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The Minister Issues new Tax Regulations in respect of Value Added Tax applicable to projects funded by Government, Foreign Government, Donor, Lender or Non-Governmental Organisation having agreement with the Government of the United Republic.

 

  1. The Value Added Tax (Exemption Management Procedure) Regulations  has provided for procedures to apply for exemption under section 6 of the VAT Act, Cap 148.The application for tax exemption shall be made to the Commissioner General in Form No. ITX264.01.E. The application shall also be made within a period of not less than sixty days before the commencement of the project and accompanied with the following:

 

  • An agreement with the Government which was approved by the Minister which binds the Government to grant such tax exemption;

 

  •  A contract between Government entity and contractor or level one sub-contractor with respect to project funded bin relation to a government funded project approved by the Minister;

 

  • Quotations, bill of quantities and list of goods and services to be exempted for the entire project;

 

  • Tentative description of the place of procurement of goods or services:

 

  •  In the case of import specify the country from which goods are acquired;

 

  •  In the case of local supply, the name, Tax Identification Number and Value Added Tax Registration Number of the supplier;

 

  • Proforma invoices, tentative analysis showing exact quantities, value of goods and services to be exempted with the corresponding amount of tax sought to be exempted;

 

  • List of contractors and level one sub-contractors who shall execute the project;

 

  • Physical location and address of where the project is carried out;

 

  • In the case of a contract which is required to be vetted by the Attorney General, a written confirmation from the Attorney General to signify that the contract was properly vetted and verified;

 

  • Written confirmation from the Ministry or Government entity executing the project that the project exists and the quoted values are tax exclusive;

 

  • Any other necessary information as may be required by the Commissioner.

 

2. The information above shall be submitted to the Permanent Secretary of the Ministry responsible with the project executed by the applicant.

 

3. Upon receipt of the application, the Permanent Secretary shall verify the application, approve and forward it to the Commissioner General

 

4. The application forwarded to the Commissioner General shall be accompanied with the declaration that the goods or services applied for exemption are solely for use in the project.

 

5. Where an application made under the regulation is approved, the Commissioner General shall proceed to issue an Exemption Certificate in Form No. ITX 281.01.E set

 

6. The Commissioner General shall issue the exemption certificate within thirty days from the date of receipt of the application.

 

7. The applicant, who has been issued with an Exemption Certificate, shall process utilization of the granted tax exemption by filling Form No. ITX265.01.E and submit the form to the respective Tanzania Revenue Authority’s Department or Regional office

 

8. In the case of importation of goods, the processing of the utilization of the granted exemption shall be made through the Commissioner for Customs and Excise in Form No. ITX ITX265.01.E.

 

9. The application made under this regulation, shall be accompanied with the following:

  • A copy of Exemption Certificate issued by the Commissioner General
  • In case of goods or services to be procured locally, proforma invoice from the supplier of goods or services; or
  • In case of importation of goods, final invoice, packing list, bill of lading and any other relevant importation document.

 

10. The Commissioner General shall, within a period of seven days from the date of receipt of the application, verify the application and communicate his decision to the applicant.

 

11. For purposes of effective monitoring of tax exemption granted, the applicant shall, submit to the Commissioner General a utilisation report of the granted tax exemption in Form No. ITX ITX282.01.E.

 

12. The report referred above shall be submitted to the Commissioner General within a period of thirty days after a lapse of every six months for a twelve months projects; and twelve months for projects with a maximum period of more than one year, from the date of approval of the tax exemption by the Commissioner General

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