The failure to expand the currently narrow tax base focuses policy on revenue collection rather than improving the business environment.
Lack of transparency on tax policy from year to year disallows businesses to conduct long-term strategic planning or anticipate planned reforms.
Getting Things Done
Improving approvals processes, other items.
Business Enabling Environment – Skilled Labor Shortages and Import/Export Inefficiencies
Several challenges—including skilled labor shortages, grossly inefficient import and export processes, and yearly, disproportionate business registration fee increases for foreign investors—combine to create an environment that make foreign investment more difficult.
U.S. investment interest in Tanzania is strong and well-established, but investment opportunities are being lost to firms that are disposed to unequal legal and ethical oversights in how they conduct their business.
Foreign companies have invested in Tanzania on the basis of legally binding agreements, which Parliament is about to overrule by legislation.
The draft local content policy changes the definition of a local company to 51% Tanzanian owned and gives incentives and preferences to local companies, adversely affecting foreign investment.
The draft Value Added Tax (VAT) Act will remove special tax reliefs currently in place, driving investors away from Tanzania and toward more favorable investment environments.