Legal AlertNews Doing Business in Tanzania: Updated Legal and Regulatory Compliance

Between 09 th July and 28 th September 2021, the President of the United Republic of Tanzania assented into law various amendments of laws that were passed by the Parliament. The Amendments makes numerous changes on various laws to curter for among others, compliance, and regulatory business environment in Tanzania. This update, therefore, reviews some of the amended laws and key amendments brought about to highlight necessary general legal information to our esteemed clients.

THE WRITTEN LAWS (MISCELLANEOUS AMENDMENTS) (NO. 2) ACT, 2021 (ACT NO. 4 OF 2021)

This law has amended different 14 laws. These include the Electronic and Postal Communication Act, Cap. 306, the Environmental Management Act, (Cap. 191), Fair Competition Act, Cap. 285, the Insurance Act, (Cap. 394), the Local Government (District Authorities) Act, (Cap. 287), the Local Government Finances Act, (Cap. 290), the Local Government (Urban Authorities) Act, (Cap. 288), the Natural Wealth and Resources (Permanent Sovereignty) Act, (Cap. 449 ), the Natural Wealth and Resources Contracts (Review and Re-Negotiation of Unconscionable Terms) Act, (Cap. 450), the Petroleum Act, (Cap. 392), the Railways Act, (Cap. 167), the Roads Act, (Cap. 167) and Public Private Partnership Act, (Cap. 103) respectively. In principle, these amendments are meant to provide for smooth and expeditious implementation of agreements entered by the Government that provides for the execution of special arrangements, and to create favourable conditions for the performance of Government projects.

Further, the law amends section 16 of the Government Proceedings Act, Cap. 5, in order to secure investors or parties to the agreements by allowing execution, attachment or similar process against the property which is connected with a financial obligation arising out of, or in connection with an agreement involving the government.

THE WRITTEN LAWS (MISCELLANEOUS AMENDMENTS) (NO. 3) ACT, 2021 (ACT NO. 5 OF 2021)

came into effect on 28th September 2021 by amending 11 laws namely; the Advocates Act, Cap. 341, the Births and Deaths Registration Act, Cap. 108, the Business Names (Registration) Act, Cap 213, the Civil Aviation Act, Cap. 80, the Companies Act, Cap. 212, the Environmental Management Act, Cap. 191, the Land Disputes Courts Act, Cap. 216, the Magistrates’ Courts Act, Cap. 11, the National Assembly (Administration) Act, Cap. 115, the Tourism Act, Cap. 65 and the Trade and Service Marks Act, Cap. 326.

Advocates Act, Cap. 341 – The Amendment adds a new Section 4A, 4B and 4C that establishes and constitutes Advocates Ethics Committees at the Regional level (Regional Advocates Committee) in each region in Tanzania. The aim of establishing the Regional Advocates Committee is to facilitate access to justice and to enable citizens who have complaints against Advocates for ethical misconduct or other matters to address such complaints at the Regional level instead of lodging the same to the Advocates Ethics Committee at the national level.

Appeals from the Regional Advocates Ethics Committee shall be lodged to the National Advocates Ethics Committee.

Births and Deaths Registration Act, Cap. 108: The amendment has two folds, one is to add a new S. 17(2) and 17(3) to clearly define people who can collect the Dearth Certificate of the deceased. These have been limited to either be the surviving spouse or child, or if for any reason the spouse or child is incapable of collecting the certificate, next of kin of the deceased. Another amendment is the addition of a new S. 19A to establish the Electronic Register of Births and death but also promoting cooperation, coordination, integration and interoperability with other identification and registration systems (such as NIDA) in Tanzania.

Business Names (Registration) Act, Cap 213, is also amended under section 6 to require those registering business names should furnish appropriate identification information (such as National ID, residential address) for effective identification. Moreover, the penalties imposed under the law have been revised as well by enhancing the penalties prescribed under the law. Generally, the penalties have been increased from TZS 200k to TZS 5M depending on the default/offence caused.

