TANZANIA and the United Arab Emirates (UAE) governments have signed the Double Taxation Avoidance Agreement (DTAA) and Prevention of Fiscal Evasion on Income Taxes.
The agreement was signed on Tuesday at the UAE's Ministry of Finance in Dubai by the Minister for Finance and Planning, Dr Mwigulu Nchemba on behalf of the government of Tanzania and his host the Minister of State for Financial Affairs, Mohamed Bin Hadi Al Hussain.
Dr Nchemba said the signing of the agreement was an effort made by President Samia Suluhu Hassan, when she visited UAE early this year, where she made a call for removal of double taxation challenges in order to promote economic relations, strengthen cooperation in tax matters and stimulate an enabling environment for investment between the two countries.
"It is our hope that after this agreement, we will see a surge in investments between our countries.
"We especially expect to see an increase in investments inflow from UAE to Tanzania, because they have large capitals but double taxation was hindering them. Investors and businesspersons from Tanzania will also be able to do business without having doubts about being charged double tax thus increasing the economic growth of the two countries," said Dr Nchemba.
Dr Nchemba disclosed that the UAE has signed similar agreements with other 139 countries in the world, including East African countries.
He urged Tanzanians to take advantage of the opportunities that arise from the removal of the double taxation to grow in business.
"This move will attract capital investment and stimulate industrialisation that will help to generate job opportunities for Tanzanians as well stimulate economic growth, by increasing the scope of taxes," said Dr Nchemba.
Dr Nchemba also held discussion with his host, where they discussed various issues of cooperation, including the completion of the 'Agreement on Promotion and Protection of Investment' where they directed teams of experts from both sides to meet and negotiate on the contract for the benefits of both parties.
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On his part, the Deputy Permanent Secretary in the ministry of Finance and Planning, Lawrence Mafuru, disclosed that the signing of the agreement with 31 elements which the two countries have agreed to implement, will enable a person or institution conducting business in the two nations and be taxed on one side, instead of the previous procedure, where they were being taxed on each side.
He said that the agreement will build confidence for investors to invest their capital in the country, something which did not exist in the past.
The areas involved in the agreement are the taxation of income from business, air and water transport, immovable property, interest, dividends, harvesting of natural resources, workers and researchers, students, pension payments and Social Security as well as issues related to sports.
For his part, the Minister Bin Had Al Hussain said that the step reached to eliminate double taxation between Tanzania and the UAE will attract more investors from UAE and stimulate the economic growth of the people of the two countries.
He further commended efforts by President Samia Suluhu Hassan of improving the investment environment in the country.
