Doing Business 2018 Tanzania Economy Pro le of Tanzania Doing Business 2018 Indicators (in order of appearance in the document) Starting a business Procedures, time, cost and paid-in minimum capital to start a limited liability company Dealing with construction Procedures, time and cost to complete all formalities to build a warehouse and the quality control and permits safety mechanisms in the construction permitting system Getting electricity Procedures, time and cost to get connected to the electrical grid, the reliability of the electricity supply and the transparency of tariffs Registering property Procedures, time and cost to transfer a property and the quality of the land administration system Getting credit Movable collateral laws and credit information systems Protecting minority investors Minority shareholders’ rights in related-party transactions and in corporate governance Paying taxes Payments, time and total tax rate for a firm to comply with all tax regulations as well as post-filing processes Trading across borders Time and cost to export the product of comparative advantage and import auto parts Enforcing contracts Time and cost to resolve a commercial dispute and the quality of judicial processes Resolving insolvency Time, cost, outcome and recovery rate for a commercial insolvency and the strength of the legal framework for insolvency Labor market regulation Flexibility in employment regulation and aspects of job quality About Doing Business The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level. The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle. Doing Business captures several important dimensions of the regulatory environment as it applies to local rms. It provides quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of labor market regulation. Although Doing Business does not present rankings of economies on the labor market regulation indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business, it does present the data for these indicators. By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages economies to compete towards more e cient regulation; o ers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy. In addition, Doing Business o ers detailed subnational reports, which exhaustively cover business regulation and reform in di erent cities and regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region and with the 190 economies that Doing Business has ranked. The rst Doing Business report, published in 2003, covered 5 indicator sets and 133 economies. This year’s report covers 11 indicator sets and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business, also collected data for the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has bene ted from feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the regulatory environment for business around the world. Page 2   for insolvency Doing Business Labor market 2018 regulation Tanzania Flexibility in employment regulation and aspects of job quality About Doing Business The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level. The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle. Doing Business captures several important dimensions of the regulatory environment as it applies to local rms. It provides quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of labor market regulation. Although Doing Business does not present rankings of economies on the labor market regulation indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business, it does present the data for these indicators. By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages economies to compete towards more e cient regulation; o ers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy. In addition, Doing Business o ers detailed subnational reports, which exhaustively cover business regulation and reform in di erent cities and regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region and with the 190 economies that Doing Business has ranked. The rst Doing Business report, published in 2003, covered 5 indicator sets and 133 economies. This year’s report covers 11 indicator sets and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business, also collected data for the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has bene ted from feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the regulatory environment for business around the world. The distance to frontier (DTF) measure shows the distance of each economy to the “frontier,” which represents the best performance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s distance to frontier is re ected on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents the frontier. The ease of doing business ranking ranges from 1 to 190. The ranking of 190 economies is determined by sorting the aggregate distance to frontier scores, rounded to two decimals. More about Doing Business (PDF, 5MB) Ease of Doing Business in Region Sub-Saharan Africa DB 2018 Rank 190 1 Tanzania Income Category Low income 137 Population 55,572,201 DB 2018 Distance to Frontier (DTF) GNI Per Capita (US$) 900 0 100 54.04 City Covered Dar es Salaam DB 2018 Distance to Frontier (DTF) 0 100 65.15: Kenya (Rank: 80) 64.94: Botswana (Rank: 81) 58.94: Malawi (Rank: 110) 54.04: Tanzania (Rank: 137) 54.00: Mozambique (Rank: 138) Page 3   50.43: Regional Average (Sub­Saharan Africa) aggregate distance to frontier scores, rounded to two decimals. More Doingabout 2018 (PDF, Doing Business Business 5MB) Tanzania Ease of Doing Business in Region Sub-Saharan Africa DB 2018 Rank 190 1 Tanzania Income Category Low income 137 Population 55,572,201 DB 2018 Distance to Frontier (DTF) GNI Per Capita (US$) 900 0 100 54.04 City Covered Dar es Salaam DB 2018 Distance to Frontier (DTF) 0 100 65.15: Kenya (Rank: 80) 64.94: Botswana (Rank: 81) 58.94: Malawi (Rank: 110) 54.04: Tanzania (Rank: 137) 54.00: Mozambique (Rank: 138) 50.43: Regional Average (Sub­Saharan Africa) Note: The distance to frontier (DTF) measure shows the distance of each economy to the “frontier,” which represents the best performance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s distance to frontier is re ected on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents the frontier. The ease of doing business ranking ranges from 1 to 190. Rankings on Doing Business topics - Tanzania 1 28 55 58 55 82 82 Rank 108 109 129 136 142 156 154 162 163 182 190 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Investors Borders Permits Distance to Frontier (DTF) on Doing Business topics - Tanzania 100 80 73.03 73.96 65.00 61.66 60 56.43 55.49 DTF 50.13 45.00 39.52 40 20.21 20 0 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Change:+0.32 Change:-1.24 Change:0.00 Investors Change:-3.45 Borders Change:0.00 Change:+0.05 Change:+0.66 Permits Change:0.00 Change:0.00 Change:+4.76 Starting a Business Page 4   This topic measures the paid-in minimum capital requirement, number of procedures, time and cost for a small- to medium-sized a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Change:+0.32 Change:-1.24 Change:0.00 Investors Change:-3.45 Borders Change:0.00 Change:+0.05 Change:+0.66 Permits Change:0.00 Change:0.00 Doing Business 2018 Tanzania Change:+4.76 Starting a Business This topic measures the paid-in minimum capital requirement, number of procedures, time and cost for a small- to medium-sized limited liability company to start up and formally operate in economy’s largest business city. To make the data comparable across 190 economies, Doing Business uses a standardized business that is 100% domestically owned, has start-up capital equivalent to 10 times income per capita, engages in general industrial or commercial activities and employs between 10 and 50 people one month after the commencement of operations, all of whom are domestic nationals. Starting a Business considers two types of local limited liability companies that are identical in all aspects, except that one company is owned by 5 married women and the other by 5 married men. The distance to frontier score for each indicator is the average of the scores obtained for each of the component indicators. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally start and operate a To make the data comparable across economies, several assumptions company (number) about the business and the procedures are used. It is assumed that any required information is readily available and that the entrepreneur will pay Pre-registration (for example, name verification no bribes. or reservation, notarization) Registration in economy’s largest business city The business: - Is a limited liability company (or its legal equivalent). If there is more than Post-registration (for example, social security one type of limited liability company in the economy, the most common registration, company seal) among domestic rms is chosen. Information on the most common form is Obtaining approval from spouse to start business obtained from incorporation lawyers or the statistical o ce. or leave home to register company - Operates in the economy’s largest business city and the entire o ce Obtaining any gender-specific permission that space is approximately 929 square meters (10,000 square feet). For 11 can impact company registration, company economies the data are also collected for the second largest business city. operations and process of getting national - Is 100% domestically owned and has ve owners, none of whom is a legal identity card entity; and has a start-up capital of 10 times income per capita and has a Time required to complete each procedure turnover of at least 100 times income per capita. (calendar days) - Performs general industrial or commercial activities, such as the production or sale of goods or services to the public. The business does Does not include time spent gathering not perform foreign trade activities and does not handle products subject information to a special tax regime, for example, liquor or tobacco. It does not use Each procedure starts on a separate day (2 heavily polluting production processes. procedures cannot start on the same day) - Leases the commercial plant or o ces and is not a proprietor of real Procedures fully completed online are recorded estate and the amount of the annual lease for the o ce space is equivalent as ½ day to 1 times income per capita. Procedure is considered completed once final - Does not qualify for investment incentives or any special bene ts. document is received - Has at least 10 and up to 50 employees one month after the commencement of operations, all of whom are domestic nationals. No prior contact with officials - Has a company deed 10 pages long. Cost required to complete each procedure (% of The owners: income per capita) - Have reached the legal age of majority. If there is no legal age of majority, Official costs only, no bribes they are assumed to be 30 years old. No professional fees unless services required by - Are sane, competent, in good health and have no criminal record. law or commonly used in practice - Are married and the marriage is monogamous and registered with the authorities. Paid-in minimum capital (% of income per capita) - Where the answer di ers according to the legal system applicable to the Funds deposited in a bank or with third party woman or man in question (as may be the case in economies where there before registration or up to 3 months after is legal plurality), the answer used will be the one that applies to the incorporation majority of the population. Standardized Company Page 5   before registration or up to 3 months after is legal plurality), the answer used will be the one that applies to the incorporation majority of the population. Doing Business 2018 Tanzania Standardized Company Legal form Private Limited Liability Company Paid-in minimum capital requirement TZS 0 City Covered Dar es Salaam Sub-Saharan OECD high Indicator Tanzania Africa income Overall Best Performer Procedure – Men (number) 11 7.6 4.9 1.00 (New Zealand) Time – Men (days) 28 24.0 8.5 0.50 (New Zealand) Cost – Men (% of income per capita) 42.9 49.9 3.1 0.00 (United Kingdom) Procedure – Women (number) 11 7.7 4.9 1.00 (New Zealand) Time – Women (days) 28 24.1 8.5 0.50 (New Zealand) Cost – Women (% of income per capita) 42.9 49.9 3.1 0.00 (United Kingdom) Paid-in min. capital (% of income per capita) 0.0 25.6 8.7 0.00 (113 Economies) Figure – Starting a Business in Tanzania and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 83.20: Kenya (Rank: 117) 79.86: Mozambique (Rank: 137) 76.82: Regional Average (Sub-Saharan Africa) 76.43: Malawi (Rank: 152) 76.22: Botswana (Rank: 153) 73.03: Tanzania (Rank: 162) Note: The ranking of economies on the ease of starting a business is determined by sorting their distance to frontier scores for starting a business. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Starting a Business in Tanzania – Procedure, Time and Cost Time Cost 30 25 25 ost (% of income per capita) 20 20 Time (days) 15 15 10 10 Page 6   starting a business. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Tanzania Figure – Starting a Business in Tanzania – Procedure, Time and Cost Time Cost 30 25 25 Cost (% of income per capita) 20 20 Time (days) 15 15 10 10 5 5 0 0 1 2 3 4 5 6 7 8 *9 * 10 * 11 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Details – Starting a Business in Tanzania – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Apply for clearance of the proposed company name 1 day no charge Agency : Business Registration and Licensing Authority (BRELA) A business name and a company name refer to two di erent names. Regarding the company name, the applicant writes a letter to BRELA with at least three proposed names for the company. BRELA will then approve one of the names proposed. A company can have di erent businesses or projects, which are registered under the umbrella of the company but can have di erent names. An application for registering a business name can be submitted either by mail to the Registrar of Companies or at the counter of the Business Registration and Licensing Authority (BRELA) for clearance. Upon receiving noti cation that the name is available, the applicant prepares the memorandum and articles of association and submits to BRELA. If the memorandum and articles of association have been prepared and presented for registration without name clearance, the search will be conducted during the registration process. If a search reveals a similar name in the Register, the name application will be rejected. Recently, the Business Registration and Licensing Authority (BRELA) enabled the online name search service to be conducted on its website: www.brela.go.tz. 2 Obtain a notarized declaration of compliance 1 day TZS 10,000-50,000 Agency : Notary Page 7   Entrepreneurs visit the notary for notarization of the declaration of (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Doing Business 2018 Tanzania Details – Starting a Business in Tanzania – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Apply for clearance of the proposed company name 1 day no charge Agency : Business Registration and Licensing Authority (BRELA) A business name and a company name refer to two di erent names. Regarding the company name, the applicant writes a letter to BRELA with at least three proposed names for the company. BRELA will then approve one of the names proposed. A company can have di erent businesses or projects, which are registered under the umbrella of the company but can have di erent names. An application for registering a business name can be submitted either by mail to the Registrar of Companies or at the counter of the Business Registration and Licensing Authority (BRELA) for clearance. Upon receiving noti cation that the name is available, the applicant prepares the memorandum and articles of association and submits to BRELA. If the memorandum and articles of association have been prepared and presented for registration without name clearance, the search will be conducted during the registration process. If a search reveals a similar name in the Register, the name application will be rejected. Recently, the Business Registration and Licensing Authority (BRELA) enabled the online name search service to be conducted on its website: www.brela.go.tz. 2 Obtain a notarized declaration of compliance 1 day TZS 10,000-50,000 Agency : Notary Entrepreneurs visit the notary for notarization of the declaration of compliance. Notaries charge within the range of TZS 10,000-50,000 for notarial services for normal documents such as form No. 14 b. 3 Apply for company incorporation and obtain the certi cate of 4 days TZS 337,200 incorporation Agency : Registrar of Companies Companies can be registered only in Dar es Salaam. A lawyer is not required, but using one is common practice. To apply for a certi cate of incorporation, a subscriber, secretary, or a person named in the articles of association as a director must submit the following to the Registrar of Companies: - 14a (First Directors and Secretary and Intended situation of Registered O ce) - 14b (Declaration of Compliance on Application for the Registration of a Company) The Memorandum and Articles of Association are also led with the forms. After the forms are led, the certi cate of incorporation is usually processed within 3 days. Registration forms are free. A company can prepare its own articles of association but Table A of the Schedules to the Companies is in most cases adopted by companies limited by shares. Page 8   Company registration fee (based on share capital): compliance. Notaries charge within the range of TZS 10,000-50,000 for Doing notarial Business services 2018 for normal documents such as form No. 14 b. Tanzania 3 Apply for company incorporation and obtain the certi cate of 4 days TZS 337,200 incorporation Agency : Registrar of Companies Companies can be registered only in Dar es Salaam. A lawyer is not required, but using one is common practice. To apply for a certi cate of incorporation, a subscriber, secretary, or a person named in the articles of association as a director must submit the following to the Registrar of Companies: - 14a (First Directors and Secretary and Intended situation of Registered O ce) - 14b (Declaration of Compliance on Application for the Registration of a Company) The Memorandum and Articles of Association are also led with the forms. After the forms are led, the certi cate of incorporation is usually processed within 3 days. Registration forms are free. A company can prepare its own articles of association but Table A of the Schedules to the Companies is in most cases adopted by companies limited by shares. Company registration fee (based on share capital): - Share capital from 20,000 to 1,000,000: TZS 95,000. - Share capital from 1,000,000 to 5,000,000: TZS 175,000. - Share capital from 5,000,000 to 20,000,000: TZS 260,000. - Share capital from 20,000,000 to 50,000,000: TZS 290,000. - Share capital 50,000,000 and over: TZS 440,000. Filing fee: TZS 66,000: 22,000 per document Stamp duty fee: - Original memorandum and articles of association: TZS 6,200. - Every additional copy: TZS 5,000. 4 Apply for taxpayer identi cation number (TIN) 1 day no charge Agency : Tanzania Revenue Authority (TRA) TIN registration is free of charge. Tax registration has been computerized. The Certi cate of Incorporation shall be attached to the TIN application enclosed with Memorandum and Articles of Associations when a person makes application to TRA. The limited liabilities company can apply for TIN certi cate by lling TIN application forms as follows: • Application for the company. • Application for each shareholder/director, in case any director has already issued with TIN certi cates for other purpose he or she cannot make another application. The same TIN number will be used. 5 Obtain taxpayer identi cation number (TIN) 1 day no charge Agency : Tanzania Revenue Authority (TRA) At least one of the directors of the company must be physically present at the tax o ce to give their ngerprints (biometric data). The applicant must visit TRA o ces to pick up the TIN number in person. The company will be required to declare its estimated income or turnover for the provision tax assessment for the particular year. At the TRA o ce, the tax o cer may Page 9   interview the company founders/directors and record their business and issued with TIN certi cates for other purpose he or she cannot make Doing another 2018 The application. Business same TIN number will be used. Tanzania 5 Obtain taxpayer identi cation number (TIN) 1 day no charge Agency : Tanzania Revenue Authority (TRA) At least one of the directors of the company must be physically present at the tax o ce to give their ngerprints (biometric data). The applicant must visit TRA o ces to pick up the TIN number in person. The company will be required to declare its estimated income or turnover for the provision tax assessment for the particular year. At the TRA o ce, the tax o cer may interview the company founders/directors and record their business and personal particulars. 6 Apply for a business license 6 days TZS 1,000 Agency : Ministry of Industry and Trade (MIT) or Local Government Authorities (LGAs) The business license is either issued by the Ministry of Industry and Trade or the Local Authorities depending on the nature of business. Together with the application, the following documents must be submitted: 1) Certi cate of incorporation 2) Memorandum and Articles of Association 3) Proof of Tanzanian Citizenship 4) Proof of a suitable company premises 5) Taxpayer Identi cation Number (TIN) 7 Apply for the VAT certi cate 4 days no charge Agency : Tanzania Revenue Authority (TRA) VAT registration takes 3 to 5 days if the proposed company has over the threshold income of TZS 100,000,000. 8 Register for the workmen’s compensation insurance 1 day no charge Agency : Workers Compensation Fund (WCF) and Tanzania Insurance Regulatory Authority (TIRA) To register for workers’ compensation insurance, employers must complete the Workmen’s Compensation Tari Proposal Form. This form should be completed once the rm begins hiring employees and just before the rm becomes operational. However, because the insurance industry is privatized in Tanzania, employers may opt to take an insurance policy instead of the workmen’s compensation claims. 9 Register with the Occupational Safety and Health Authority (OSHA) 10 days, TZS 600,000 Agency : Occupational Health and Safety Authority (OSHA) simultaneous Any person being the owner or occupier of a workplace shall, before operating, be required to register such factory or work place. Therefore the applicant is required to complete the application form and provide the company's registration documents to OSHA. Prior to approving an application OSHA o cials visit the premises for inspection on health and safety. The application requires the following: - Name of occupier - Address - Nature of work - Total number of employees Receive inspection from the Occupational Safety and Health Authority 1 day, simultaneous No Charge 10 (OSHA) Page 10   - Total number of employees Doing Business 2018 Tanzania Receive inspection from the Occupational Safety and Health Authority 1 day, simultaneous No Charge 10 (OSHA) Agency : Occupational Health and Safety Authority (OSHA) Prior to approving an application for the workplace, OSHA o cials visit the premises for inspection on health and safety. A certi cate of registration and certi cate of compliance will only be issued once the OSHA o cials are satis ed that the premises are in safe and good habitable condition. Obtain Social Security registration number 7 days, no charge 11 Agency : Social Security Regulatory Authority (SSRA) simultaneous It takes a week to obtain a social security registration number. Every employer in the formal sector is required to register his/her employees with any of the mandatory schemes, provided that it shall be the right of the employee to choose the mandatory scheme to register under. These mandatory schemes are established by law and guaranteed by the Government to provide social security bene ts to employees. Applies to women only. Takes place simultaneously with previous procedure. Dealing with Construction Permits This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required noti cations, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certi cation requirements. The most recent round of data collection was completed in June 2017. See the methodology for more information What the indicators measure Case study assumptions Procedures to legally build a warehouse (number) To make the data comparable across economies, several assumptions about the construction company, the warehouse project and the utility Submitting all relevant documents and obtaining connections are used. all necessary clearances, licenses, permits and certificates The construction company (BuildCo): Submitting all required notifications and - Is a limited liability company (or its legal equivalent) and operates in the receiving all necessary inspections economy’s largest business city. For 11 economies the data are also collected for the second largest business city. Obtaining utility connections for water and - Is 100% domestically and privately owned; has ve owners, none of whom sewerage is a legal entity. Has a licensed architect and a licensed engineer, both Registering and selling the warehouse after its registered with the local association of architects or engineers. BuildCo is completion not assumed to have any other employees who are technical or licensed Time required to complete each procedure experts, such as geological or topographical experts. (calendar days) - Owns the land on which the warehouse will be built and will sell the warehouse upon its completion. Does not include time spent gathering information The warehouse: Each procedure starts on a separate day— - Will be used for general storage activities, such as storage of books or though procedures that can be fully completed stationery. online are an exception to this rule - Will have two stories, both above ground, with a total constructed area of Procedure is considered completed once final approximately 1,300.6 square meters (14,000 square feet). Each oor will document is received be 3 meters (9 feet, 10 inches) high and will be located on a land plot of No prior contact with officials approximately 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the warehouse is valued at 50 times income per capita. Cost required to complete each procedure (% of Page 11   - Will have complete architectural and technical plans prepared by a Applies to women only. Takes place simultaneously with previous procedure. Doing Business 2018 Tanzania Dealing with Construction Permits This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required noti cations, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certi cation requirements. The most recent round of data collection was completed in June 2017. See the methodology for more information What the indicators measure Case study assumptions Procedures to legally build a warehouse (number) To make the data comparable across economies, several assumptions about the construction company, the warehouse project and the utility Submitting all relevant documents and obtaining connections are used. all necessary clearances, licenses, permits and certificates The construction company (BuildCo): Submitting all required notifications and - Is a limited liability company (or its legal equivalent) and operates in the receiving all necessary inspections economy’s largest business city. For 11 economies the data are also collected for the second largest business city. Obtaining utility connections for water and - Is 100% domestically and privately owned; has ve owners, none of whom sewerage is a legal entity. Has a licensed architect and a licensed engineer, both Registering and selling the warehouse after its registered with the local association of architects or engineers. BuildCo is completion not assumed to have any other employees who are technical or licensed Time required to complete each procedure experts, such as geological or topographical experts. (calendar days) - Owns the land on which the warehouse will be built and will sell the warehouse upon its completion. Does not include time spent gathering information The warehouse: Each procedure starts on a separate day— - Will be used for general storage activities, such as storage of books or though procedures that can be fully completed stationery. online are an exception to this rule - Will have two stories, both above ground, with a total constructed area of Procedure is considered completed once final approximately 1,300.6 square meters (14,000 square feet). Each oor will document is received be 3 meters (9 feet, 10 inches) high and will be located on a land plot of No prior contact with officials approximately 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the warehouse is valued at 50 times income per capita. Cost required to complete each procedure (% of - Will have complete architectural and technical plans prepared by a warehouse value) licensed architect. If preparation of the plans requires such steps as Official costs only, no bribes obtaining further documentation or getting prior approvals from external Building quality control index (0-15) agencies, these are counted as procedures. - Will take 30 weeks to construct (excluding all delays due to administrative Sum of the scores of six component indices: and regulatory requirements). Quality of building regulations (0-2) The water and sewerage connections: Quality control before construction (0-1) - Will be 150 meters (492 feet) from the existing water source and sewer Quality control during construction (0-3) tap. If there is no water delivery infrastructure in the economy, a borehole Quality control after construction (0-3) will be dug. If there is no sewerage infrastructure, a septic tank in the smallest size available will be installed or built. Liability and insurance regimes (0-2) - Will have an average water use of 662 liters (175 gallons) a day and an Professional certifications (0-4) average wastewater ow of 568 liters (150 gallons) a day. Will have a peak water use of 1,325 liters (350 gallons) a day and a peak wastewater ow of 1,136 liters (300 gallons) a day. - Will have a constant level of water demand and wastewater ow throughout the year; will be 1 inch in diameter for the water connection and 4 inches in diameter for the sewerage connection. Standardized Warehouse Page 12   and 4 inches in diameter for the sewerage connection. Doing Business 2018 Tanzania Standardized Warehouse Estimated value of warehouse TZS 94,867,471.60 City Covered Dar es Salaam Sub-Saharan OECD high Indicator Tanzania Africa income Overall Best Performer Procedures (number) 24 14.8 12.5 7.00 (Denmark) Time (days) 184 147.5 154.6 27.5 (Korea, Rep.) Cost (% of warehouse value) 6.6 9.9 1.6 0.10 (5 Economies) Building quality control index (0-15) 12.0 8.0 11.4 15.00 (3 Economies) Figure – Dealing with Construction Permits in Tanzania and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 72.80: Mozambique (Rank: 56) 72.27: Botswana (Rank: 59) 63.16: Kenya (Rank: 124) 59.22: Malawi (Rank: 144) 56.91: Regional Average (Sub-Saharan Africa) 56.43: Tanzania (Rank: 156) Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their distance to frontier scores for dealing with construction permits. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Dealing with Construction Permits in Tanzania – Procedure, Time and Cost Time Cost 180 3.5 160 3 Cost (% of warehouse value) 140 2.5 120 Time (days) 2 100 80 1.5 60 1 40 0.5 20 0 0 1 *2 3 *4 5 6 *7 8 *9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 * 24 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Page 13   component indicators. Doing Business 2018 Tanzania Figure – Dealing with Construction Permits in Tanzania – Procedure, Time and Cost Time Cost 180 3.5 160 3 Cost (% of warehouse value) 140 2.5 120 Time (days) 2 100 80 1.5 60 1 40 0.5 20 0 0 1 *2 3 *4 5 6 *7 8 *9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 * 24 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Dealing with Construction Permits in Tanzania and comparator economies – Measure of Quality 14 12.0 12 11.0 10.5 9.5 10 9.0 Index score 8.0 8 6 4 2 0 Tanzania Botswana Kenya Malawi Mozambique Sub-Saharan Africa Details – Dealing with Construction Permits in Tanzania – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain location plan from City Council - Ministry of Lands 7 days TZS 5,000 Agency : City Council (Ministry of Lands) BuildCo must write a letter to the City Council and the Ministry of Lands requesting a block plan, indicating the location of the land, street, ward, city, and region. If the plots are in an unplanned area, it may take more than 90 days since the City Council will need to re-survey the plot and produce the location plan. 2 Obtain certi ed copy of the land rent receipts from the Internal Revenue 7 days no charge Authority Agency : Internal Revenue Authority Page 14   Tanzania Botswana Kenya Malawi Mozambique Sub-Saharan Africa Doing Business 2018 Tanzania Details – Dealing with Construction Permits in Tanzania – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain location plan from City Council - Ministry of Lands 7 days TZS 5,000 Agency : City Council (Ministry of Lands) BuildCo must write a letter to the City Council and the Ministry of Lands requesting a block plan, indicating the location of the land, street, ward, city, and region. If the plots are in an unplanned area, it may take more than 90 days since the City Council will need to re-survey the plot and produce the location plan. 2 Obtain certi ed copy of the land rent receipts from the Internal Revenue 7 days no charge Authority Agency : Internal Revenue Authority The Ministry of Lands, Housing and Urban Development is responsible for the overall payment of land rent and property tax; the municipalities and cities in di erent regions have this same role. 3 Submit project brief and obtain EIA certi cate 30 days TZS 70,000 Agency : National Environment Management Council (NEMC) According to Articles 5 & 6 of the Environmental law of 2004, BuildCo must submit 10 copies of a project brief, the location plan, with a registration form to NEMC to register the project. 4 Obtain project clearance from the Fire Department 21 days TZS 600,000 Agency : Municipal Council - Ministry of Home a airs One of the requirements to obtain a building permit is to have a clearance from the Fire Department, which is under the Ministry of Home A airs. This clearance will attest that the correct re ghting tools will be used. 5 Request planning consent from the City Council 20 days no charge Agency : City Council (Ministry of Lands) Once the preliminary drawings are completed BuildCo applies for a planning consent at the Municipal Council. 6 Request and obtain building permit 38 days TZS 1,439,991 Agency : City Council (Ministry of Lands) The documents required for obtaining a building permit are the following: • Architectural/engineering drawings and calculations, including site layout and location plans, elevations, sections of the building including storm water drainage, re protection, driveways and parking. All drawings should be signed by a registered professional architect and all the detailed structural, electrical, plumbing and engineering installations by a registered professional engineer. • Title deed showing ownership of land • Receipts of payments of land rents and other statutory fees, and changes of land use if any Four copies of the documents must be submitted to the City Council for planning approvals. The City Council distributes three copies of the les to the Health Department, Fire Department, and Planning Department, and retains a copy for itself. Each of these entities must approve the project. To speed up the approval process, BuildCo should follow up with each of these Page 15   Once the preliminary drawings are completed BuildCo applies for a planning Doing consent at the Business Municipal 2018 Council. Tanzania 6 Request and obtain building permit 38 days TZS 1,439,991 Agency : City Council (Ministry of Lands) The documents required for obtaining a building permit are the following: • Architectural/engineering drawings and calculations, including site layout and location plans, elevations, sections of the building including storm water drainage, re protection, driveways and parking. All drawings should be signed by a registered professional architect and all the detailed structural, electrical, plumbing and engineering installations by a registered professional engineer. • Title deed showing ownership of land • Receipts of payments of land rents and other statutory fees, and changes of land use if any Four copies of the documents must be submitted to the City Council for planning approvals. The City Council distributes three copies of the les to the Health Department, Fire Department, and Planning Department, and retains a copy for itself. Each of these entities must approve the project. To speed up the approval process, BuildCo should follow up with each of these departments directly. After these departments grant their approval, the city engineer approves the plans, and then the City Council must approve the application. By law the City Council meets every 3 months, however, to avoid any back log, the City Council is now meeting on a monthly basis. The cost of the building permit is TZS 1,200,000 for the rst 929.01 sq. m. and TZS 60,000 for every additional 92.90 sq. m. 7 Receive pre-construction inspection from the City Council o cers 1 day no charge Agency : City Council (Ministry of Lands) BuildCo must notify the City Council 7 days before beginning construction, and within those 7 days City Council o cers should perform the inspection. This procedure has no cost but if there is no transportation in the o ce and the customer needs the work done he can assist with the transportation at his own. This is to speed up the process rather than wait for transport allocation. Following the devastating collapse of a 10-storey building, the regional directorate of Dar es Salam has undertaken several ad hoc measures to ensure safety and security of citizens. This has led to increased requirements for noti cation of commencement of construction works. Now companies have to submit a formal letter explaining the parameters and speci cs of projects. However, it led to a backlog and delays by 2 -- 3 weeks of inspections that have to approve the site before works begin. The municipal team of experts such as structural engineer, drainage engineer, architect, quantity surveyor, town planner and re engineer visit the site and conduct a general inspection. 8 Register project with the Architects Registration Board 7 days no charge Agency : Architects Registration Board It is required by law under S.5 (1) (d) and S.34 (5) of the Act. No 4 of 2010 that Architectural and Quantity Surveying rms register with the Board their construction projects within 30 days after securing the project and that the signboard has a valid Board’s logo issued by the Board. Among the documents to be submitted are, a copy of the building permit and copy of the approved plans. Page 16   engineer, architect, quantity surveyor, town planner and re engineer visit Doing the conduct a site and 2018 Business general inspection. Tanzania 8 Register project with the Architects Registration Board 7 days no charge Agency : Architects Registration Board It is required by law under S.5 (1) (d) and S.34 (5) of the Act. No 4 of 2010 that Architectural and Quantity Surveying rms register with the Board their construction projects within 30 days after securing the project and that the signboard has a valid Board’s logo issued by the Board. Among the documents to be submitted are, a copy of the building permit and copy of the approved plans. 9 Notify the City Council of commencement of work 1 day no charge Agency : City Council BuildCo must rst notify the City Council of the commencement of work. This is also needed to register the project with the Engineers Registration Board and the Contractors Registration Board 10 Register project with the Engineers Registration Board 7 days TZS 1,000,000 Agency : Engineers Registration Board The engineer who designed the structural plans must register the project with the Engineers Registration Board. Several documents must be provided among which a copy of the building permit, copy of approved plans and a copy of the commencement notice. 11 Register project with Contractors' Registration Board 7 days TZS 100,000 Agency : Contractor Registration Board BuildCo must register the project with the Contractors Registration Board in order to obtain the sticker which will be xed on the Board on the construction site. BuildCo will have to provide a copy of the building permit and the approved plans. Registration can only be done once the building permit has been approved and the project has also been registered with all relevant agencies (architect and engineer). 12 Request and receive excavation inspection from the City Council o cers 1 day no charge Agency : City Council (Ministry of Lands) 13 Request and receive foundations inspection from the City Council 1 day no charge o cers Agency : City Council (Ministry of Lands) BuildCo must provide transport to City Council o cers to and from the site. 14 Request and receive concrete inspection from the City Council o cers 1 day no charge Agency : City Council (Ministry of Lands) If the supervising consultants on site are registered engineers, architects or quantity surveyors, and they have good record of performance, sometimes they are left to supervise the construction and check the quality and standards without the City Council conducting an inspection, especially if the Council has a de ciency in technical sta . 15 Request and receive slabs inspection from the City Council o cers 1 day no charge Agency : City Council (Ministry of Lands) 16 Request and receive roof inspection from the City Council o cers 1 day no charge Agency : City Council (Ministry of Lands) Page 17   15 Request and receive slabs inspection from the City Council o cers 1 day no charge Agency : City Council (Ministry of Lands) Doing Business 2018 Tanzania 16 Request and receive roof inspection from the City Council o cers 1 day no charge Agency : City Council (Ministry of Lands) 17 Apply for occupancy permit from the City Council 1 day no charge Agency : City Council (Ministry of Lands) BuildCo must submit an application to request an Occupancy Certi cate along with the approved plans; the practical completion Certi cate issued by the consultants and copies of all stage approval from Municipal council during construction. There will be a site visit from the Municipal Building inspectors for building and re safety. 18 Request and receive inspection from the Fire Department once 1 day no charge construction is completed Agency : Fire Department 19 Obtain approval of the building from the Fire Department upon 14 days no charge completion Agency : Fire Department After receiving the inspection from the Fire Department, BuildCo receives a certi cate from the Fire Department. This certi cate is necessary in order to obtain an occupancy permit from City Council. 20 Receive inspection from the Health Department 1 day no charge Agency : Health Department 21 Obtain approval of the building from the health department upon 14 days no charge completion Agency : Health Department 22 Receive nal inspection from the City Council o cers 1 day no charge Agency : City Council (Ministry of Lands) 23 Obtain water and sewage connection from DawasCo 30 days TZS 3,000,000 Agency : DawasCo Obtain occupancy permit 14 days no charge 24 Agency : City Council (Ministry of Lands) Takes place simultaneously with previous procedure. Details – Dealing with Construction Permits in Tanzania – Measure of Quality Answer Score Building quality control index (0-15) 12.0 Quality of building regulations index (0-2) 2.0 How accessible are building laws and regulations in your economy? (0-1) Available online; 1.0 Free of charge. Which requirements for obtaining a building permit are clearly speci ed in the building List of required 1.0 Page 18   regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees Takes place simultaneously with previous procedure. Doing Business 2018 Tanzania Details – Dealing with Construction Permits in Tanzania – Measure of Quality Answer Score Building quality control index (0-15) 12.0 Quality of building regulations index (0-2) 2.0 How accessible are building laws and regulations in your economy? (0-1) Available online; 1.0 Free of charge. Which requirements for obtaining a building permit are clearly speci ed in the building List of required 1.0 regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid; Required preapprovals. Quality control before construction index (0-1) 1.0 Which third-party entities are required by law to verify that the building plans are in Licensed 1.0 compliance with existing building regulations? (0-1) engineer. Quality control during construction index (0-3) 2.0 What types of inspections (if any) are required by law to be carried out during Inspections by 1.0 construction? (0-2) in-house engineer; Inspections at various phases. Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0 inspections are always done in practice; Inspections are not mandated by law but commonly occur in practice during construction. Quality control after construction index (0-3) 3.0 Is there a nal inspection required by law to verify that the building was built in Yes, nal 2.0 accordance with the approved plans and regulations? (0-2) inspection is done by government agency; Yes, in- house engineer submits report for nal inspection; Final inspection is not required by law. Do legally mandated nal inspections occur in practice? (0-1) Final inspection 1.0 always occurs in practice. Page 19   inspection is not Doing Business 2018 Tanzania required by law. Do legally mandated nal inspections occur in practice? (0-1) Final inspection 1.0 always occurs in practice. Liability and insurance regimes index (0-2) 0.0 Which parties (if any) are held liable by law for structural aws or problems in the No party is held 0.0 building once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) liable under the law. Which parties (if any) are required by law to obtain an insurance policy to cover No party is 0.0 possible structural aws or problems in the building once it is in use (Latent Defect required by law Liability Insurance or Decennial Insurance)? (0-1) to obtain insurance . Professional certi cations index (0-4) 4.0 What are the quali cation requirements for the professional responsible for verifying Minimum 2.0 that the architectural plans or drawings are in compliance with existing building number of years regulations? (0-2) of experience; University degree in architecture or engineering; Being a registered architect or engineer; Passing a certi cation exam. What are the quali cation requirements for the professional who supervises the Minimum 2.0 construction on the ground? (0-2) number of years of experience; University degree in engineering, construction or construction management; Being a registered architect or engineer; Passing a certi cation exam. Getting Electricity This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tari s index measures reliability of supply, transparency of tari s and the price of electricity. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Page 20   What the indicators measure Case study assumptions certi cation exam. Doing Business 2018 Tanzania Getting Electricity This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tari s index measures reliability of supply, transparency of tari s and the price of electricity. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to obtain an electricity connection To make the data comparable across economies, several assumptions are (number) used. Submitting all relevant documents and obtaining The warehouse: all necessary clearances and permits - Is owned by a local entrepreneur and is used for storage of goods. Completing all required notifications and - Is located in the economy’s largest business city. For 11 economies the receiving all necessary inspections data are also collected for the second largest business city. Obtaining external installation works and possibly - Is located in an area where similar warehouses are typically located and is purchasing material for these works in an area with no physical constraints. For example, the property is not Concluding any necessary supply contract and near a railway. obtaining final supply - Is a new construction and is being connected to electricity for the rst time. Time required to complete each procedure - Has two stories with a total surface area of approximately 1,300.6 square (calendar days) meters (14,000 square feet). The plot of land on which it is built is 929 Is at least 1 calendar day square meters (10,000 square feet). Each procedure starts on a separate day Does not include time spent gathering The electricity connection: information - Is a permanent one with a three-phase, four-wire Y connection with a subscribed capacity of 140-kilo-volt-ampere (kVA) with a power factor of 1, Reflects the time spent in practice, with little when 1 kVA = 1 kilowatt (kW). follow-up and no prior contact with officials - Has a length of 150 meters. The connection is to either the low- or Cost required to complete each procedure (% of medium-voltage distribution network and is either overhead or income per capita) underground, whichever is more common in the area where the Official costs only, no bribes warehouse is located and requires works that involve the crossing of a 10- meter road (such as by excavation or overhead lines) but are all carried out Value added tax excluded on public land. There is no crossing of other owners’ private property The reliability of supply and transparency of because the warehouse has access to a road. tari s index (0-8) - Does not require work to install the internal wiring of the warehouse. This has already been completed up to and including the customer’s service Duration and frequency of power outages (0–3) panel or switchboard and the meter base. Tools to monitor power outages (0–1) Tools to restore power supply (0–1) The monthly consumption: Regulatory monitoring of utilities’ performance - It is assumed that the warehouse operates 30 days a month from 9:00 (0–1) a.m. to 5:00 p.m. (8 hours a day), with equipment utilized at 80% of capacity Financial deterrents limiting outages (0–1) on average and that there are no electricity cuts (assumed for simplicity reasons) and the monthly energy consumption is 26,880 kilowatt-hours Transparency and accessibility of tariffs (0–1) (kWh); hourly consumption is 112 kWh. Price of electricity (cents per kilowatt-hour)* - If multiple electricity suppliers exist, the warehouse is served by the Price based on monthly bill for commercial cheapest supplier. warehouse in case study - Tari s e ective in March of the current year are used for calculation of the price of electricity for the warehouse. Although March has 31 days, for * N o t e : Doing Business m e a s u r e s t h e p r i c e o f calculation purposes only 30 days are used. electricity, but it is not included in the distance to frontier score nor the ranking on the ease of getting electricity. Page 21   Standardized Connection frontier score nor the ranking on the ease of getting electricity. Doing Business 2018 Tanzania Standardized Connection Price of electricity (US cents per kWh) 13.3 Name of utility Tanesco City Covered Dar es Salaam Sub-Saharan OECD high Indicator Tanzania Africa income Overall Best Performer Procedures (number) 4 5.3 4.7 2 (United Arab Emirates) Time (days) 109 115.3 79.1 10 (United Arab Emirates) Cost (% of income per capita) 843.8 3737.0 63.0 0.00 (Japan) Reliability of supply and transparency of tariff 5 0.9 7.4 8.00 (28 Economies) index (0-8) Figure – Getting Electricity in Tanzania and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 76.68: Kenya (Rank: 71) 73.96: Tanzania (Rank: 82) 59.38: Botswana (Rank: 124) 52.54: Mozambique (Rank: 150) 45.91: Regional Average (Sub-Saharan Africa) 43.43: Malawi (Rank: 166) Note: The ranking of economies on the ease of getting electricity is determined by sorting their distance to frontier scores for getting electricity. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Getting Electricity in Tanzania – Procedure, Time and Cost Time Cost 900 100 800 Cost (% of income per capita) 700 80 600 Time (days) 60 500 400 40 300 200 20 Page 22   100 getting electricity. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Tanzania Figure – Getting Electricity in Tanzania – Procedure, Time and Cost Time Cost 900 100 800 Cost (% of income per capita) 700 80 600 Time (days) 60 500 400 40 300 200 20 100 0 0 1 2 3 4 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Getting Electricity in Tanzania and comparator economies – Measure of Quality 6 5 5 4 4 Index score 3 2 0.9 1 0 0 0 0 Tanzania Botswana Kenya Malawi Mozambique Sub-Saharan Africa Details – Getting Electricity in Tanzania – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Submit application to Tanesco and await estimate 11 calendar days TZS 0 Agency : Tanzania Electric Supply Company Limited - Tanesco The common practice is to submit the application in person. The following documents are required for application: passport size photo of the customer, electrical drawings of the wiring. The documents do not need notarization. The electrician who did the internal wiring also submits a signed noti cation that the internal wiring is done according to safety standards. 2 Receive external inspection by Tanesco 7 calendar days USD 0 Agency : Tanzania Electric Supply Company Limited - Tanesco Page 23   Tanzania Botswana Kenya Malawi Mozambique Sub-Saharan Africa Doing Business 2018 Tanzania Details – Getting Electricity in Tanzania – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Submit application to Tanesco and await estimate 11 calendar days TZS 0 Agency : Tanzania Electric Supply Company Limited - Tanesco The common practice is to submit the application in person. The following documents are required for application: passport size photo of the customer, electrical drawings of the wiring. The documents do not need notarization. The electrician who did the internal wiring also submits a signed noti cation that the internal wiring is done according to safety standards. 2 Receive external inspection by Tanesco 7 calendar days USD 0 Agency : Tanzania Electric Supply Company Limited - Tanesco An external site inspection is necessary. Someone from the customer’s party has to be present, in particular the electrician who carried out the wiring works. Generally the presence of someone from the customer’s party becomes necessary because most parts of Dar es Salaam have no elaborate road network and no street names. 3 Purchase transformer and carry out external works 90 calendar days TZS 16,010,196.93 Agency : Electrical Contractor The customer pays a connection fee which includes a security deposit. The customer can purchase the material and carries out the external connection works. 4 Receive internal inspection, meter installation and nal connection by 1 calendar day TZS 0 Tanesco Agency : Tanzania Electric Supply Company Limited - Tanesco The internal wiring is done by a licensed electrician. The electrician must be licensed with the Electricity Licensing Board (ELCB) but also work under a rm registered by the Contractors Registration Board (CRB). The inspection of the internal wiring is carried out before the nal connection by the electricity supplier (Tanesco). The inspection does not have to be requested. The electrician who did the internal wiring has to be present during the inspection. The utility does the nal connection and installs the meter. Takes place simultaneously with previous procedure. Details – Getting Electricity in Tanzania – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 5 Total duration and frequency of outages per customer a year (0-3) 0 System average interruption duration index (SAIDI) 24.9 System average interruption frequency index (SAIFI) 10.8 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 4.0 Page 24   Mechanisms for monitoring outages (0-1) 1 Takes place simultaneously with previous procedure. Doing Business 2018 Tanzania Details – Getting Electricity in Tanzania – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 5 Total duration and frequency of outages per customer a year (0-3) 0 System average interruption duration index (SAIDI) 24.9 System average interruption frequency index (SAIFI) 10.8 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 4.0 Mechanisms for monitoring outages (0-1) 1 Does the distribution utility use automated tools to monitor outages? Yes Mechanisms for restoring service (0-1) 1 Does the distribution utility use automated tools to restore service? Yes Regulatory monitoring (0-1) 1 Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on Yes reliability of supply? Financial deterrents aimed at limiting outages (0-1) 1 Does the utility either pay compensation to customers or face nes by the regulator (or both) if outages Yes exceed a certain cap? Communication of tari s and tari changes (0-1) 1 Are e ective tari s available online? Yes Link to the website, if available online http://www.tanesco. co.tz/index.php/cust omer-service/tari s Are customers noti ed of a change in tari ahead of the billing cycle? Yes Note: If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tari index. If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index. If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Registering Property This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has ve dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Page 25   What the indicators measure Case study assumptions If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Doing Business 2018 Tanzania Registering Property This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has ve dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally transfer title on immovable To make the data comparable across economies, several assumptions property (number) about the parties to the transaction, the property and the procedures are used. Preregistration procedures (for example, checking for liens, notarizing sales agreement, The parties (buyer and seller): paying property transfer taxes) - Are limited liability companies (or the legal equivalent). Registration procedures in the economy's largest - Are located in the periurban area of the economy’s largest business city. business citya. For 11 economies the data are also collected for the second largest Postregistration procedures (for example, filling business city. title with municipality) - Are 100% domestically and privately owned. Time required to complete each procedure - Have 50 employees each, all of whom are nationals. (calendar days) - Perform general commercial activities. Does not include time spent gathering information The property (fully owned by the seller): - Has a value of 50 times income per capita, which equals the sale price. Each procedure starts on a separate day - though - Is fully owned by the seller. procedures that can be fully completed online - Has no mortgages attached and has been under the same ownership for are an exception to this rule the past 10 years. Procedure is considered completed once final - Is registered in the land registry or cadastre, or both, and is free of title document is received disputes. No prior contact with officials - Is located in a periurban commercial zone, and no rezoning is required. Cost required to complete each procedure (% of - Consists of land and a building. The land area is 557.4 square meters property value) (6,000 square feet). A two-story warehouse of 929 square meters (10,000 square feet) is located on the land. The warehouse is 10 years old, is in Official costs only (such as administrative fees, good condition, has no heating system and complies with all safety duties and taxes). standards, building codes and legal requirements. The property, Value Added Tax, Capital Gains Tax and illicit consisting of land and building, will be transferred in its entirety. payments are excluded - Will not be subject to renovations or additional construction following the purchase. Quality of land administration index (0-30) - Has no trees, natural water sources, natural reserves or historical Reliability of infrastructure index (0-8) monuments of any kind. Transparency of information index (0–6) - Will not be used for special purposes, and no special permits, such as for Geographic coverage index (0–8) residential use, industrial plants, waste storage or certain types of agricultural activities, are required. Land dispute resolution index (0–8) - Has no occupants, and no other party holds a legal interest in it. Equal access to property rights index (-2–0) Standard Property Transfer Property value TZS 94,867,471.60 City Covered Dar es Salaam Page 26   Sub-Saharan OECD high Doing Business 2018 Tanzania Standard Property Transfer Property value TZS 94,867,471.60 City Covered Dar es Salaam Sub-Saharan OECD high Indicator Tanzania Africa income Overall Best Performer Procedures (number) 8 6.2 4.6 1.00 (4 Economies) Time (days) 67 59.3 22.3 1.00 (3 Economies) Cost (% of property value) 5.2 7.8 4.2 0.00 (5 Economies) Quality of the land administration index (0-30) 7.5 8.6 22.7 29.00 (Singapore) Figure – Registering Property in Tanzania and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 65.45: Botswana (Rank: 81) 62.45: Malawi (Rank: 96) 59.27: Mozambique (Rank: 104) 54.49: Kenya (Rank: 125) 51.71: Regional Average (Sub-Saharan Africa) 50.13: Tanzania (Rank: 142) Note: The ranking of economies on the ease of registering property is determined by sorting their distance to frontier scores for registering property. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Registering Property in Tanzania – Procedure, Time and Cost Time Cost 3.5 60 3 Cost (% of property value) 50 2.5 Time (days) 40 2 30 1.5 20 1 10 0.5 0 0 1 *2 *3 4 5 6 7 8 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Page 27   Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for registering property. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Tanzania Figure – Registering Property in Tanzania – Procedure, Time and Cost Time Cost 3.5 60 3 Cost (% of property value) 50 2.5 Time (days) 40 2 30 1.5 20 1 10 0.5 0 0 1 *2 *3 4 5 6 7 8 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Registering Property in Tanzania and comparator economies – Measure of Quality 18 16.0 16 14 12 Index score 10.0 10.5 9.5 10 8.6 7.5 8 6 4 2 0 Tanzania Botswana Kenya Malawi Mozambique Sub-Saharan Africa Details – Registering Property in Tanzania – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain an o cial search at the Land Registry 7 days TZS 40,000 Agency : Registry of Titles (simultaneous with procedures 2 and The seller must conduct a search of any encumbrance before starting the 3) transaction formally. The document obtained does not necessarily show all the owners of the property in the last 10 years. In practice, the buyer conducts the search to obtain con rmation of the ownership status and encumbrances registered on the property. 2 Submit application letter to obtain evaluation at Ministry of Lands or 7 days (1 day to The official valuation Local Government Authority submit application fee is calculated by Agency : Ministry of Lands or Local Government Authority + 6-day waiting using the following Page 28   period for formula: (Property Tanzania Botswana Kenya Malawi Mozambique Sub-Saharan Africa Doing Business 2018 Tanzania Details – Registering Property in Tanzania – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain an o cial search at the Land Registry 7 days TZS 40,000 Agency : Registry of Titles (simultaneous with procedures 2 and The seller must conduct a search of any encumbrance before starting the 3) transaction formally. The document obtained does not necessarily show all the owners of the property in the last 10 years. In practice, the buyer conducts the search to obtain con rmation of the ownership status and encumbrances registered on the property. 2 Submit application letter to obtain evaluation at Ministry of Lands or 7 days (1 day to The official valuation Local Government Authority submit application fee is calculated by Agency : Ministry of Lands or Local Government Authority + 6-day waiting using the following period for formula: (Property The seller can request the valuation report at the Ministry of Lands. The evaluation Value – 200,000) * valuation report will be prepared by the Ministry of Lands or Local appointment) (1.25/1,000) + 550 + Government Authority (valuation department) and sent to a government (simultaneous with valuation approval valuer for approval. Regardless, nal approval must be given by the Chief Government Valuer. It does not necessarily include or re ect cadastral value Procedures 1 and fee of 0.01% of of the property. Valuation of the property is for purposes of ascertaining 3) property value stamp duty and Capital Gains Tax. The documentation shall include: • Property title issued by the Land O ce and/or Land Registry • Cadastral map/plan of the property prepared by an architect if it is a lease of part of the property such as a at in a block building 3 Obtain land rent clearance from the Land Ministry showing payment of 1 day no cost rents (simultaneous with Agency : Land Ministry or Local Government Authority Procedures 1, and 2) The seller is required to obtain a land rent clearance from the Land Ministry, showing that all land rents have been paid 4 A government valuer inspects the property to con rm its value 7 days (1 day to Paid in Procedure 2 Agency : Ministry of Lands complete valuation + 6-day waiting A government surveyor must determine the value of the property and, period for delivery where necessary, establish a cadastral value and prepare a cadastral plan. In of valuation report). certain instances, the Chief Government Surveyor may inspect the property valued to con rm that the valuation report accurately re ects the correct property value. The valuation report must be approved by the Chief Government Surveyor. 5 Notarization and execution of the sale agreement and preparation of 1 day Approximately 3% of the transfer deed property value Agency : Ministry of Lands or Private Advocate A lawyer usually prepares and notarizes the sale agreement, and prepares the transfer deed, which takes about two days. Notarization of the sale agreement is mandatory. The process can be delayed if the seller fails to provide all the necessary documents for the preparation of the sale agreement and transfer deed. The process can also be delayed if the parties take a long time to negotiate and execute the documents. The cost of preparation is o cially 3%, however this is negotiable with the lawyers involved. Page 29   property value. The valuation report must be approved by the Chief Doing Government Surveyor. Business 2018 Tanzania 5 Notarization and execution of the sale agreement and preparation of 1 day Approximately 3% of the transfer deed property value Agency : Ministry of Lands or Private Advocate A lawyer usually prepares and notarizes the sale agreement, and prepares the transfer deed, which takes about two days. Notarization of the sale agreement is mandatory. The process can be delayed if the seller fails to provide all the necessary documents for the preparation of the sale agreement and transfer deed. The process can also be delayed if the parties take a long time to negotiate and execute the documents. The cost of preparation is o cially 3%, however this is negotiable with the lawyers involved. 6 Obtain approval for the transfer 14-21 days TZS 5,000 approval Agency : Commissioner of Lands fee This stage involves obtaining approval from the Commissioner of Lands for the disposition of the property. Documentation shall include: • Original Certi cate of Title/Letter of O er • Original Land Rent receipt for the relevant year • Original Valuation Report • Original Valuation Approval receipt • Transfer forms • Form 30 (form for Application of grant of approval for disposition) Together with form 30, the applicant will also be required to submit forms 29 and 35. Depending on the total asset value of the seller and buyer, an application to the Fair Competition Commission for approval may also be required. The current threshold is T.Shs 800 million. • Copy of Passport/birth certi cate (of two directors of the seller and buyer) • Certi cate of Incorporation and Memorandum and Articles of Association of the Company (seller and buyer) • Board Resolution approving the disposition of the property in respect of the seller and Board resolution approving the purchase in respect of the buyer. 7 Obtain a capital gains tax certi cate from the Tanzania Revenue 14-21 days Capital Gains tax is Authority calculated as 10% of Agency : Tanzania Revenue Authority the amount gained by the Buying A Capital Gains Tax Clearance Certi cate is obtained from the Tanzania Company Revenue Authority before the name of buyer is recorded in the Land O ce or the Land Registry. 8 The transfer deed is delivered to the Registrar of Titles for its recording 14 days 1% of property value under the name of the buyer at the Lands Registry (Stamp duty) + Agency : Registry of Titles Registration Fee as follows: registration The transfer deed is delivered to the Registrar of Titles for its recording fee (1% of the under the name of the buyer at the Land registry. The Registrar of Titles also property value + 500 ensures that all the other taxes in respect of the property have been settled for the instrument) including Capital Gains Tax described in the procedure above. Once all these fees are paid the transfer is then registered and the buyer is recorded as the owner of the property. Documentation Requirements: • Notarized sale agreement and transfer deed Page 30   Company Revenue Authority before the name of buyer is recorded in the Land O ce Doing or the Land Registry. Business 2018 Tanzania 8 The transfer deed is delivered to the Registrar of Titles for its recording 14 days 1% of property value under the name of the buyer at the Lands Registry (Stamp duty) + Agency : Registry of Titles Registration Fee as follows: registration The transfer deed is delivered to the Registrar of Titles for its recording fee (1% of the under the name of the buyer at the Land registry. The Registrar of Titles also property value + 500 ensures that all the other taxes in respect of the property have been settled for the instrument) including Capital Gains Tax described in the procedure above. Once all these fees are paid the transfer is then registered and the buyer is recorded as the owner of the property. Documentation Requirements: • Notarized sale agreement and transfer deed • Capital Gains Tax clearance certi cate from the TRA • Consent letter from the Commissioner of Lands • The original title deed • Proof of payment of all necessary fees, i.e. land rent and registration fees Takes place simultaneously with previous procedure. Details – Registering Property in Tanzania – Measure of Quality Answer Score Quality of the land administration index (0-30) 7.5 Reliability of infrastructure index (0-8) 0.0 What is the institution in charge of immovable property registration? Registry of Titles, Ministry of Lands, Housing & Human Settlements Development In what format are the majority of title or deed records kept in the largest business city Paper 0.0 —in a paper format or in a computerized format (scanned or fully digital)? Is there an electronic database for checking for encumbrances (liens, mortgages, No 0.0 restrictions and the like)? Institution in charge of the plans showing legal boundaries in the largest business city: Surveys and Mapping Department, Ministry of Lands In what format are the majority of maps of land plots kept in the largest business city— Paper 0.0 in a paper format or in a computerized format (scanned or fully digital)? Is there an electronic database for recording boundaries, checking plans and providing No 0.0 cadastral information (geographic information system)? Page 31   Is the information recorded by the immovable property registration agency and the Separate 0.0 Takes place simultaneously with previous procedure. Doing Business 2018 Tanzania Details – Registering Property in Tanzania – Measure of Quality Answer Score Quality of the land administration index (0-30) 7.5 Reliability of infrastructure index (0-8) 0.0 What is the institution in charge of immovable property registration? Registry of Titles, Ministry of Lands, Housing & Human Settlements Development In what format are the majority of title or deed records kept in the largest business city Paper 0.0 —in a paper format or in a computerized format (scanned or fully digital)? Is there an electronic database for checking for encumbrances (liens, mortgages, No 0.0 restrictions and the like)? Institution in charge of the plans showing legal boundaries in the largest business city: Surveys and Mapping Department, Ministry of Lands In what format are the majority of maps of land plots kept in the largest business city— Paper 0.0 in a paper format or in a computerized format (scanned or fully digital)? Is there an electronic database for recording boundaries, checking plans and providing No 0.0 cadastral information (geographic information system)? Is the information recorded by the immovable property registration agency and the Separate 0.0 cadastral or mapping agency kept in a single database, in di erent but linked databases databases or in separate databases? Do the immovable property registration agency and cadastral or mapping agency use No 0.0 the same identi cation number for properties? Transparency of information index (0–6) 2.5 Who is able to obtain information on land ownership at the agency in charge of Anyone who 1.0 immovable property registration in the largest business city? pays the o cial fee Is the list of documents that are required to complete any type of property transaction Yes, on public 0.5 made publicly available–and if so, how? boards Link for online access: Is the applicable fee schedule for any property transaction at the agency in charge of Yes, on public 0.5 immovable property registration in the largest business city made publicly available– boards and if so, how? Link for online access: Does the agency in charge of immovable property registration commit to delivering a Yes, in person 0.0 legally binding document that proves property ownership within a speci c time frame– and if so, how does it communicate the service standard? Page 32   Link for Doing online access: Business 2018 Tanzania Does the agency in charge of immovable property registration commit to delivering a Yes, in person 0.0 legally binding document that proves property ownership within a speci c time frame– and if so, how does it communicate the service standard? Link for online access: Is there a speci c and separate mechanism for ling complaints about a problem that No 0.0 occurred at the agency in charge of immovable property registration? Contact information: Are there publicly available o cial statistics tracking the number of transactions at the No 0.0 immovable property registration agency? Number of property transfers in the largest business city in 2015: Who is able to consult maps of land plots in the largest business city? Records are not 0.0 publicly available Is the applicable fee schedule for accessing maps of land plots made publicly available Yes, on public 0.5 —and if so, how? boards Link for online access: Does the cadastral or mapping agency commit to delivering an updated map within a No 0.0 speci c time frame—and if so, how does it communicate the service standard? Link for online access: Is there a speci c and separate mechanism for ling complaints about a problem that No 0.0 occurred at the cadastral or mapping agency? Contact information: Geographic coverage index (0–8) 0.0 Are all privately held land plots in the economy formally registered at the immovable No 0.0 property registry? Are all privately held land plots in the largest business city formally registered at the No 0.0 immovable property registry? Are all privately held land plots in the economy mapped? No 0.0 Are all privately held land plots in the largest business city mapped? No 0.0 Land dispute resolution index (0–8) 5.0 Does the law require that all property sale transactions be registered at the immovable Yes 1.5 property registry to make them opposable to third parties? Is the system of immovable property registration subject to a state or private Yes 0.5 guarantee? Is there a speci c compensation mechanism to cover for losses incurred by parties who No 0.0 engaged in good faith in a property transaction based on erroneous information certi ed by the immovable property registry? Does the legal system require a control of legality of the documents necessary for a Yes 0.5 property transaction (e.g., checking the compliance of contracts with requirements of Page 33   the law)? engaged in good faith in a property transaction based on erroneous information ed by the immovable certi Business Doing property registry? 