The Companies Act, Cap. 212, is amended to carter for the following:-

• To adopt the changes brought about by the online registration of companies that s submission of personal particulars such as date of birth, nationality or nationalities, country of residence or incorporation or registration, residential address or registered office, National Identity Number, registration or incorporation number. The aim of this amendment is to provide standard particulars which shall be required when registering a company (S 3(4) and S. 14(2)).
• Further amendment s on the addition of new S. 83A that puts a requirement for a company to notify the Registrar of any transfer or transmission of shares within 28 days from the date of transfer or transmission. Before, there were no such timeline requirements for the notification. The aim is to ensure the Company has updated and correct information that will facilitate the business environment concerning the current shareholder status of the company.
• Section 129 s also amended by deleting paragraph (f) to remove the requirement of disclosing information of beneficial owners in the annual return of the Company. Annual return is a public document, thus, disclosing beneficial owners information violates the confidentiality aspect of beneficial owner information.
• It is further proposed to amend section 145 to comply with Online Registration Systems which require submission of a copy of fillable documents in the online system. Before the amendment, it was required to submit 2 hard copies.
• Section 187(2) is amended to introduce appointment criteria of Company Secretaries. Owing to a lack of criteria for the appointment of Secretaries, services by many appointed Secretaries has been implemented without observing the prescribed standards. Therefore, S. 187(2)(a) requires Public Companies to appoint a Company secretary who is a qualified Advocate in Tanzania or a certified Public Accountant, Auditor or such other qualifications as the Minister may prescribe in the regulations. A for Private Companies, the law now requires the Company to appoint a Company Secretary who appears to have the requisite knowledge and experience of discharging the functions of the secretary of a private company.
• Another key amendment is on S. 194(1) to change the age restrictions of Directors of the Company. Onwards, the age of Directors has been changed to allow an adult person of 18 years or above to be eligible for appointment as Director in a company. Before the amendment, the age for appointment as a Director was limited to a minimum of 21 years while the maximum age was limited to 70 years. The amendments are brought about due to the fact that, other than the general statutory minimum age of majority (i.e. 18 years) all other age requirements should be an internal affair of a company which can be regulated through companies internal policies and not provided in the law.
• In addition, the amendment also introduces a new section 452A which empower the Minister, to waive penalties arising out of late filing fees within the prescribed period of time in order to enable effective and smooth operation of the Online Registration System (ORS). • New section 455A is added to provide a time limit for companies to keep their records and document(s). The duration will however be determined by the Minister upon publication in regulations. Before the amendment, the Companies Act was silent on the duration upon which Companies were obliged to keep records and documents.
• Lastly, is on the addition of S. 458A empowers the Registrar to verify facts and information lodged/submitted. Before the amendment, the Registrar of Companies had no such powers.

The Land Disputes Courts Act, Cap. 216; is also amended.

• A new definition of the Tribunal has been inserted under definition section 2 to define Tribunal to include the Ward Tribunal established under the Ward Tribunals Act, Cap 206 or, the District Land and Housing Tribunal established under this Act.
• The function of the Ward Tribunal: According to the new S. 13(4): the Ward tribunal has been conferred with the power to mediate the parties involved in the land dispute. That means, District Land and Housing Tribunal shall not hear any proceeding affecting the title to or any interest in land unless the Ward Tribunal has certified that it has failed to settle the matter amicably. However, where the Ward Tribunal fails to settle a land dispute within 30 days from the date the matter was instituted, the aggrieved party may proceed to institute the land dispute without the certificate from the ward tribunal.
• Moreover, the appointment and tenure of service for Chairmen of the District Land and Housing Tribunals have been improved. Section 25 has been amended to provide for permanent and pensionable terms for Chairmen in accordance with Public Service Act, Cap. 298.

The Magistrates’ Courts Act, (Cap. 11)

• Requirement for Court Assessors: Section 7 of the Magistrates Court Act has been amended to provide cases that would require the presence of Court Assessors. According to Section 7(1) proceedings involving customary or Islamic law the court shall, where it considers necessary in the interest of justice or upon application by any party to the proceedings, sit with not less than two assessors. It should be noted however, Magistrates are not bound by the opinion of assessors.
• The appearance of Advocates and Public Prosecutors in Primary Court: Section 33(3) of the Magistrates Court Act is amended to allow the appearance of Advocates and Public Prosecutors in Primary Court. However, the Appearance of Advocates and public prosecutors in Primary court is limited only when the Primary Court is presided over by Resident Magistrate. According to Section 33(4), the same procedure applicable in Primary Court shall apply where Advocates or Public Prosecutors appears (no change of procedure).

