzania’s government revenues.  There
is continual pressure to maintain revenue through high tariff rates;  further pressure to maintain hightariffs comes from the extensive granting of exem ptions for imports and the consequent revenue
forgone.  In fiscal year 1999, the rate of exemption from duties and taxes was 42% for mainland
Tanzania;  for Zanzibar, the rate was 33%.
4. Tanzania has no legislation in respect of anti-dumping, countervailing, and safeguard
measures although efforts are under way to expand the legislative infrastructure dealing with these
trade issues.  Legislation exists on competition policy, but implementation of its provisions has been
lagging.  In the area of intellectual property protection, Tanzania is making progress towards fullcompliance with WTO norms, although efforts are hampered by limited resources and continued
reliance on technical assistance.
(2) M
EASURES DIRECTLY AFFECTING IMPORTS
(i) Registration and documents
5. All importers must be registered according to the requirements of the Automated System for
Customs Data and Management (ASYCUDA), whic h Tanzania has implemented.  Currently, the
importers' tax identification number is being used for this purpose.  The Tanzanian Revenue Authority
(TRA) intends to develop a comprehensive identification system that will be used for customs, VAT,
and excise tax administration.
6. Any entity can obtain an importer registration if it has a business licence from the Registrar of
Companies.  Occasional importers can also be issued an identification number.
(ii) Inspection, customs valuation and customs clearance
7. The Tanzanian Revenue Authority has a preshipment inspection contract with COTECNA
Inspection S.A.  The contract currently in effect was signed between COTECNA and the TRA on
15 January 1999 and came into effect on 1 March 1999 for a period of two years.  Services providedby COTECNA include quality and quantity inspections;  customs valuation (for government
information purposes);  customs classification;  and import eligibility (labelling, expiry date, andWT/TPR/S/66 Trade Policy Review
Page 30
prohibited goods).  COTECNA is responsible for inspecting all imports of an f.o.b. value over
US$5,000.
8. The following goods are exempt from preshipment inspection and import declaration form1:
- gold, precious stones, precious metals, objects of art, explosives and pyrotechnic
products, implements of war, live animals, fresh chilled or frozen fruit and
vegetables, fish or meat or eggs, scrap metals, current newspapers and periodicals,ammunition, weapons, household and personal effects, including one used motor
vehicle for a returning resident, parcel post, commercial samples, and goods returned
to the country after repair;
- supplies imported for the use of diplomatic missions, and international organizations
to which Tanzania is a member;
- consignments with a pro forma invoice value equivalent in Tanzanian shillings to less
than US$5,000 or such other value as may be determined from time to time.
However, goods shipped in FCL (full loaded containers) are subject to PSI
irrespective of their individual value;
- goods entered for transit;
- goods originating/manufactured in CO MESA States subject to reciprocal
arrangements;
- imports of new motor vehicles by franchise holders;
- imports for projects that are funded by foreign governments and international
agencies and are exempted from customs duties and other taxes;
- imported gifts for the sole use of educational institutions, religious, charitable and
non-governmental organizations provided that the imports are exempted fromcustoms duties and other taxes;
- motor vehicles imported by public employees under the government loan
arrangement;  and
- emergency supplies, airlifted, whose value does not exceed US$10,000 per
consignment, as may be approved by the authority from time to time.
9. The Tanzanian authorities indicate that preshipment inspection may be phased out in about
two years, although there is a possibility that only the valuation process will be eliminated, while the
tax administration aspect will be maintained with COTECNA.
10. Preshipment inspection is carried out at the point of embarkation.  COTECNA generates
customs declaration forms based on the HS number.  Containers are sealed and can only be verifiedon a random basis in the presence of COTECNA.  Random inspection is conducted based on a
targeting profile that has been drawn up by the TRA based on the point of origin, description of
goods, and the name of the importer.
                                                     
1 COTECNA (1999).Tanzania WT/TPR/S/66
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11. A Clean Report of Findings (CRF) is issued by COTECNA to the importer in Tanzania to
assist in the clearance of the goods through Customs.  One or more of these documents is produced at
the request of the importer.  A Certified Final Invoice consists of a COTECNA security label affixed
to an original exporter’s final invoice by the Issuing Unit that conducted the PSI.  The Certified Final
Invoice must be submitted by the exporter together with the other final documents that are required by
banks for letter of credit negotiation/payment purposes.  In order to obtain a Certified Final Invoiceexporters must submit to the COTECNA Issuing Unit tw o copies of the final invoice, which includes:
(i) description of the goods with their origin and classification under the Harmonized Commodity
Description and Coding system;  (ii) weight and volu me;  (iii) mode of shipment;  (iv) port or airport
of loading (including the port of transhipment, if applicable);  (v) port or airport of discharge;  and (vi)
anticipated date of shipment.  A Non-Negotiable Report of Findings is issued by the Issuing Unit inthe country of export in circumstances where COTECNA for any reason cannot issue a Certified Final
Invoice.  This document is sent to the exporter and details the reason why a Certified Final Invoice
cannot be used.  In these cases COTECNA staff are available to advise exporters of the action
required to allow a Certified Final Invoice to be issued.  A Single Bill of Entry (SBE) is issued in
Tanzania by COTECNA to the importer to allow payment of  duties and taxes for clearance of goodsthrough Customs.  This document is issued once the importer has filled in an application for SBE.