2018 Tanzania Does the legal system require a control of legality of the documents necessary for a Yes 0.5 property transaction (e.g., checking the compliance of contracts with requirements of the law)? If yes, who is responsible for checking the legality of the documents? Registrar; Notary; Lawyer; Interested Parties. Does the legal system require veri cation of the identity of the parties to a property Yes 0.5 transaction? If yes, who is responsible for verifying the identity of the parties? Registrar; Notary; Lawyer; Interested Parties. Is there a national database to verify the accuracy of identity documents? No 0.0 For a standard land dispute between two local businesses over tenure rights of a High Court, Land property worth 50 times gross national income (GNI) per capita and located in the Division largest business city, what court would be in charge of the case in the rst instance? How long does it take on average to obtain a decision from the rst-instance court for Between 1 and 2 2.0 such a case (without appeal)? years Are there any statistics on the number of land disputes in the rst instance? No 0.0 Number of land disputes in the largest business city in 2015: Equal access to property rights index (-2–0) 0.0 Do unmarried men and unmarried women have equal ownership rights to property? Yes 0.0 Do married men and married women have equal ownership rights to property? Yes 0.0 Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the e ectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Strength of legal rights index (0–12) Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions Rights of borrowers and lenders through through 2 sets of indicators. The depth of credit information index collateral laws (0-10) measures rules and practices a ecting the coverage, scope and Protection of secured creditors’ rights through accessibility of credit information available through a credit registry or a bankruptcy laws (0-2) credit bureau. The strength of legal rights index measures the degree to Depth of credit information index (0–8) which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first determined Scope and accessibility of credit information whether a unitary secured transactions system exists. Then two case distributed by credit bureaus and credit scenarios, case A and case B, are used to determine how a nonpossessory registries (0-8) security interest is created, publicized and enforced according to the law. Credit bureau coverage (% of adults) Special emphasis is given to how the collateral registry operates (if Number of individuals and firms listed in largest registration of security interests is possible). The case scenarios involve a Page 34   secured borrower, company ABC, and a secured lender, BizBank. Do married men and married women have equal ownership rights to property? Yes 0.0 Doing Business 2018 Tanzania Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the e ectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Strength of legal rights index (0–12) Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions Rights of borrowers and lenders through through 2 sets of indicators. The depth of credit information index collateral laws (0-10) measures rules and practices a ecting the coverage, scope and Protection of secured creditors’ rights through accessibility of credit information available through a credit registry or a bankruptcy laws (0-2) credit bureau. The strength of legal rights index measures the degree to Depth of credit information index (0–8) which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first determined Scope and accessibility of credit information whether a unitary secured transactions system exists. Then two case distributed by credit bureaus and credit scenarios, case A and case B, are used to determine how a nonpossessory registries (0-8) security interest is created, publicized and enforced according to the law. Credit bureau coverage (% of adults) Special emphasis is given to how the collateral registry operates (if Number of individuals and firms listed in largest registration of security interests is possible). The case scenarios involve a credit bureau as a percentage of adult population secured borrower, company ABC, and a secured lender, BizBank. Credit registry coverage (% of adults) In some economies the legal framework for secured transactions will allow Number of individuals and firms listed in credit only case A or case B (not both) to apply. Both cases examine the same set registry as a percentage of adult population of legal provisions relating to the use of movable collateral. Several assumptions about the secured borrower (ABC) and lender (BizBank) are used: - ABC is a domestic limited liability company (or its legal equivalent). - ABC has up to 50 employees. - ABC has its headquarters and only base of operations in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city. - Both ABC and BizBank are 100% domestically owned. The case scenarios also involve assumptions. In case A, as collateral for the loan, ABC grants BizBank a nonpossessory security interest in one category of movable assets, for example, its machinery or its inventory. ABC wants to keep both possession and ownership of the collateral. In economies where the law does not allow nonpossessory security interests in movable property, ABC and BizBank use a fiduciary transfer-of-title arrangement (or a similar substitute for nonpossessory security interests). In case B, ABC grants BizBank a business charge, enterprise charge, floating charge or any charge that gives BizBank a security interest over ABC’s combined movable assets (or as much of ABC’s movable assets as possible). ABC keeps ownership and possession of the assets. Sub-Saharan OECD high Indicator Tanzania Africa income Overall Best Performer Strength of legal rights index (0-12) 5 5.1 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 8 3.0 6.6 8.00 (34 Economies) Page 35   Credit registry coverage (% of adults) 0.0 6.3 18.3 100.00 (3 Economies) possible). ABC keeps ownership and possession of the assets. Doing Business 2018 Tanzania Sub-Saharan OECD high Indicator Tanzania Africa income Overall Best Performer Strength of legal rights index (0-12) 5 5.1 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 8 3.0 6.6 8.00 (34 Economies) Credit registry coverage (% of adults) 0.0 6.3 18.3 100.00 (3 Economies) Credit bureau coverage (% of adults) 6.2 8.2 63.7 100.00 (23 Economies) Figure – Getting Credit in Tanzania and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 90.00: Malawi (Rank: 6) 75.00: Kenya (Rank: 29) 65.00: Tanzania (Rank: 55) 55.00: Botswana (Rank: 77) 40.73: Regional Average (Sub-Saharan Africa) 25.00: Mozambique (Rank: 159) Note: The ranking of economies on the ease of getting credit is determined by sorting their distance to frontier scores for getting credit. These scores are the distance to frontier score for the sum of the strength of legal rights index and the depth of credit information index. Figure – Legal Rights in Tanzania and comparator economies 12 11 10 8 Index score 7 6 5 5 5.1 4 2 1 0 Tanzania Botswana Kenya Malawi Mozambique Sub-Saharan Africa Details – Legal Rights in Tanzania Strength of legal rights index (0-12) 5 Does an integrated or uni ed legal framework for secured transactions that extends to the creation, publicity and No enforcement of functional equivalents to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without Yes requiring a speci c description of collateral? Page 36   Tanzania Botswana Kenya Malawi Mozambique Sub-Saharan Africa Doing Business 2018 Tanzania Details – Legal Rights in Tanzania Strength of legal rights index (0-12) 5 Does an integrated or uni ed legal framework for secured transactions that extends to the creation, publicity and No enforcement of functional equivalents to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without Yes requiring a speci c description of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring Yes a speci c description of collateral? May a security right extend to future or after-acquired assets, and does it extend automatically to the products, proceeds Yes or replacements of the original assets? Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and Yes obligations be secured between parties; and can the collateral agreement include a maximum amount for which the assets are encumbered? Is a collateral registry in operation for both incorporated and non-incorporated entities, that is uni ed geographically No and by asset type, with an electronic database indexed by debtor's name? Does a notice-based collateral registry exist in which all functional equivalents can be registered? No Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be No performed online by any interested third party? Are secured creditors paid rst (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency No procedure? Are secured creditors paid rst (i.e. before tax claims and employee claims) when a business is liquidated? No Are secured creditors subject to an automatic stay on enforcement when a debtor enters a court-supervised No reorganization procedure? Does the law protect secured creditors’ rights by providing clear grounds for relief from the stay and/or sets a time limit for it? Does the law allow parties to agree on out of court enforcement at the time a security interest is created? Does the law Yes allow the secured creditor to sell the collateral through public auction or private tender, as well as, for the secured creditor to keep the asset in satisfaction of the debt? Figure – Credit Information in Tanzania and comparator economies 10 8 8 8 7 Index score 6 6 4 4 3.0 2 0 Tanzania Botswana Kenya Malawi Mozambique Sub-Saharan Africa Details – Credit Information in Tanzania Page 37   0 Tanzania Doing Business 2018 Botswana Tanzania Kenya Malawi Mozambique Sub-Saharan Africa Details – Credit Information in Tanzania Credit Credit Depth of credit information index (0-8) bureau registry Score Are data on both firms and individuals distributed? Yes No 1 Are both positive and negative credit data distributed? Yes No 1 Are data from retailers or utility companies - in addition to data from banks and financial institutions - Yes No 1 distributed? Are at least 2 years of historical data distributed? (Credit bureaus and registries that distribute more Yes No 1 than 10 years of negative data or erase data on defaults as soon as they are repaid obtain a score of 0 for this component.) Are data on loan amounts below 1% of income per capita distributed? Yes No 1 By law, do borrowers have the right to access their data in the credit bureau or credit registry? Yes No 1 Can banks and financial institutions access borrowers’ credit information online (for example, Yes No 1 through an online platform, a system-to-system connection or both)? Are bureau or registry credit scores offered as a value-added service to help banks and financial Yes No 1 institutions assess the creditworthiness of borrowers? Score ("yes" to either public bureau or private registry) 8 Note: An economy receives a score of 1 if there is a "yes" to either bureau or registry. If the credit bureau or registry is not operational or covers less than 5% of the adult population, the total score on the depth of credit information index is 0. Coverage Credit bureau Credit registry Number of individuals 1,729,761 0 Number of firms 58,055 0 Total 1,787,816 0 Percentage of adult population 6.2 0.0 Protecting Minority Investors This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Extent of disclosure index (0–10): Review and To make the data comparable across economies, a case study uses several approval requirements for related-party assumptions about the business and the transaction. transactions; Disclosure requirements for related-party transactions The business (Buyer): Extent of director liability index (0–10): Ability of - Is a publicly traded corporation listed on the economy’s most important minority shareholders to sue and hold interested stock exchange. If the number of publicly traded companies listed on that directors liable for prejudicial related-party exchange is less than 10, or if there is no stock exchange in the economy, it is assumed that Buyer is a large private company with multiple Page 38   transactions; Available legal remedies (damages, Percentage of adult population 6.2 0.0 Doing Business 2018 Tanzania Protecting Minority Investors This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Extent of disclosure index (0–10): Review and To make the data comparable across economies, a case study uses several approval requirements for related-party assumptions about the business and the transaction. transactions; Disclosure requirements for related-party transactions The business (Buyer): Extent of director liability index (0–10): Ability of - Is a publicly traded corporation listed on the economy’s most important minority shareholders to sue and hold interested stock exchange. If the number of publicly traded companies listed on that directors liable for prejudicial related-party exchange is less than 10, or if there is no stock exchange in the economy, it transactions; Available legal remedies (damages, is assumed that Buyer is a large private company with multiple disgorgement of profits, fines, imprisonment, shareholders. rescission of the transaction) - Has a board of directors and a chief executive o cer (CEO) who may legally act on behalf of Buyer where permitted, even if this is not speci cally Ease of shareholder suits index (0–10): Access to required by law. internal corporate documents; Evidence - Has a supervisory board (applicable to economies with a two-tier board obtainable during trial and allocation of legal system) on which 60% of the shareholder-elected members have been expenses appointed by Mr. James, who is Buyer’s controlling shareholder and a Extent of conflict of interest regulation index member of Buyer’s board of directors. (0–10): Simple average of the extent of disclosure, - Has not adopted any bylaws or articles of association that di er from extent of director liability and ease of default minimum