Customs and Trade (Import Duties, Export Procedures, Trade Agreements)

For investors involved in importing materials or exporting products, Tanzania’s customs and trade rules significantly impact cost and logistics. Tanzania is part of the East African Community (EAC) Customs Union, which harmonizes external tariffs and eases intra-EAC trade. It’s also a member of SADC and has signed the AfCFTA. Understanding import duty rates, export requirements, and applicable trade agreements can help investors optimize supply chains and market access.

Import Duties (Customs Tariffs)

Tanzania applies the EAC Common External Tariff (CET) on imports from outside the EAC:

• The CET has a three-band structure: 0% for raw materials, capital goods, and specific essential goods; 10% for intermediate goods; 25% for finished consumer goods. However, since 2022 the EAC introduced a 4th band of 35% for certain “extra-sensitive” finished goods to protect local industries (e.g., certain textiles, iron products). Tanzania adopted this 35% rate on select items (like apparel, some steel) in July 2022 as part of EAC agreement.
• Many industrial inputs and machinery enter at 0% or 10%. For example, a textile factory importing cotton (a raw material) from a non-EAC country pays 0% duty, dyes or chemicals might be 10%, and finished garments would be 25% if imported.
• There are exceptions via duty remission schemes: approved manufacturers can get specific inputs at lower than CET rates if not available in the region. The EAC duty remission scheme allows Tanzania to charge less duty on inputs for manufacturing for a set period, benefiting those industries.
• Excise and VAT on imports: On top of import duty, applicable excise duty (for excisable goods like alcohol, tobacco, fuel) and 18% VAT are charged at import. For example, importing a car: 25% import duty (if not EAC origin), plus excise duty (0-30% depending on engine and ag​e), plus 18% VAT, plus minor 0.6% Destination Inspection Fee and 1.5% **Railway Development Levy (RDL). RDL is imposed on most imports to fund rail infrastructure (2% for most goods except exempted ones like pharma, fertilizers, and certain fuels.
• Import declaration: All imports require an Import Declaration Form (IDF) at a fee of 0.4% of CIF value (min USD 5,000). Some exemptions apply for East African Community trade.
• Pre-Arrival Declaration & Single Customs Territory (SCT): Tanzania (with other EAC states) has implemented SCT, meaning goods can be cleared at first point of entry in EAC. For instance, goods arriving at Dar es Salaam port for Uganda can be cleared through a single regional process. Traders can submit pre-arrival declarations to expedite clearance. Tanzania also uses an Electronic Cargo Tracking System for transit goods.
• Authorized Economic Operators (AEO): TRA grants AEO status to companies with good compliance, offering them faster clearance and fewer inspections.
• Import prohibitions/restrictions: Some goods are banned (e.g. plastic sachet spirits, certain hazardous chemicals) or need special permits (e.g. pharmaceuticals, firearms). Plastic bag import is banned as part of environmental law.

For investors, optimizing imports means:

• Make use of any duty exemptions (e.g., under TIC: capital goods can often be imported at 0% if you have Certificate of Incentives – effectively via the EAC duty remission scheme).
• Plan shipments and documentation to avoid port delays (Tanzania has improved port efficiency, but delays still add cost).
• If sourcing within EAC, no import duty applies (trade within EAC is duty-free on goods meeting Rules of Origin). For example, importing cement from Kenya or sugar from Uganda is duty-free if it meets origin criteria. However, note sometimes sensitive products even intra-EAC have safeguards.

Export Procedures

Tanzania encourages exports through simplification and some fiscal incentives:

• No export duties on most products. Tanzania generally does not impose export taxes, except on a few raw materials to encourage local processing. For instance, there is an export levy on raw hides of 10% to encourage leather industry locally, and recently on raw cashew nuts (export of raw cashews is either banned or taxed heavily to promote shelling in-country).
• Export permits are required for certain goods (minerals, wildlife products, certain crops under quota). For example, mineral exports need clearance by the Mining Commission and royalty payments.
• Export documentation: Exporters must lodge an export declaration with customs, and usually need: commercial invoice, packing list, any required certificates (e.g. Phytosanitary for agricultural goods, Certificate of Origin for preferential tariffs, etc.).
• Certificates of Origin: For exporting to EAC/SADC, get the appropriate origin document to let the importer enjoy duty-free or reduced duty. SADC trade, if rules of origin are met, is mostly duty-free (Tanzania implements SADC Trade Protocol – about 85% of tariff lines at 0% for SADC-origin goods). For instance, a Tanzanian textile exported to SADC with requisite local content pays 0% duty in South Africa.
• Trade Promotion: The Export Processing Zones and other schemes (Duty Drawback, Manufacturing Under Bond) help exporters import inputs duty/VAT-free for export production. The Duty Drawback scheme allows refund of import duty and VAT on inputs that are used to produce export​. This is useful for exporters outside EPZ.
• Free movement in EAC: Once goods clear customs in one EAC country, they can move to others with minimal border formalities (SCT framework). The One Stop Border Posts (OSBP) like at Namanga (Tanzania/Kenya) and Rusumo (Tanzania/Rwanda) streamline exit/entry of goods with joint inspection.
• Temporary Export/Import: Tanzania is party to international conventions that ease temporary importation (for trade fairs, etc.) with bond or ATA Carnet (though ATA Carnet acceptance is still developing).
• Exchange controls: Exports must be repatriated through banking channels. Tanzania requires exporters to bring back export proceeds (to curb capital flight). It’s not a tax, but a regulation: typically, within 90 days of export.