The certified original SBE and the attached pay-in slip are required for clearance.
2
12. The definition of customs value used in Tanzania is the Brussels definition of value (BDV),
which corresponds to the "normal" price of the goods, i.e., the price which, it is considered, these
goods would have been able to fetch in the place and at the time they are declared, on full competition
terms, between a buyer and seller who are independent.  In accordance with the provisions of
Article 20 (special and differential treatment) of the Agreement on Implementation of Article VII ofthe General Agreement on Tariffs and Trade 1994, Tanzania has postponed the changeover to the
transaction value.  Tanzania has notified the WTO of its deferred application of Article VII.
Nonetheless, the TRA does not expect to be able to make the changeover to transaction value until
2001, and therefore will be seeking an additional extension for implementation of Article VII.
3  The
TRA has also asked for technical assistance in this area from JITAP.4
13. Table III.1 provides information on the minimum dutiable values for selected goods imported
into Tanzania.
14. Importers are not required to use the services of clearing agents.  Upon the receipt of a CRF
from COTECNA, the importer pays applicable duties  and taxes to any of the banks designated to
receive such payments.  Customs clearance can be completed within 24 hours when all paperwork isin order.  Pre-arrival clearance is also possible.  There are minimal wharfage charges, but no other
customs fees are levied.  If shipments are not picked up within 21 days of arrival customs storage
charges may apply, amounting to T Sh 10 per tonne per day.
                                                     
2 COTECNA (1999).
3 Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994,
Annex III, para. 1.
4 JITAP is the Joint Integrated Programme for Tanzania developed by ITC, UNCTAD and WTO with
Tanzanian officials.  JITAP's main objectives are to build a national capacity for understanding the changing
multilateral trading system and implications for Tanzania's trade;  to help conform Tanzania's policy andregulatory framework to seek maximum advantages from the multilateral trading system;  and to enhanceTanzania's export readiness in selected key areas.WT/TPR/S/66 Trade Policy Review
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Table III.1
Minimum dutiable values for selected items
(U.S. dollars)
Rice
Pakistan long grain white IRRI-6 15% broken 0.261 per kg.
Basmati rice ex. Pakistan 0.503 per kg.
Basmati rice ex. India 0.274 per kg.
Viet Nam long grain rice white 15% broken 0.265 per kg.
Wheat grain 0.203 per kg.
Wheat flower
Ex. Canada 0.255 per kg.
Ex. Holland 0.21 per kg.
Others 0.255 per kg.
Sugar 0.39 per kg.
Cooking oil
Crude 0.650 per kg.
Refined
"OKI" Brand 0.83 per kg.
"Viking" Brand 0.866 per kg.
"True Bake" Brand Dough Fat 0.75 per kg.
Others 0.866 per kg.
Soap
Laundry soap 0.8 per kg.
Toilet soap 1.1 per kg.
Khanga 1.4 per pair
Kitenge 0.73 per m2
Mitumba 0.55 per kg.
Bicycles
Avon Road Master and Hero Brand ex. India 33.0 per piece
Phoenix ex. China 45.0 per piece
BMX-Raja Brand ex. India 33.0 per piece
Beer
Beer from COMESA countries 0.48 per litre
Beer from Non-COMESA countries 0.85 per litre
Spirits
Whisky/Brandy, Gin/Vodka 4.0 per litre
Power One/Waragi 3.0 per litre
Wines 2.0 per litre
Tobacco
Cigarettes 21.0 per 1,000 sticks
Cutfill 4.0 per kg.
Lubricating oil 1.0 per kg.
Soft drinks (soda) 0.53 per litre
Mild steel 328 per tonne
Safety matches 14.0 per 1,000 boxes
Source:  Tanzania Revenue Authority, Customs & Excise Department, Ref. No. TRA/DC/DSM/C.10/1, 9 April 1999.
(iii) Import duties
(a) Nature and level of MFN duties
15. Tanzania grants at least most-favoured-nation (MFN) treatment to all countries.  Tanzania
does not apply any seasonal duties, tariff quotas, or variable levies.  Import duties are ad valorem .Tanzania WT/TPR/S/66
Page 33
Domestic taxes (VAT and excise taxes) are also levied on imports.  According to information
received by the Secretariat, in terms of levying taxes no distinction is made between domestic and
imported products.
16. The simple average of import duties calculated on Tanzania’s tariff schedule of 5,337 lines
(HS 8-digit level) is 16.1% (Chart III.1).
0510152025
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21Chart III.1
Applied MFN tariff rates, by HS section, 1999                                                   
Per cent
Source :   WTO Secretariat based on informatio n provided by the Tanzanian authorities.Average 1999 
(16.1%)
01 Live animals and prod.        
02 Vegetable products
03 Fats and oils      
04 Prepared food, etc.
05 Mineral products
06 Chemical and prod.07 Plastic and rubber
08 Hides and skins
09 Wood and articles
10 Pulp, paper, etc.
11 Textiles and articles
12 Footwear, headgear13 Articles of stones
14 Precious stones, etc.
15 Base metals and prod.
16 Machinery
17 Transport equipment
18 Precision instrument19 Arms and ammunition
20 Miscellaneous manuf.
21 Works of art, etc.
17. Tanzania undertook a comprehensive import duty reform in 1999.  At the recommendation of
technical assistance provided by the IMF, a new import duty structure was implemented in the
Finance Act of 1999.  The highest rate of 30% has been eliminated and a simplified five-tier structure
has been implemented with tariff rates of 0, 5, 10, 20 and 25% (Chart III.2).
