Top

6. Appropriate Regulation
6.1 Fair Tax Regime
6.2 Professional Services
6.3 Capital Markets
In-Country Assessment Information

6. Appropriate Regulation

 

Goal – A comprehensive regulatory regime that is transparent, efficient, simple in its implementation and that leads to accurate reporting of property values and prudent protection from market risks

 

 

back to top

6.1 Fair Tax Regime

 

Core Question:         Do market participants feel the overall tax rate is fair and participate in formal transactions? Strong – tax rates are moderate.

 

Transfer Tax

6.1.1   What is the total property transfer tax including all duties and payments? Strong – 4.4%

 

Overall Tax

6.1.2   What is the overall tax rate on entrepreneurs (as a percentage of profits)? 45.3% – Ranking – 133rd  out of 185, Very Weak – Trend ↓ 

 

Divestment

Survey Question

SQ 26  What is the tax on profits for foreign investors when divesting property? 30% corporate tax – Strong

Source: Doing Business 2013– Paying Taxes & Registering Property, World Bank
http://www.doingbusiness.org/data/exploreeconomies/tanzania#paying-taxes  

 

back to top

6.2 Professional Services

 

Core Question:         Are the professional services necessary for efficient and transparent property markets available and appropriately regulated and supervised? No – Very Weak, the organized builder/developer/sales market is virtually absent.

 

Asset Valuers

Survey Questions

SQ 27  Are property valuers licensed and/or certified by the government? Yes – Weak, National Council of Professional Surveyors (NCPS)

Civil Society Resource: The Appraisal Foundation www.appraisalfoundation.org   

 

 

SQ 28  How effective are mechanisms in place to discipline valuers who engage in misconduct? Very Weak – NCPS is not effective promoting and regulating standards.

See pages 26-28 for in-country assessment information regarding valuers.

 

Brokers & Agents

Survey Questions

SQ 29  Are real estate brokers and agents licensed and/or certified by the government? No – Very Weak, none outside surveyors/estate agents for the land market.

 

SQ 30  How effective are mechanisms in place to discipline brokers or agents who engage in misconduct? Very Weak – none in place

 

Mortgage Professionals

Survey Questions

SQ 31  Are mortgage professionals licensed and/or certified by the government? No – Very Weak, there is no real access to mortgage finance.

  

SQ 32  How effective are mechanisms in place to discipline mortgage professionals who engage in misconduct? Very Weak – none in place

 

back to top

6.3 Capital Markets

 

Core Question:         Are capital markets well-regulated and diversified enough to provide financial resources to private-sector entrepreneurs and innovators? No –Weak , the number of companies and instruments listed is still considered too limited and far below original expectations.

 

Capital Flows

6.3.1   How restricted is the flow of capital into and out of the country? Strong – Ranking 50th out of 144; Score 4.8 out of 7

 

Security Exchanges

6.3.2   Is the regulation of securities exchanges transparent, effective and free of influence from government and industry? No –Weak, Ranking 107th out of 144; Score 3.6 out of 7

Source: The Global Competitiveness Report2013, World Economic Forum
http://www.weforum.org/issues/global-competitiveness

 

Securitization

6.3.3   What is the depth of asset-backed securities, mortgage-backed securities, high-yield bonds and highly leveraged loans? Very Weak – Ranking-62nd out of 62, Score 1.0 out of 7.

Source: 2012 Financial Development Report

http://www.weforum.org/reports/financial-development-report-2012

 

back to top

In-Country Assessment Information (as of 2010)


Taxation

FQ 21. What is the overall taxation system in regards to property?
Resident corporation              30%
Non-resident corporation*      30%
DSE listed companies**         25%
Alternative minimum tax***   0.3%

* A non-resident corporation with a permanent establishment also has to account for tax of 10% on “repatriated income”
** Provided at least 30% of shares are publicly issued
*** Charged on turnover where a corporation makes tax losses for 3 consecutive years as a result of tax incentives

The government plans to lower corporate income tax to 25% from 30% for listed companies in the Dar es Salaam Stock Exchange that have issued at least 30% of their share capital to encourage more listings.

Capital deductions: Buildings (straight line), Plant and machinery (initial allowance)
Intangible assets (straight line): Over useful life

Foreign tax relief: Tanzania has double taxation agreements with Kenya, Uganda, Italy, Sweden, Norway, Denmark, Finland, India and Zambia.

Withholding tax

The following amounts, when paid to a non-resident person, shall be subjected to non-resident withholding tax rates as shown below:

Any management or professional fees: 15% of the gross amount payable
Any royalty: 15% of the gross amount payable
Any rent: 15% of the gross amount payable
Any dividend: 10% of the gross amount payable
Any interest: 10% of the gross amount payable
Technical services: 5% of the gross amount payable

Source: www.taxrates.cc/html/tanzania-tax-rates.html

 

 

Brokerage

FQ 22. What is the number of practitioners in the country including full-time brokers/agents with formal training and part-time, informal brokers?

Unknown, Internet sites: http://estates.tzadverts.com/; www.propertyzote.com/; www.viviun.com/Real_Estate/Tanzania/; http://www.knightfrank.co.tz/

 

FQ 23. What is the number and average size of brokerage companies?

Tanzania Institution of Valuers and Estate Agents has 29 corporate members and 250 individual members. Its corporate members engage in the whole range of real estate activities including asset valuations, property management, and estate agency.

 

FQ 24. Are there brokers associations active in the market? What number and what percentage of practitioners belong?

None are known outside TIVEA.

 

FQ 25. What training programs are available to enhance productivity?

None known

 

FQ 26. Is there a Code of Ethics or standards that practitioners follow? Is the Code enforced?

None known

 

FQ 27.  Do civil society organizations exist to support the development of mortgage professionals?

None known

 

back to top