Trade Agreements and Market Access

Beyond EAC and SADC, Tanzanian exports benefit from:

• African Continental Free Trade Area (AfCFTA): Tanzania ratified AfCFTA in 202​2. Over time, this will reduce tariffs on trade with other African countries (outside EAC/SADC). Implementation is ongoing; investors can expect gradually improved access to West, North Africa markets without high tariffs.
• EU Everything but Arms (EBA): As a Least Developed Country (LDC), Tanzania has duty-free, quota-free access to the EU for almost all products (except arms). This is a unilateral EU scheme, not a reciprocal FTA. For example, Tanzanian coffee, spices, apparel enter EU at 0% duty under EBA.
• AGOA (African Growth and Opportunity Act): Tanzanian exports to the US enjoy duty-free access on a range of goods under AGOA (unilateral US preference), notably textiles and apparel if rules of origin are met (using regional fabric). AGOA is active until 2025 (and likely to be renewed). A Tanzanian garment factory exporting to the US can do so duty-free under AGOA, which is a big advantage (normally US tariffs on apparel are ~15%).
• UK Developing Countries Trading Scheme (DCTS): Post-Brexit, the UK continues similar preferences (Tanzania has duty-free access for most goods as an LDC).
• China and India Preferences: China has an LDC scheme granting duty-free access to 97% of tariff lines for Tanzanian goods. India offers a Duty-Free Tariff Preference (DFTP) scheme for LDCs where many products from Tanzania enter at low or zero duty.
• These trade preferences make Tanzania an attractive base for manufacturing for export because products can enter major markets (EU, US, China, India) with zero or reduced tariffs. Combining this with EPZ incentives (no taxes inside) can yield a highly competitive export cost structure.

Logistics and Infrastructure

From a trade facilitation perspective:

• Tanzania has major ports: Dar es Salaam, Tanga, Mtwara. Dar es Salaam port handles the majority of cargo and serves as a gateway for neighbours. The government has been upgrading Dar port to reduce dwell time.
• The Central Corridor (Dar to inland via rail and road) and the new Standard Gauge Railway (SGR) (under construction) will ease movement to Rwanda, DRC, etc. An investor moving goods regionally should track these improvements.
• One Stop Border Posts (OSBPs): As noted, OSBPs like at Namanga (TZ/Kenya) and Kabanga/Kobero (TZ/Burundi) mean one joint custom check instead of two separate ones, cutting clearance time​.
• Trade facilitation: Tanzania ratified the WTO Trade Facilitation Agreement. Steps like creation of the Tanzania Electronic Single Window (for all import/export permits in one system) are underway.

Export Processing and Bonded Warehouses

Manufacturing under bond (MUB) allows a factory to import inputs without duty/VAT, as long as final goods are exported. This is effectively similar to EPZ but for companies outside designated zones. One must provide a customs bond covering the duties which is discharged after proof of export.

Bonded warehouses are used by traders to store imports without paying duty until they decide to release to local market or re-export. Useful for re-export trade (e.g., a trader can import a large quantity, then re-export portions to neighbours duty-free from the bond).

Challenges

Investors should be mindful of:

• Customs Valuation: Tanzania follows WTO rules (transaction value). However, customs may sometimes uplift values if they suspect under-invoicing. It’s essential to have proper documentation and perhaps pre-valuation rulings for unique goods to avoid disputes.
• Non-tariff barriers: Sometimes, delays or administrative hurdles (licensing requirements, standards inspections) can be an issue. Engaging a good customs broker and staying updated on regulatory changes (e.g., import standards by TBS) is advisable.
• Corruption: The government has strived to reduce corruption in customs through automation and rotation of officers, but investors should maintain compliance to avoid any exposure. Reporting any solicitation through proper channels is encouraged by TRA.
• Trade remedies: On rare occasions, Tanzania (through EAC) may impose anti-dumping duties or safeguards on imports harming local industry. For example, a safeguard duty on imported sugar was applied to protect local producers. Businesses reliant on certain imports should watch EAC Gazette for such measures.

In summary, Tanzania’s trade regime offers:

• Reasonable import duty levels aligned with EAC partners (with incentives to reduce those for investors).
• Preferential access to key global markets.
• A push towards trade facilitation (single customs territory, OSBPs, digitization) which is improving the trading environment, although some bureaucratic processes remain.

For an investor, leveraging trade agreements can expand market reach, and using schemes like EPZ or duty remission can cut production costs. Being compliant and efficient in customs processes will avoid costly delays at ports or borders. With large projects like the SGR railway and port expansions, the outlook is that moving goods in and out of Tanzania will become faster and cheaper, further benefiting businesses engaged in trade.

For more information and inquiries reach us out through info@auditaxinternational.co.tz