18. Tanzania’s tariffs are widely dispersed with a coefficient of variation of 54.7% indicating that
general import duties vary from product to product.  The greatest tariff variations are for products inthe mining sector and for primary products.  The average tariff for finished goods is 18.3% while the
rates for primary and semi-processed goods is 13.3% (Table III.2).WT/TPR/S/66 Trade Policy Review
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0510152025303540
Duty free 0-5 >5-10 >10-15 >15-20 >20-25Per cent of total tariff lines Chart III.2
 Distribution of tariff rates, 1999
Source :   WTO Secretariat, calculations  based on information provided by the Tanzanian authorities.Tariff ranges (per cent)
Table III.2
Main features of the Tanzanian tariff schedule, 1999
(Per cent)
Simple average Range Standard deviationa Coefficient of
variationa
All tariff lines 16.1 0-25 8.8 54.7
By sectorb
Agriculture and fisheries 17.4 0-25 10.2 58.6
Mining 6.5 0-25 4.7 72.3
Industry 16.2 0-25 8.6 53.1
By degree of processing
Primary products 13.3 0-25 10.1 75.9
Semi-processed products 13.3 0-25 8.5 63.9
Finished goods 18.3 0-25 8.0 43.7
a The standard deviation measures the absolute dispersion of a distribution;  the coefficient of variation is a measure of relat ive
dispersion, defined as the standard deviation divided by the average.  Both are expressed as percentages.
b Based on ISIC classification.
Source : WTO calculations, based on data provided by the Tanzanian authorities.
19. The applied tariff structure is somewhat escalatory in nature (Chart III.3).  Many processed
products face a much higher effective rate of protection (ERP) along the processing chain providingsubstantial protection for higher-level processing activities, and generating higher costs for
consumers.Tanzania WT/TPR/S/66
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051015202530Chart III.3
Tariff escalation by 2-digit ISIC industry, 1999
Per cent
Unprocessed Semi-processed Fully processed
Source :  WTO Secretariat, based on information provided by the Tanzanian authorities.
(b) Other duties and taxes
20. The Value Added Tax Act of 1997 was passed to replace the sales tax system.  The VAT of
20% came into effect on 1 July 1998.  It was introduced as a broad-based tax with a minimum of
special treatment, but the number of special reliefs have increased since its introduction.  The VAT
included three schedules for special treatment.  Exports were zero-rated.  Food, health and education
supplies, water, and transport and financial services were also exempted.  Five special exemptions
were included in the original Act, but have since risen to 20.  The Tanzanian authorities indicated thatthey do not intend to grant any additional exemptions, but that those already implemented reflect the
need to provide treatment equivalent to that in neighbouring countries.
21. An excise tax is levied on a variety of domestic goods and equivalent imported products
through the Excise Tariff Ordinance.  The products effected are primarily petroleum, alcoholic and
non-alcoholic beverages, and tobacco products.
(c) Tariff preferences
22. Members of the Common Market for Eastern and Southern Africa (COMESA) benefit from
preferential tariff treatment.  A further reduction of tariffs by 80% was to have been in effect as ofWT/TPR/S/66 Trade Policy Review
Page 36
October 1996 in preparation for the creation of a free-trade area (FTA) by 31 October 2000.5
However, only five countries (Comoros Island s, Eritrea, Sudan, Uganda, and Zimbabwe) have
implemented these reductions.  Tanzania’s announ cement of its intention to withdraw from COMESA
suggests that any preferential treatment for COMESA members will be discontinued.
23. Upon  the completion of the Trade Protocol of the Southern African Development Community
(SADC), member countries will receive preferential tariff treatment.  Tariff reductions are still undernegotiation as are the phase-in periods for such preferences.
24. The East African Co-operation (EAC) objectives include harmonizing tariff and customs
regimes by the year 2000.
6  A preferential tariff is intended to prevail within the EAC and a Common
External Tariff (CET) is envisaged for 2004.
(d) Tariff and tax exemptions
25. Tanzania’s revenue from the collection of taxes and duties has been reduced dramatically by
the number and extent to which exemptions have been granted.  In the fiscal year ending June 1999,
total duties and taxes assessed were T Sh 385.7 billion.  Collections amounted to T Sh 223.3 billion.
An additional T Sh 162.3 billion was not collected, corresponding to a 42% rate of exemption.  In
fiscal year 1998, 48% of duty and tax collectable was exempted (Table III.3).
Table III.3
Distribution of tax exemptions by category, 1998-99(Per cent)
1998 1999
Category of exemption Tanzania Mainland Zanzibar Tanzania Mainland Zanzibar
Government institutions 15.0 20.0 18.0 16.1
Parastatal organizations 17.0 10.0 2.0 39.7
Religious institutions 6.0 1.0 6.0 0.8
Non-governmental organizations 12.0 6.0 26.0 0.8
Private companies and individuals 39.0 16.0 36.0 1.9
Tanzania Investment Centre (TIC) 11.0 n.a. 12.0 n.a.
Investment Promotion Centre (ZIPA) n.a. 47.0 n.a. 40.7
n.a. Not applicable.
Source : Tanzanian authorities.