THE WRITTEN LAWS (MISCELLANEOUS AMENDMENTS) (NO. 4) ACT, 2021 (ACT NO. 6 OF 2021)

This law has amended different 13 laws including amendment of the Mining Act, (Cap. 123), amendment of the National Health Insurance Fund Act, (Cap. 395) and the amendment of the Non-Citizens (Employment Regulation) Act, (Cap. 436). Amendment of the Mining Act, (Cap. 123): The act is amended to incorporate several changes including amendment of S 18(4)(a) and (b) by increasing the penalty of up to TZS 50M for an individual person or a penalty of up to 100M for a corporate entity for illegal export minerals from Tanzania.

Also, the act now empowers the Executive Secretary of the Mining Commission to compound offences (to allow payment of money) and order such person to pay a sum of money not exceeding two-thirds of the amount of the fine to which such person would otherwise have been liable to pay if he had been convicted of such offence.

Amendment of the National Health Insurance Fund Act, (Cap. 395): the Act has been amended to increase the age a child for the purpose of Health Insurance to be up to 21 years instead of 18 years as was previously recognized.

Amendment of the Non-Citizens (Employment Regulation) Act, (Cap. 436)

• Establishment of an Electronic Application system for Work Permits: Section 10 of the Act has been amended by adding subsection (4) that establishes an electronic system for application and issuance of work permits. Therefore, Applications for Work permits are to be done electronically likewise the issuance of the Permit is to be done electronically as well. Following the amendment, currently, Work Permit is done through the Online Work Permit Application and Issuance System (OWAIS).
• Extension of time for Work Permits: Section 12(4) of the Act has been amended to extend the time limit for work permits of non-citizen employees from the initial period of 5 years to 8 years. This means, unless previously cancelled, a work permit shall be valid for a period of 2 years (24 months) from the date it was issued and may be renewed provided that the total period of validity of the first grant and its renewals do not exceed 8 years. • The Act also adds S. 12(7) to empower the Commissioner for Labour to attach conditions to the work permit where
  • the employer has requested the work permit for a limited duration;
  • the non-citizen is about to complete his time working in the country according to section 12(4) of the Act.
  • the Labour Commissioner considers it necessary for the proper implementation of the Act.
  • Specific Incentives to investors
    • Section 19 of the Act has been repealed and replaced to provide for specific incentives for investors. The amendment now allows an investor who has been granted incentives and registered with the Tanzania Investment Centre (TIC) and Export Processing Zone Authority (EPZA) may upon payment of a prescribed fee, employ up to 10 non-citizens (Foreigners) without being subjected to the conditions prescribed under the Act.
    • According to S. 19(2) an investor who wishes to employ additional foreigners beyond quota shall be subjected to the employment ratio of 1 non[1]citizen (Foreigner) to ten (10) local employees (Tanzanians) and the applicant must satisfy the Labour Commissioner that the nature of its business demands such additional number of non-citizens.
    • Investors or applicants who are not registered with the Tanzania Investment Centre and Export Processing Zones Authority (EPZA) are subjected to the requirement of creating employment opportunities at a ratio of 1 non-citizen to 10 local employees.
    • appearance of Advocates and Public Prosecutors in Primary Court
    • Births and Deaths Registration Act Cap 108
    • Commissioner for Labour
    • Company Director Age
    • Company Secretary
    • Dearth Certificate
    • Electronic Register of Births and death
    • Export Processing Zones Authority
    • Public Private Partnership Act Cap 103
    • Residence Permit
    • the Electronic and Postal Communication Act Cap 306
    • the Environmental Management Act Cap 191
    • the Natural Wealth and Resources Contracts (Review and Re-Negotiation of Unconscionable Terms) Act Cap 450
    • the Petroleum Act Cap 392)
    • Work Permit