standards and does not follow any nonmandatory codes, shareholder indices principles, recommendations or guidelines relating to corporate Extent of shareholder rights index (0-10): governance. Shareholders’ rights and role in major corporate - Is a manufacturing company with its own distribution network. decisions Extent of ownership and control index (0-10): The transaction involves the following details: Governance safeguards protecting shareholders - Mr. James owns 60% of Buyer and elected two directors to Buyer’s ve- from undue board control and entrenchment member board. Extent of corporate transparency index (0-10): - Mr. James also owns 90% of Seller, a company that operates a chain of Corporate transparency on ownership stakes, retail hardware stores. Seller recently closed a large number of its stores. compensation, audits and financial prospects - Mr. James proposes that Buyer purchase Seller’s unused eet of trucks to expand Buyer’s distribution of its food products, a proposal to which Buyer Extent of shareholder governance index (0–10): agrees. The price is equal to 10% of Buyer’s assets and is higher than the Simple average of the extent of shareholders market value. rights, extent of ownership and control and - The proposed transaction is part of the company’s ordinary course of extent of corporate transparency indices business and is not outside the authority of the company. Strength of minority investor protection index - Buyer enters into the transaction. All required approvals are obtained, (0–10): Simple average of the extent of conflict of and all required disclosures made (that is, the transaction is not interest regulation and extent of shareholder fraudulent). governance indices - The transaction causes damages to Buyer. Shareholders sue Mr. James and the other parties that approved the transaction. Sub-Saharan OECD high Indicator Tanzania Africa income Overall Best Performer Extent of conflict of interest regulation index (0- 5.3 4.8 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 3.7 4.0 6.4 Page 39   9.00 (Kazakhstan) and the other parties that approved the transaction. Doing Business 2018 Tanzania Sub-Saharan OECD high Indicator Tanzania Africa income Overall Best Performer Extent of conflict of interest regulation index (0- 5.3 4.8 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 3.7 4.0 6.4 9.00 (Kazakhstan) Figure – Protecting Minority Investors in Tanzania and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 58.33: Kenya (Rank: 62) 56.67: Botswana (Rank: 76) 51.67: Malawi (Rank: 96) 45.00: Tanzania (Rank: 129) 43.72: Regional Average (Sub-Saharan Africa) 41.67: Mozambique (Rank: 138) Note: The ranking of economies on the strength of minority investor protections is determined by sorting their distance to frontier scores for protecting minority investors. These scores are the simple average of the distance to frontier scores for the extent of con ict of interest regulation index and the extent of shareholder governance index. Figure – Protecting Minority Investors in Tanzania and comparator economies – Measure of Quality Tanzania 5 6 2 2 4 8 Botswana 7 8 7 3 6 3 Kenya 4 5 6 6 5 9 Malawi 4 7 4 2 7 7 Mozambique 1 4 5 2 6 7 OECD high income 7.3 5.6 6.5 5.2 6.3 7.4 Sub-Saharan Africa 4.2 3.5 5.5 3.3 4.6 5.6 0 5 10 15 20 25 30 35 40 Sub-Indicator Score Extent of corporate transparency index (0­10) Extent of director liability index (0­10) Extent of disclosure index (0­10) Extent of ownership and control index (0­10) Extent of shareholder rights index (0­10) Ease of shareholder suits index (0­10) Details – Protecting Minority Investors in Tanzania – Measure of Quality Answer Score Page 40   Extent of ownership and control index (0­10) Extent of shareholder rights index (0­10) Ease of shareholder suits index (0­10) Doing Business 2018 Tanzania Details – Protecting Minority Investors in Tanzania – Measure of Quality Answer Score Extent of con ict of interest regulation index (0-10) 5.3 Extent of disclosure index (0-10) 2 Which corporate body is legally su cient to approve the Buyer-Seller transaction? (0-3) Shareholders or 1.0 board of directors including interested parties Must an external body review the terms of the transaction before it takes place? (0-1) No 0.0 Must Mr. James disclose his con ict of interest to the board of directors? (0-2) Existence of a 1.0 con ict without any speci cs Must Buyer disclose the transaction in published periodic lings (annual reports)? (0-2) No disclosure 0.0 obligation Must Buyer immediately disclose the transaction to the public and/or shareholders? (0- No disclosure 0.0 2) obligation Extent of director liability index (0-10) 6 Can shareholders representing 10% of Buyer's share capital sue directly or derivatively Yes 1.0 for the damage the transaction caused to Buyer? (0-1) Can shareholders hold the interested director liable for the damage the transaction Liable if unfair or 2.0 caused to Buyer? (0-2) prejudicial Can shareholders hold the other directors liable for the damage the transaction caused Liable if unfair or 2.0 to Buyer (0-2) prejudicial Must Mr. James pay damages for the harm caused to Buyer upon a successful claim by Yes 1.0 shareholders? (0-1) Must Mr. James repay pro ts made from the transaction upon a successful claim by No 0.0 shareholders? (0-1) Is Mr. James disquali ed or ned and imprisoned upon a successful claim by No 0.0 shareholders? (0-1) Can a court void the transaction upon a successful claim by shareholders? (0-2) Only in case of 0.0 fraud or bad faith Ease of shareholder suits index (0-10) 8 Before suing can shareholders representing 10% of Buyer's share capital inspect the Yes 1.0 transaction documents? (0-1) Can the plainti obtain any documents from the defendant and witnesses at trial? (0-3) Any relevant 3.0 document Can the plainti request categories of documents from the defendant without Yes 1.0 Page 41   Before suing can shareholders representing 10% of Buyer's share capital inspect the Yes 1.0 transaction Doing 2018 (0-1) documents? Business Tanzania Can the plainti obtain any documents from the defendant and witnesses at trial? (0-3) Any relevant 3.0 document Can the plainti request categories of documents from the defendant without Yes 1.0 identifying speci c ones? (0-1) Can the plainti directly question the defendant and witnesses at trial? (0-2) Yes 2.0 Is the level of proof required for civil suits lower than that of criminal cases? (0-1) Yes 1.0 Can shareholder plainti s recover their legal expenses from the company? (0-2) At the discretion 0.0 of the court Extent of shareholder governance index (0-10) 3.7 Extent of shareholder rights index (0-10) 4 Does the sale of 51% of Buyer's assets require shareholder approval? No 0.0 Can shareholders representing 10% of Buyer's share capital call for a meeting of Yes 1.0 shareholders? Must Buyer obtain its shareholders’ approval every time it issues new shares? No 0.0 Do shareholders automatically receive preemption rights every time Buyer issues new No 0.0 shares? Must shareholders approve the election and dismissal of the external auditor? Yes 1.0 Are changes to the rights of a class of shares only possible if the holders of the a ected Yes 1.0 shares approve? Assuming that Buyer is a limited company, does the sale of 51% of its assets require No 0.0 member approval? Assuming that Buyer is a limited company, can members representing 10% call for a Yes 1.0 meeting of members? Assuming that Buyer is a limited company, must all members consent to add a new No 0.0 member? Assuming that Buyer is a limited company, must a member rst o er to sell their No 0.0 interest to the existing members before they can sell to non-members? Extent of ownership and control index (0-10) 2 Is it forbidden to appoint the same individual as CEO and chair of the board of No 0.0 directors? Must the board of directors include independent and nonexecutive board members? No 0.0 Can shareholders remove members of the board of directors without cause before the Yes 1.0 end of their term? Must the board of directors include a separate audit committee exclusively comprising No 0.0 board members? Must a potential acquirer make a tender o er to all shareholders upon acquiring 50% No 0.0 of Buyer? Page 42   Must Buyer pay declared dividends within a maximum period set by law? No 0.0 Must the board of directors include a separate audit committee exclusively comprising No 0.0 board Doing members? Business 2018 Tanzania Must a potential acquirer make a tender o er to all shareholders upon acquiring 50% No 0.0 of Buyer? Must Buyer pay declared dividends within a maximum period set by law? No 0.0 Is a subsidiary prohibited from acquiring shares issued by its parent company? Yes 1.0 Assuming that Buyer is a limited company, must Buyer have a mechanism to resolve No 0.0 disagreements among members? Assuming that Buyer is a limited company, must a potential acquirer make a tender No 0.0 o er to all shareholders upon acquiring 50% of Buyer? Assuming that Buyer is a limited company, must Buyer distribute pro ts within a No 0.0 maximum period set by law? Extent of corporate transparency index (0-10) 5 Must Buyer disclose direct and indirect bene cial ownership stakes representing 5%? No 0.0 Must Buyer disclose information about board members’ primary employment and Yes 1.0 directorships in other companies? Must Buyer disclose the compensation of individual managers? No 0.0 Must a detailed notice of general meeting be sent 21 days before the meeting? Yes 1.0 Can shareholders representing 5% of Buyer’s share capital put items on the general No 0.0 meeting agenda? Must Buyer's annual nancial statements be audited by an external auditor? Yes 1.0 Must Buyer disclose its audit reports to the public? Yes 1.0 Assuming that Buyer is a limited company, must members meet at least once a year? Yes 1.0 Assuming that Buyer is a limited company, can members representing 5% put items on No 0.0 the meeting agenda? Assuming that Buyer is a limited company, must Buyer's annual nancial statements be No 0.0 audited by an external auditor? Paying Taxes This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as measures the administrative burden in paying taxes and contributions. The most recent round of data collection for the project was completed on June 30, 2017 covering for the Paying Taxes indicator calendar year 2016 (January 1, 2016 – December 31, 2016). Last year (Doing Business 2017) the scope of data collection was expanded to better understand the overall tax environment in an economy. The questionnaire was expanded to include new questions on post- ling processes: VAT refund and tax audit. The data shows where post ling processes and practices work e ciently and what drives the di erences in the overall tax compliance cost across economies. The new section covers both the legal framework and the administrative burden on businesses to comply with post ling processes. See the methodology for more information. What the indicators measure Case study assumptions Page 43   Tax payments for a manufacturing company in Using a case scenario, Doing Business records taxes and mandatory Assuming that Buyer is a limited company, must Buyer's annual nancial statements be No 0.0 audited by an external auditor? Doing Business 2018 Tanzania Paying Taxes This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as measures the administrative burden in paying taxes and contributions. The most recent round of data collection for the project was completed on June 30, 2017 covering for the Paying Taxes indicator calendar year 2016 (January 1, 2016 – December 31, 2016). Last year (Doing Business 2017) the scope of data collection was expanded to better understand the overall tax environment in an economy. The questionnaire was expanded to include new questions on post- ling processes: VAT refund and tax audit. The data shows where post ling processes and practices work e ciently and what drives the di erences in the overall tax compliance cost across economies. The new section covers both the legal framework and the administrative burden on businesses to comply with post ling processes. See the methodology for more information. What the indicators measure Case study assumptions Tax payments for a manufacturing company in Using a case scenario, Doing Business records taxes and mandatory 2016 (number per year adjusted for electronic and contributions a medium size company must pay in a year, and measures joint ling and payment) the administrative burden of paying taxes, contributions and dealing with post ling processes. Information is also compiled on frequency of ling Total number of taxes and contributions paid, and payments, time taken to comply with tax laws, time taken to comply including consumption taxes (value added tax, with the requirements of post ling processes and time waiting. sales tax or goods and service tax) Method and frequency of filing and payment To make data comparable across economies, several assumptions are used: Time required to comply with 3 major taxes - TaxpayerCo is a medium-size business that started operations on January (hours per year) 1, 2015. It produces ceramic flowerpots and sells them at retail. All taxes Collecting information, computing tax payable and contributions recorded are paid in the second year of operation Completing tax return, filing with agencies (calendar year 2016). Taxes and mandatory contributions are measured at all levels of government. Arranging payment or withholding Preparing separate tax accounting books, if The VAT refund process: required - In June 2016, TaxpayerCo. makes a large capital purchase: the value of the Total tax and contribution rate (% of pro t before machine is 65 times income per capita of the economy. Sales are equally all taxes) spread per month (1,050 times income per capita divided by 12) and cost of goods sold are equally expensed per month (875 times income per Profit or corporate income tax capita divided by 12). The machinery seller is registered for VAT and excess Social contributions, labor taxes paid by input VAT incurred in June will be fully recovered after four consecutive employer months if the VAT rate is the same for inputs, sales and the machine and Property and property transfer taxes the tax reporting period is every month. Input VAT will exceed Output VAT Dividend, capital gains, financial transactions in June 2016. taxes The corporate income tax audit process: Waste collection, vehicle, road and other taxes - An error in calculation of income tax liability (for example, use of incorrect Post ling Index tax depreciation rates, or incorrectly treating an expense as tax deductible) leads to an incorrect income tax return and a corporate income Time to comply with a VAT refund tax underpayment. TaxpayerCo. discovered the error and voluntarily Time to receive a VAT refund noti ed the tax authority. The value of the underpaid income tax liability is Time to comply with a corporate income tax audit 5% of the corporate income tax liability due. TaxpayerCo. submits corrected information after the deadline for submitting the annual tax Time to complete a corporate income tax audit return, but within the tax assessment period. Sub-Saharan OECD high Indicator Tanzania Africa income Overall Best Performer Payments (number per year) 60 37.2 