26. The rate of exemption on duties and taxes in Zanzibar for fiscal year 1999 was 32.9%.  The
total duties and taxes assessed were T Sh 36.2 billion while collections amounted to T Sh 24.3 billion.
In fiscal year 1998, the rate of exemption in Zanzibar was 27%.
27. Exemptions from the application of the VAT have also been significant.  In fiscal year ending
June 1999, 31% of all collectible VAT was granted exemptions.
28. The Government intends to reduce the granting of exemptions.  The Import Duty Act has
been amended to centralize the certification of exempt status in the Income Tax Department of the
TRA:  the responsible Minister will no longer have sole discretion in the granting of exemptions.
                                                     
5 Kyodo News International, Inc. , 31 May 1999;  and Financial Times , 27 May 1999.
6 Dun & Bradstreet (1998).Tanzania WT/TPR/S/66
Page 37
Exemptions may only be granted with the recommendation of the TRA, and TRA officials indicate
that they will rarely grant these requests.
29. A system of duty drawbacks is in place for manufacturers who import components that are
eventually exported in a finished product;  however, the system does not work very well.  Initially, the
Board of External Trade was responsible for administering the drawback programme, but authority
has been delegated to the Tanzania Revenue Authority.  The TRA has requested technical assistancein order to implement a drawback system effectively.
(iv) Rules of origin
30. Rules of origin exist, for preferential treatm ent purposes, in the trade agreements to which
Tanzania is a signatory.
31. Tanzania is currently subject to COMESA rules of  origin (Chapter II(5)(iii)(a)).  However, in
July 1999 Tanzania announced its inte ntion to withdraw from COMESA.
32. In order for Tanzania to benefit from its membership in the Southern African Development
Community (SADC) Treaty Tanzania may also have to abide by SADC rules of origin.  While SADC
members have negotiated a Trade Protocol, signed in August 1996 by the Heads of State or
Government, negotiations are currently under way with respect to tariff liberalization and related rules
of origin issues with which member countries will have to abide.
33. In March 1996, Tanzania, Kenya, and Uganda established the Tripartite Commission for East
African Co-operation (EAC).  The EAC's objectives include harmonizing tariff and customs regimes
by the year 2000.
7  A preferential tariff is intended to prevail within the EAC, and a Common External
Tariff (CET) is envisaged for 2004.  While it may be assumed that rules of origin will be established
as part of this integration effort, no specific information about the technical details is currently
available.
34. In the framework of the Lomé Convention, complete processing (goods entirely produced on
the spot) or adequate processing (change of tariff position) of a product confers upon it as place of
origin the ACP country in which the processing took place.
(v) Anti-dumping, countervailing and safeguard measures
35. Tanzania does not currently have any national legislation on anti-dumping, countervailing,
and safeguards measures although officials indicate that the Government intends to introduce
measures in the future.
(vi) Prohibitions, quantitative restrictions, and licensing
36. Tanzania maintains a very limited number of import restrictions.  The restrictions currently in
force are retained for reasons of health, security, or morals and concern products such as arms andammunition, explosives, military equipment, and narcotic drugs.  Items that require a specific import
licence, for health reasons, from the Ministry of Agriculture include livestock, meat and edible offal,
live trees and other plants, edible fruit, nuts, and vegetables, roots and tubers.  No information was
available to the Secretariat on the functioning of the import licensing system.
37. Import controls are administered by the Bank of Tanzania.
                                                     
7 Dun & Bradstreet (1998).WT/TPR/S/66 Trade Policy Review
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(vii) Standards and ecological and other technical requirements
(a) Standards, testing, and certification
38. The Tanzania Bureau of Standards (TBS) is the agency responsible for standards issues.  The
TBS is a parastatal entity operating under the Ministry of Industry and Trade.  It has its own
integrated testing facility, which is currently in the process of being accredited to ISO 25 standards.
The TBS operates under budget from the Government and whatever revenue it can generate for theservices it provides;  it is permitted to operate as a profit-making enterprise.  The TBS is a member of
the International Organization for Standardization (I SO) as well as the Codex Alimentarius of the
United Nations Food and Agriculture Organization (FAO).
39. The TBS has been notified to the WTO as the Contact Point (Point of Enquiry) for issues
related to the Agreement on Technical Barriers to Trade (Article 10.1) and for the Agreement on theApplication of Sanitary and Phytosanitary Measures (Annex B, para. 3).  TBS has also notified its
acceptance of the Code of Good Practice for the Preparation, Adoption, and Application of Standards.
40. There are 572 published Tanzanian standards.  Of these, 105 are adopted from ISO/IEC
standards and approximately 400 are voluntary standards.  The TBS estimates that 50 standards might
be introduced in Tanzania each year.  Whenever there is an existing international standard or technicalregulation, it is adopted in totality.  Standards are typically adopted from either European or
international norms.
8  The British Pharmacopoeia is used for pharmaceutical products.
41. The TBS issues a Standard Mark of Quality available equally to domestic and foreign
producers.
42. Tanzanian standards requirements do not distinguish between imported and domestically
produced goods.  Imported products covered under the list of compulsory standards as per
Government Notice No. 56 of 18 May 1984 and No. 195 of 30 August 1996 are to conform torespective Tanzanian standards.  Domestic products and imported products must meet Tanzanian
standards of conformity.  Upon conformity, Tanzanian products are issued a "TBS" mark certificate,
and imports are issued a batch certificate.  In implementing compulsory batch certification of imports,
TBS recognizes foreign national standards bodies.  A certificate of compliance must accompany every
import consignment.  The certificate fee is 0.2% of the cost and freight.  If there is no certificate, theTRA will hold the goods until they have been tested (only to parameters) and conformity is
confirmed.
