TANZANIA REVENUE AUTHORITY CUSTOMS AND EXCISE

1 TANZANIA REVENUE AUTHORITY TRA 1 TANZANIA REVENUE AUTHORITY Tax issues, including exemptions and compliance for NGOs Working in TANZANIA by Tiagi Deputy Commissioner CUSTOMS and EXCISE 31 May 2012 1 TANZANIA REVENUE AUTHORITY TRA Outlines Legal AUTHORITY Types of organizations involved Treasury Voucher System (TVC) Procedure to be followed Items qualifying for Tax exemption Items not qualifying for VAT exemptions Important Conditions Check list for approving exemption to NGOs Processing of Exemption 2 2 TANZANIA REVENUE AUTHORITY TRA 1. Legal AUTHORITY Five schedule of EACCMA Item 5 and 6 exempt Import Duty Government Notice number 197 & 200 of 2001 Exempt import Duty and EXCISE Duty Item 10 of the Third Schedule to the VAT Act, 1997 as amended by 2011 Finance Act.

2 Exempt Value Added Tax (VAT) 3 3 TANZANIA REVENUE AUTHORITY TRA 2. Types of Organizations involved Registered Non Religious Organizations Charitable community-based Other non-Profit driven organisation/institution Local International Registered Religious organisation 4 4 TANZANIA REVENUE AUTHORITY TRA 3. Treasury Voucher Systems and types of taxes to be exempted Tax exemptions to these Organizations follow Treasury Voucher and Cheque System (TVC) Whereby the Government pays taxes on behalf of these organizations, taxes involved are: Import Duty EXCISE Duty VAT on Importation VAT on domestic supplies 5 5 TANZANIA REVENUE AUTHORITY TRA Procedure of processing exemption cont. A: for imported Goods Importer is required to apply for exemption approval letter to the Commissioner for CUSTOMS and EXCISE attaching along with their application letter, a original Confirmation letter from District Commissioner, copies of importation documents, a copy of Certificate of Registration issued by the Ministry of Home Affairs, and a copy of TIN certificate.

3 It take one working days to get a letter of exemption approved by the Commissioner for CUSTOMS and EXCISE . The applicant after receiving a letter of exemption from the Commissioner for CUSTOMS , will be required to declare his/her imported goods to CUSTOMS through a Licensed CUSTOMS agent. 6 6 TANZANIA REVENUE AUTHORITY TRA Procedure of processing exemption A: for imported Goods CUSTOMS will process such declaration and issue assessment notice, assessment notice will be dispatched to the Treasury for a treasury cheque Upon receiving Treasury cheque, CUSTOMS will issue a release order to the importer to allow him/her take delivery of the goods from the port If goods have been properly declared, currently it is an average of five days from lodgment to release of goods.

4 7 7 TANZANIA REVENUE AUTHORITY TRA Procedure of processing exemption B: for domestic supplies The applicant will approach the Domestic REVENUE Tax Region where such organization operates and submit documents as listed in the check list (item 7 of this presentation) for approving exemption together with an Invoice, a Treasury Voucher will be prepared and sent to the Treasury for a Treasury Cheque Upon receiving Treasury Cheque, the applicant will be requested to complete form VAT 223/224 Upon approval of VAT form 223/224 the applicant will proceed to his/her supplier to take his/her VAT free goods. VAT Form 223/224 are approved within 24hours. 8 8 TANZANIA REVENUE AUTHORITY TRA 4. Items qualifying for tax exemption Goods or Services intended to be used solely by the Organisation or Institution subject to the following limitations: In the case of religious organisation, the advancement of religious Use by the organisation or institution in the excution of its functions and for relieving persons from the effects of natural calamities, hazards or disaster.

5 The development, maintenance or renovation by the organisation of projects relating to health, education, training, water supply, infrastructure or any other projects relating to advancement of community. 9 9 TANZANIA REVENUE AUTHORITY TRA 5. Exclusion Non religious organisations (NGO) will not be exempted from VAT on importation of or purchase of goods intended to be used by the organization. For example: A. Consumables such as: -Foodstuff -Beverages, -Spare parts, - Toilet Papers, -Detergent and other washing liquid -Parking material -Flowers B. Motor vehicles of ten years or above 10 10 TANZANIA REVENUE AUTHORITY TRA However, Importations or local purchases by Non Religious NGOs of household consumables for subsequent supply to: Orphanages, Day Care Centres, and Schools are eligible for VAT exemption.

6 Household consumables includes: food, Clothing and toiletries 11 11 TANZANIA REVENUE AUTHORITY TRA 6. Important conditions Goods shall not be disposed off in any manner without prior approval of Commissioner for CUSTOMS & EXCISE It is a requirement that District Commissioner s letter must be signed by the DC in person representation not allowed 12 12 TANZANIA REVENUE AUTHORITY TRA 7. Checklist for approving exemption to Religious Organization and NGOs An application letter to the Commissioner for CUSTOMS and EXCISE and attaching thereto: Commissioner letter to confirm the existence of the organisation of registration of the organisation is required, from the Registrar of Society (Ministry of home affairs) of Lading or Airway Bill or Road Consignment Note 4.

7 Invoice/Packing List or Donation Certificate Notice if any 13 13 TANZANIA REVENUE AUTHORITY TRA 8. PROCESSING OF EXEMPTION Application and Verification Stage Application Letter attached with relevant attachment Application letter with attachment are scrutinized Any query raised ? Conduct Physical Verification Query confirmed? Issue Approval Yes ON NO Yes 14 14 TANZANIA REVENUE AUTHORITY TRA PROCESSING OF EXEMPTION cont. Utilization Stage Application lodge the approval together With entries and other supporting documents at CSC Reject and inform applicant Yes Send Treasury Voucher Request To Treasury Yes No Receive Treasury Voucher from Treasury Exemption accepted Clear the goods 15 15 TANZANIA REVENUE AUTHORITY TRA 16 16