Incumbent Minister of Finance and renowned Tanzanian economist, Mr. Nchemba noted after the signing that the fundamental intent of the 31-clause agreement was to create a more favorable platform for new foreign direct investment (FDI) engagements between Tanzania and the Middle East.
He stated, “This step will help expand the Tanzania government’s tax base by boosting industrial activities and products designed for domestic and export markets.”
The finance minister also noted that many businesses had been lost due to double taxation. The initiative harmed foreign trade far more than it helped, as it forestalled higher returns for investors and other traders from both the UAE and Tanzania.
The Agreement on Avoidance of Double Taxation and Prevention of Fiscal Evasion on Income Taxes was signed in Dubai by Mwigulu Nchemba and UAE's Minister of State for Financial Affairs Mohamed Bin Hadi Al Hussain on Wednesday.
Double taxation affects the taxation of income from individual and institutional business activities, air and sea transportation operations, immovable properties, interest rates, dividends, natural resource use, workforce salaries, research payments, pension and social security payments, students’ bursaries, and sports.
Mohamed Bin Hadi Al Hussain said that the removal of double taxation was a welcomed development, as it strengthens the bilateral trade between both nations and bolsters a more hospitable and friendly trade ecosystem.
He reiterated that Tanzanian authorities should preserve the investment capital protection protocols.
Moving forward both parties took out time to discuss a different concord between the two countries, called the Agreement on Promotion and Protection of Investment. They presented technical experts from both sides to speed up conversations regarding the details.
The new deals are a follow-up of President Samia Suluhu Hassan's visit to UAE in February, projected to shape the country’s international economic diplomacy.