43. TBS fully recognizes testing procedures performed by its counterpart organizations in
exporting countries.  TBS is currently negotiating it s first formal Mutual R ecognition Agreement with
the standards body of Indonesia.
44. TBS generally does not test exports unless specifically requested by the exporter.
45. Labelling and packaging requirements are not harmonized in Tanzania.  Currently, the
following institutions regulate different products:  the Tanzania Bureau of Standards (TBS), the
Tanzania Pesticide Research Institute, the Pharmacy Board, and the National Food Control
Commission.
                                                     
8 Technical Standards, Health and Safety Regulations, Labelling, Ministry of Industry and Trade, Ref.
No. C.DB 289/586/01, 19 October 1999.Tanzania WT/TPR/S/66
Page 39
(b) Sanitary and phytosanitary standards
46. The Ministry of Agriculture and Cooperatives is responsible for the inspection and
certification of all plants and plant products (propagative matter, seed, seedlings) in Tanzania.  The
Plant Protection Division is charged with enforcement of the Plant Protection Act of 1997.
Phytosanitary regulations are grouped under three categories, depending on the distribution and type
of pests:  permitted under conditions;  quarantinable;  and prohibited.  Domestic products are notsubject to phytosanitary certification unless there is a localized pest outbreak in a certain region.  All
imports are subject to inspection and certification.
47. The Ministry of Agriculture and Cooperative's Zoo-Sanitary Inspectory is responsible for
inspection and certification procedures relating to health and sanitary regulations under the Animal
Ordinance Cap. 156.  Table III.4 provides detail on the products that are affected by these regulations.Domestic and imported products are treated identically, although importers must receive an import
permit and an international zoosanitary certificate.
Table III.4
Health and sanitary regulations
Regulations apply to animals, (domestic and wild), fish, bees, and animal products
Destined for industrial use
– Raw hides, and skins, hooves, fur, wool, hair, bristles, feathers, horns, bones and ground-up bones, blood, casings, fertiliz er of
animal origin, and guano, as well as milk products and hens intended for industrial purposes.
Destined for human consumption
– Egg products, milk products, and honey.
Destined for pharmaceutical use
– Organs, glands, organic animal tissues and fluids to be used in pharmaceutical products.
Destined for use in animal feeding
– Meat meal, fish meal, liver meal, bone meal, feather meal, scraps of pork fast, milk products and others intended for use in
animal feeding.
Biological and pathological products
– Biological reagents for use in the diagnosis of certain diseases.– Sera for use in the prevention and treatment of certain diseases.
– Inactive or modified vaccines for use in the preventive vaccination against certain diseases.
– Microbial genetic material.
Source: Technical Standards, Health and Safety Regulations, Labelling, Ministry of Industry and Trade, Ref. No. C.DB
289/586/01, 19 October 1999.
(viii) Government procurement
48. Tanzania is neither an observer in nor signat ory to the Uruguay Round Plurilateral Agreement
on Government Procurement.  The Ministry of Finance, through its Financial Order Part III Fifth
Edition, sets out regulations related to government procurement.  Government procurementregulations are currently being reviewed by the Tanzanian Government and new legislation and
regulations may be forthcoming.
49. The Ministry of Works is responsible for government procurement related primarily to road
and building construction.  Most ministries are responsible for their own procurements, but the
Ministry of Works also acts as a consultant to other Tanzanian ministries.
50. A system of tender boards has been established to review government procurement.  The
Central Tender Board (CTB) is responsible for procurements of US$3 million or higher.  PermanentWT/TPR/S/66 Trade Policy Review
Page 40
secretaries from government ministries sit on the CTB.  The National Tender Committee reviews
procurements between US$1-3 million and regional tender boards have authority for procurements of
less than US$1 million.
51. Depending on the nature of a contract, international competitive bidding or local competitive
bidding is employed.  Because most of the major projects in Tanzania are typically funded by donor
institutions, the procurement regulations of those organizations are usually followed.  There is nofinancial threshold to identify when international or  local competitive bidding should be used;  often,
the decision is based on a subjective assessment of whether the technical expertise to satisfy the
contract exists locally.
52. Bids are accepted from entities that are on an open list of prequalifiers.  The relevant ministry
is charged with evaluating the qualifications of bidders and notifying them of their eligibility to bid onspecific contracts.  Typically, the lowest bid is successful, although a secondary technical evaluation
may be conducted, depending on the nature of the contract.  Single tendering is permitted for
emergency situations.  A preferential margin of 7.5% is given to domestic enterprises.
53. State trading enterprises are required to follow the same procurement practices.
54. Treasury Circular No. 3 of 1990 sets out the procurement authorization and limits that have
been specifically established for a World Bank funded Integrated Roads Project (IRP).  These limits
have been outlined for the duration of the project, and for all procurement related to it (Table III.5).
Table III.5
Procurement limits related to integrated roads project(US$ million)
Tender authority authorization Works Goods Services
Regional tender boards < 1 < 0.5 < 0.25
IRP-National Committee < 5 < 3 < 1
Central Tender Board ≥ 5 ≥ 3 ≥ 1
Source :T r e a s u r y .
55. Effective 1 July 1997, the Ministry of Finance increased the powers of local purchase outlined
in the stores Regulations 12 of Financial Order Part III Fifth Edition.  Table III.6 provides details onpurchasing authority of accounting officers.
9
Table III.6
Accounting officers purchasing authority
(T Sh million)
All Principal Secretariesa≤ 2.0
All Regional Administrative Secretaries ≤ 2.0
Director of Supplies and Service (Government Stores) ≤ 3.5
Government Printer ≤ 3.5
Officer in Charge, Central Veterinary Stores ≤ 3.5
Senior Supplies Officer, Central Maji Stores, Ministry of Water ≤ 2.5
All other Accounting Officers ≤ 2.0
Regional Tender Boards for Purchasing of Services and Construction Works ≤ 40.0
a According to the Permanent Secretary for the Ministry of Works, each PS has authority for up to US$250,000 per contract.
Source: Tanzanian Ministry of Works.
                                                     
9 Treasury Circular No. 1 of 1997, Ministry of Finance, Ref. No. TY/F/40/5/5, 23 June 1997.Tanzania WT/TPR/S/66
Page 41
(ix) Local-content requirements
56. The authorities indicate that Tanzania does not have any local-content requirements.
(3) MEASURES DIRECTLY AFFECTING EXPORTS
57. As a part of Tanzania’s trade liberalization efforts, foreign exchange controls were gradually
relaxed and the Exchange Control Ordinance was replaced by the Foreign Exchange Act of 1992.
The new Act opened up the external sector to market forces of demand and supply and rendered therole of the Bank of Tanzania (BOT), in controllin g the operations of the external sector in terms of
documentation and approvals, unnecessary.  Accordingly, as controls on foreign exchange were
relaxed, most BOT functions were delegated to the Tanzania Revenue Authority.  Export
liberalization measures since 1996 have included the removal of export registration requirements,
removal of Board of External Trade export licence requirements, and the abolition of surrenderrequirements on export proceeds.  These and other measures were intended to make export processes
shorter, easier, and less cumbersome.
(i) Regulations
10
58. At the preshipment stage, all exports must be declared on the Single Bill of Entry (SBE)
issued by the Tanzania Revenue Authority Customs Department.  The SBE, which is also used forimportation, captures important information including monitoring of exports, and enables the TRA to
provide trade statistics to the Bank of Tanzania and other trade statistics users.
59. An exporter must also complete a sales invoice describing the types of goods to be exported,
quantity, unit price, total value and volume of export.
60. Exports from Tanzania must be paid for in foreign currency unless otherwise permitted by the
BOT.  Exporters are urged to use commercial banks as much as possible through the establishment of
letters of credit.  With some border trade, payments can be received directly by the exporter andcredited in a foreign currency account with a comm ercial bank or changed into local currency.  Funds
from such foreign currency accounts can be drawn upon by the holder freely for any use, without
prior approval of BOT.  Through currency convertibility arrangements within the EAC countries
(Tanzania, Kenya, and Uganda), payment for export s can also be received in the importer’s currency
and converted back into the exporter’s local currency through a commercial bank.
61. The BOT sets a specific time limit for the realization of export proceeds.  Amounts
representing the full export value of goods should be realized by the exporter within 90 days from the
date of export for agricultural and natural resources exports and up to 180 days for manufactured
goods.  If a longer credit period is required, the e xporter must apply to a commercial bank registered
in Tanzania in advance.  The exporter should state the nature of the goods, contract value, nature andlocation of the foreign market, name and address of the foreign buyer, security to be obtained in case
of the deferred receivables and consideration in which longer credit is proposed to be given.
Exporters are required to give details of the whereabouts and reasons for delays in export proceeds
realization.  All the reasons given should be properly documented.  The banks should satisfy
themselves as to when the proceeds will be realized  within a specific time period.  In case an exporter
fails to receive export proceeds on time, commercial banks should contact the exporter to arrange for
immediate realization of the amount outstanding.  Therefore, exporters are advised to process and
receive export proceeds through a single commercial bank to facilitate document handling and
                                                     
10 Bank of Tanzania (1998).WT/TPR/S/66 Trade Policy Review
Page 42
payment confirmation.  To minimize or eliminate delays in receiving payments, exporters are advised
to insist on advance payment or establishment of irrevocable and confirmed letters of credit.
62. Export of certain goods that do not involve any payment in foreign exchange, such as
personal effects, gifts, goods for repair, diplomatic cargo, souvenirs, trade samples and goods for
display in foreign exhibitions, are handled by TRA’s Customs Department subject to completion of an
SBE.
63. Consideration for remittances to settle claims by overseas buyers of exports for short
shipment, inferior quality, non-fulfilment of quality, and penalty for late shipment are handled by
commercial banks without prior approval of the BOT.   Settlement of such claims should be submitted
to commercial banks with appropriate documentary ev idence to the satisfaction of the banks that the
claims are genuine.
64. Application for remittances of trade discounts, commission agency fees, and any other fees
chargeable for export services provided by fore igners are considered by commercial banks.  Each
application is considered on its own merits and on a commercial basis without the approval of the
BOT.
65. Exporters are to base their quotations, as far as possible, on international market prices,
depending on the quality of their product.  Customs authorities are instructed to confirm the unit
prices and value of goods to be exported to avoid low quotations and under-invoicing.
(ii) Export duties and taxes
66. In 1996, Tanzania reinstated an export tax on non-traditional products and minerals at a rate
of 2%, for revenue purposes and enhancement.  However, as a result of further liberalization of the
trade sector, the Tanzanian Government no longer imposes any export duties or taxes.
67. Voluntary crop boards such as the Cotton Board and the Cashew Nuts Development Fund
levy a fee of 1-2% on their members’ exports to fi nance research, extension services, and training.
(iii) Prohibitions, licences, and other measures restricting exports
68. Ministerial clearance or permits are required for goods that the Government wishes to monitor
for the purpose of preserving national heritage and environment.  The list includes natural resources,
wildlife, forestry, marine products, and foodstuffs.
69. Since June 1998, export restrictions in the agriculture sector have been in place for white
maize, rice, cereals, and beans;  these are due to the precarious food supply situation brought about by
the ongoing drought conditions in Tanzania.  Crop boards also enforce quality standards before
commodities can be exported.  Export restrictions are currently in effect for unprocessed fish
products.  Furthermore, exports of fish products are subject to landing requirements in order to securehealth certificates.  In the forestry sector, only teak and pau rosa logs can be exported.  Other species
must undergo some value added processing before exports can take place.  There is a ban on charcoal
exports.
(iv) Export subsidies
70. According to authorities, Tanzania does not subsidize any exports of goods or services.Tanzania WT/TPR/S/66
Page 43
(v) Duty and tax concessions
71. The Zanzibar Free Trade Economic Zones Authority (ZAFREZA) provides benefits to
enterprises that export 80% or more of their output.  Incentives under the EPZs include tax holidays,
exemptions from import duties, and other tax benefits (Chapter II(4)(v)).
(vi) Export promotion, financing, and assistance
72. Tanzania’s financial support for exporters is minimal.  The National Bank of Commerce – a
parastatal scheduled to be privatized – offers some export finance facilities at different stages of
export operations, but it is viewed to be insufficient to encourage export activities.
73. Export promotion efforts, to the limited extent they exist, are carried out by industry
associations such as the Confederation of Tanzania Industries (CTI), and the Tanzania Chamber of
Commerce, Industries and Agriculture (TTCIA).  These and other similar organizations are receiving,or are targeted for, foreign technical assistance from agencies such as UNIDO, UNDP, UNCTAD and
the ITC.
(4) O
THER MEASURES AFFECTING PRODUCTION AND TRADE
(i) State trading, state enterprises and privatization
74. The Government of Tanzania does not reserve any exclusive trade privileges to state-owned
enterprises.
75. In 1992, the Tanzanian Government issued its Policy Statement on Parastatal Reform, which
set the direction for an ambitious privatization and reform programme.  At the end of the process,
government officials indicate that all parastatals will be privatized or liquidated.  Prior to the
commencement of the privatization process, approximately 90% of Tanzania’s GDP was in the
parastatal sector.
76. The Tanzania Parastatal Sector Reform Commissi on (PSRC) is the privatization agency of the
Tanzanian Government.  Created in 1992, it has been charged with divestiture of approximately
400 state-owned enterprises.  The PSRC is also responsible for overseeing improvements in the
efficiency of parastatals that remain in the public sector, either transitionally or in the longer term.
The PSRC acts as the principal advisor to the Tanzanian Government on policy and legislation
affecting parastatal business enterprises.  Although the term of the PSRC is scheduled to come to anend in 1999, Parliament is already considering legislation that would further extend the PSRC’s
mandate.  To date, more than half of Tanzania’s parastatals have been either privatized or liquidated
(Table III.7).  The PSRC estimates that about 30% of Tanzania’s GDP has been privatized.
77. Privatization in Tanzania has been carried out with support from the World Bank, which has
provided funding as well as technical assistance.  Tanzanian officials are currently in discussions withthe World Bank for further support.  For example, PSRC estimates that US$18-20 million will be
needed for the creation of a regulatory framework that would allow for the privatization of electricity
and other utilities.
78. As part of the privatization effort, the Dar es Salaam Stock Exchange was established in 1996
and commenced operations in April 1998.
79. Major divestitures in the utility and financial services sectors are forthcoming.  Plans are
under way that will see the privatization of Water Supply (DAWASA) and the TanzaniaWT/TPR/S/66 Trade Policy Review
Page 44
Telecommunication Company (TTCL).  Plans are also proceeding for the privatization of the National
Bank of Commerce, the National Microfinance Bank, and the National Insurance Company.
Privatization of the pension system, which includes the National Provident Fund and the Parastatal
Pension Fund, is not currently in the pipeline, but is anticipated in the future.
80. The Loan and Advances Realization Trust (LART) is charged with the collection of
non-performing assets of the parastatal sector.  The LART is scheduled to continue in existence until2002, but the disposition of these non-performing assets has not yet been determined.  The
Government of Tanzania also plans for the creation of a Privatization Trust, which will warehouse
shares from completed privatizations until they can be sold in the market without unduly affecting
share value.  This Privatization Trust will be managed by a merchant bank, operating independently of
the Government.
81. Tanzanian does not restrict any foreign direct investment (FDI) in the privatization process.
Table III.7
Divestment of parastatals by mid-1998
Divestiture method 1992a1993/1994 1994/95 1995/96 1996/97 1997/98
S h a r e . .. . . .. . . .. .
S a l e / a s s e t . .. . . .. . . .. .
S a l e 51 8 1 12 4 2 52 9
Liquidation 0 16 17 9 11 6
Closure 4 5 1 7 1 0
Lease 2 8 5 7 1 0
Perfomance/
Management contracts01 20 20
R e s t r u c t u r i n g . .. . . .. . . .2
F l o t a t i o n . .. . . .. . . .1
T o t a l 1 14 8 3 64 3 4 03 8
Under LART 0 11 9 0 0 14
T o t a l  d i v e s t e d  b y  P S R C 1 15 9 4 54 3 4 05 2
Non-core assets .. .. .. .. .. 9
.. Not available.
a Mostly by the relevant ministries directly before formation of PSRC.
b Includes 14 companies ceded to LART during the year.
Source: Presidential Parastatal Sector Reform Commission (1998), 1997/1998 Review and the Action Plan for 1998/1999 ,
August.
(ii) Subsidies and other forms of production assistance
82. Provisions of the Tanzania Investment Act, the Zanzibar Investment Act, and other legislation
pertaining to foreign investment offer tariff and tax exemptions for investors meeting certain
requirements and thresholds of investment (Chapter II(4)(i)-(v)).
83. The Zanzibar Free Trade Economic Zones Au thority (ZAFREZA) operates three Export
Processing Zones (EPZ), which benefit from tax and tariff concessions as well as the provision of
infrastructure, such as electricity, water, and telecommunications.Tanzania WT/TPR/S/66
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(iii) Price regulation and competition policy
84. Competition policy in Tanzania is regulated by the Fair Trade Practices Act of 1994.  The Act
is intended to encourage competition in the economy by prohibiting restrictive trade practices,
regulating monopolies, concentrations of economic power and prices, and to protect the consumer.
The Act calls for the creation of a Trade Practices Commissioner and a Trade Practices Tribunal to
implement the provisions of the legislation.
85. Currently, cases are being dealt with informally by the Commissioner, primarily because
regulations and procedures called for in the Act have not yet been implemented.
86. Foreign direct investment is subject to Tanzania's competition law although the Act does not
apply to imports.
(iv) Measures for the protection of intellectual property rights
87. The Registrar of Companies administers Tanzania's intellectual property rights protection and
is governed by the Patents Act of 1987, the Trade and Service Marks Act of 1986, and the recently
enacted Copyright Act of 1999.11
88. Tanzania is a member of various international organizations that deal with intellectual
property rights protection:  the World Intellectual Property Organization12;  the International Union
for the Protection of Industrial Property (Paris Union), founded by the Paris Convention for the
Protection of Industrial Property;  and the International Union for the Protection of Literary and
Artistic Works (Berne Union), founded by the Berne Convention for the Protection of Literary and
Artistic Works.  Tanzania became a member of the Patent Cooperation Treaty on 14 September 1999,
and is a signatory to the Harare Protocol on Pate nts and Industrial Designs, the Banjul Protocol on
Trademarks, and the Madrid Agreement on Trademarks.
89. Tanzania is a member of the African Regi onal Industrial Property Organization (ARIPO,
Harare), which grants patents and design registrations effective in the 14 ARIPO member countries
(Botswana, Gambia, Ghana, Kenya, Lesotho, Malawi, Sierra Leone, Somalia, Sudan, Swaziland,
Uganda, United Republic of Tanzania, Zambia, Zimbabwe).  Patents applications submitted in
Tanzania are referred to ARIPO for preliminary and substantive searches.  Although Tanzania can
grant patents, it has never done so, although authorities in Tanzania have registered patents grantedelsewhere.
90. Under Tanzanian intellectual property law, protection for patents is granted for ten years, and
can be renewed for two terms of five years each;  trade and service marks protection is for ten years,
renewable for seven-year periods.  Copyright protection is for the life of the author plus 50 years.  In
the case of joint authorship, protection extends through the life of the surviving author plus 50 years.Anonymously published works and audio-visual works are protected for 50 years from the date of
publication.  Applied art works are protected for a period of 25 years from the creation of the work.
91. Tanzanian authorities report that during the period 1995-99, 61 patents and 3,813 trade marks
were registered.  From 1994 to 1999, 984 service marks were registered.
13
                                                     
11 The Copyright Act was drafted with the technical assistance of WIPO and is WTO-consistent.
12 Tanzania became a member on 30 December 1983.
13 As at 5 August 1999.WT/TPR/S/66 Trade Policy Review
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92. Tanzania does not currently have the resources to enforce its intellectual property laws but is
moving toward active enforcement both domestically and at the border.  It is currently working with
the Copyright Collective Management Association on enforcement issues.  Legal enforcement is
possible through direct submission to Tanzanian courts.  During 1995-99, only 17 opposition
proceedings were recorded.  Tanzania intends to establish a Commercial Court, which will have
authority to deal with a variety of commercial matters, including intellectual property issues, and toimpose penalties for actions inconsistent with Tanzanian law.
93. Tanzania has received technical assistance from WIPO and other entities with respect to
intellectual property and anticipates the need for continued assistance in order to meet its WTO
obligations.  Tanzania is currently revising its legislation with respect to patents and trade marks in
preparation for meeting its WTO commitment by 2006.  It has also received recommendations fromWIPO regarding implementation of protection related to geographical markings of origin as well as
integrated circuits.