10.9 3 (Hong Kong SAR, China) Page 44   return, but within the tax assessment period. Doing Business 2018 Tanzania Sub-Saharan OECD high Indicator Tanzania Africa income Overall Best Performer Payments (number per year) 60 37.2 10.9 3 (Hong Kong SAR, China) Time (hours per year) 207 280.8 160.7 55 (Luxembourg) Total tax and contribution rate (% of profit) 44.1 46.8 40.1 18.47% (32 Economies) Postfiling index (0-100) 67.17 54.39 83.45 99.38 (Estonia) Figure – Paying Taxes in Tanzania and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 80.01: Botswana (Rank: 47) 71.67: Kenya (Rank: 92) 66.13: Mozambique (Rank: 117) 62.10: Malawi (Rank: 134) 57.49: Regional Average (Sub-Saharan Africa) 55.49: Tanzania (Rank: 154) Note: The ranking of economies on the ease of paying taxes is determined by sorting their distance to frontier scores on the ease of paying taxes. These scores are the simple average of the distance to frontier scores for each of the four component indicators – number of tax payments. time, total tax rate and post ling index – with a threshold and a nonlinear transformation applied to one of the component indicators, the total tax rate. The nonlinear distance to frontier for the total tax rate is equal to the distance to frontier for the total tax rate to the power of 0.8. The threshold is de ned as the total tax rate at the 15th percentile of the overall distribution for all years included in the analysis up to and including Doing Business 2015, which is 26.1%. All economies with a total tax rate below this threshold receive the same score as the economy at the threshold. Figure – Paying Taxes in Tanzania and comparator economies – Measure of Quality 90 82.70 80 70 67.17 62.03 58.56 60 54.39 Index score 50 40 33.41 30 20 10 0 Tanzania Botswana Kenya Malawi Mozambique Sub-Saharan Africa Details – Paying Taxes in Tanzania Total tax and Tax or contribution mandatory Payments Notes on Time rate (% of Notes Page 45   contribution (number) Payments (hours) Statutory tax rate Tax base profit) on TTR Doing Business 2018 Tanzania Figure – Paying Taxes in Tanzania and comparator economies – Measure of Quality 90 82.70 80 70 67.17 62.03 58.56 60 54.39 Index score 50 40 33.41 30 20 10 0 Tanzania Botswana Kenya Malawi Mozambique Sub-Saharan Africa Details – Paying Taxes in Tanzania Total tax and Tax or contribution mandatory Payments Notes on Time rate (% of Notes contribution (number) Payments (hours) Statutory tax rate Tax base profit) on TTR Corporate 5 62 30% Taxable profit 20.74 income tax Social security 12 10% Gross salaries 11.28 contributions (NSSF) Skills and 12 78 4.5% Gross salaries 5.36 Development Levy City Service 4 0.3% Turnover 5.30 Levy Workers 12 1%-private; 0.5%- Monthly wage bill 1.13 Compensation public Tariff Tax on 0 withheld 10% Interest income 0.26 included interest in other taxes Motor Vehicle 1 TZS 250,000 Fixed fee 0.18 License Property tax 1 0.15% Property value 0.15 Fuel Tax 1 Petrol Tshs 752 Litres 0.00 per litre Diesel TShs 628 per litre Kerosene Tshs 202 per litre Social security 0 paid 10% gross salaries 0.00 withheld contribution jointly on employees Page 46   Kerosene Tshs 202 Doing Business 2018 Tanzania per litre Social security 0 paid 10% gross salaries 0.00 withheld contribution jointly on employees Value added 12 67 18% Sales including any 0.00 tax (VAT) duty,levy,fee,charge or tax but excluding price discount or rebateaccounted at time of supply Totals 60 207 44.1 Details – Paying Taxes in Tanzania – Tax by Type Taxes by type Answer Profit tax (% of profit) 20.7 Labor tax and contributions (% of profit) 17.8 Other taxes (% of profit) 5.6 Details – Paying Taxes in Tanzania – Measure of Quality Answer Score Post ling index (0-100) 67.17 VAT refunds Does VAT exist? Yes Does a VAT refund process exist per the case study? Yes Restrictions on VAT refund process Carry forward for 6 months Percentage of cases exposed to a VAT audit (%) 25% - 49% Is there a mandatory carry forward period? Yes Time to comply with VAT refund (hours) 24.0 52 Time to obtain a VAT refund (weeks) 43.0 23.12 Corporate income tax audits Does corporate income tax exist? Yes Percentage of cases exposed to a corporate income tax audit (%) 0% - 24% Time to comply with a corporate income tax audit (hours) 5.0 93.58 Time to complete a corporate income tax audit (weeks) No tax audit per 100 case study scenario Page 47   Notes: Names of taxes have been standardized. For instance income tax, pro t tax, tax on company's income are all named to comply with TimeBusiness Doing 2018 a corporate Tanzaniaincome tax audit (hours) 5.0 93.58 Time to complete a corporate income tax audit (weeks) No tax audit per 100 case study scenario Notes: Names of taxes have been standardized. For instance income tax, pro t tax, tax on company's income are all named corporate income tax in this table. The hours for VAT include all the VAT and sales taxes applicable. The hours for Social Security include all the hours for labor taxes and mandatory contributions in general. The post ling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Trading across Borders Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tari s) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Given the importance of trade digitalization, in Doing Business 2018, the Trading across Borders questionnaire included research questions on the availability and status of implementation of Electronic Data Interchange (EDI) and Single Window (SW) systems. With this information, Doing Business built a comprehensive dataset on the adoption and level of sophistication of electronic platforms in 190 economies. These data are not used to compute the distance to frontier score or ranking of the ease of doing business. The new dataset on EDI and SW systems is available here. What the indicators measure Case study assumptions Documentary compliance To make the data comparable across economies, a few assumptions are made about the traded goods and the transactions: Obtaining, preparing and submitting documents during transport, clearance, inspections and port Time: Time is measured in hours, and 1 day is 24 hours (for example, 22 or border handling in origin economy days are recorded as 22×24=528 hours). If customs clearance takes 7.5 Obtaining, preparing and submitting documents hours, the data are recorded as is. Alternatively, suppose documents are required by destination economy and any transit submitted to a customs agency at 8:00a.m., are processed overnight and economies can be picked up at 8:00a.m. the next day. The time for customs clearance Covers all documents required by law and in would be recorded as 24 hours because the actual procedure took 24 practice, including electronic submissions of hours. information Border compliance Cost: Insurance cost and informal payments for which no receipt is issued are excluded from the costs recorded. Costs are reported in U.S. dollars. Customs clearance and inspections Contributors are asked to convert local currency into U.S. dollars based on Inspections by other agencies (if applied to more the exchange rate prevailing on the day they answer the questionnaire. than 20% of shipments) Contributors are private sector experts in international trade logistics and Handling and inspections that take place at the are informed about exchange rates. economy’s port or border Assumptions of the case study: - For all 190 economies covered by Doing Domestic transport Business, it is assumed a shipment is in a warehouse in the largest Loading or unloading of the shipment at the business city of the exporting economy and travels to a warehouse in the warehouse or port/border largest business city of the importing economy. - It is assumed each Transport between warehouse and port/border economy imports 15 metric tons of containerized auto parts (HS 8708) Traffic delays and road police checks while from its natural import partner—the economy from which it imports the largest value (price times quantity) of auto parts. It is assumed each shipment is en route economy exports the product of its comparative advantage (de ned by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product. Shipment value is assumed to be $50,000. - The mode of transport is the one most widely used for the Page 48   chosen export or import product and the trading partner, as is the a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Doing Business 2018 Tanzania Trading across Borders Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tari s) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Given the importance of trade digitalization, in Doing Business 2018, the Trading across Borders questionnaire included research questions on the availability and status of implementation of Electronic Data Interchange (EDI) and Single Window (SW) systems. With this information, Doing Business built a comprehensive dataset on the adoption and level of sophistication of electronic platforms in 190 economies. These data are not used to compute the distance to frontier score or ranking of the ease of doing business. The new dataset on EDI and SW systems is available here. What the indicators measure Case study assumptions Documentary compliance To make the data comparable across economies, a few assumptions are made about the traded goods and the transactions: Obtaining, preparing and submitting documents during transport, clearance, inspections and port Time: Time is measured in hours, and 1 day is 24 hours (for example, 22 or border handling in origin economy days are recorded as 22×24=528 hours). If customs clearance takes 7.5 Obtaining, preparing and submitting documents hours, the data are recorded as is. Alternatively, suppose documents are required by destination economy and any transit submitted to a customs agency at 8:00a.m., are processed overnight and economies can be picked up at 8:00a.m. the next day. The time for customs clearance Covers all documents required by law and in would be recorded as 24 hours because the actual procedure took 24 practice, including electronic submissions of hours. information Border compliance Cost: Insurance cost and informal payments for which no receipt is issued are excluded from the costs recorded. Costs are reported in U.S. dollars. Customs clearance and inspections Contributors are asked to convert local currency into U.S. dollars based on Inspections by other agencies (if applied to more the exchange rate prevailing on the day they answer the questionnaire. than 20% of shipments) Contributors are private sector experts in international trade logistics and Handling and inspections that take place at the are informed about exchange rates. economy’s port or border Assumptions of the case study: - For all 190 economies covered by Doing Domestic transport Business, it is assumed a shipment is in a warehouse in the largest Loading or unloading of the shipment at the business city of the exporting economy and travels to a warehouse in the warehouse or port/border largest business city of the importing economy. - It is assumed each Transport between warehouse and port/border economy imports 15 metric tons of containerized auto parts (HS 8708) Traffic delays and road police checks while from its natural import partner—the economy from which it imports the largest value (price times quantity) of auto parts. It is assumed each shipment is en route economy exports the product of its comparative advantage (de ned by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product. Shipment value is assumed to be $50,000. - The mode of transport is the one most widely used for the chosen export or import product and the trading partner, as is the seaport, or land border crossing. - All electronic information submissions requested by any government agency in connection with the shipment are considered to be documents obtained, prepared and submitted during the export or import process. - A port or border is a place (seaport, airport or land border crossing) where merchandise can enter or leave an economy. - Relevant government agencies include customs, port authorities, road police, border guards, standardization agencies, ministries or departments of agriculture or industry, national security agencies and any other government authorities. Page 49   of agriculture or industry, national security agencies and any other Doing Business 2018 Tanzania government authorities. Sub-Saharan OECD high Indicator Tanzania Africa income Overall Best Performer Time to export: Border compliance (hours) 96 100.1 12.7 0 (17 Economies) Cost to export: Border compliance (USD) 1160 592.1 149.9 0.00 (19 Economies) Time to export: Documentary compliance 96 87.8 2.4 1.0 (25 Economies) (hours) Cost to export: Documentary compliance (USD) 275 215.1 35.4 0.00 (19 Economies) Time to import: Border compliance (hours) 402 136.4 8.7 0.00 (21 Economies) Cost to import: Border compliance (USD) 1350 686.8 111.6 0.00 (27 Economies) Time to import: Documentary compliance 240 103.0 3.5 1.0 (30 Economies) (hours) Cost to import: Documentary compliance (USD) 375 300.1 25.6 0.00 (30 Economies) Figure – Trading across Borders in Tanzania and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 86.65: Botswana (Rank: 50) 67.63: Kenya (Rank: 106) 67.25: Mozambique (Rank: 109) 65.29: Malawi (Rank: 117) 52.56: Regional Average (Sub-Saharan Africa) 20.21: Tanzania (Rank: 182) Note: The ranking of economies on the ease of trading across borders is determined by sorting their distance to frontier scores for trading across borders. These scores are the simple average of the distance to frontier scores for the time and cost for documentary compliance and border compliance to export and import (domestic transport is not used for calculating the ranking). Figure – Trading across Borders in Tanzania – Time and Cost Time Cost 450 1600 402 400 1350 1400 350 1160 1200 300 Time (hours) Cost (USD) 1000 240 250 800 200 600 150 96 96 375 275 400 100 50 200 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary Compliance Page 50   Doing Business 2018 Tanzania Figure – Trading across Borders in Tanzania – Time and Cost Time Cost 450 1600 402 400 1350 1400 350 1160 1200 300 Time (hours) Cost (USD) 1000 240 250 800 200 600 150 96 96 375 275 400 100 50 200 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary Compliance Details – Trading across Borders in Tanzania Characteristics Export Import Product HS 09 : Coffee, tea, matï and spices HS 8708: Parts and accessories of motor vehicles Trade partner Japan China Border Dar es Salaam port Dar es Salaam port Distance (km) 16 16 Domestic transport time (hours) 5 5 Domestic transport cost (USD) 275 275 Details – Trading across Borders in Tanzania – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 24.0 175.0 Export: Clearance and inspections required by agencies other than customs 48.0 250.0 Export: Port or border handling 96.0 735.0 Import: Clearance and inspections required by customs authorities 108.0 300.0 Import: Clearance and inspections required by agencies other than customs 204.0 275.0 Import: Port or border handling 198.0 775.0 Details – Trading across Borders in Tanzania – Trade Documents Export Import Bill of lading Bill of lading Certificate of origin Certificate of origin Page 51   Domestic transport cost (USD) 275 275 Doing Business 2018 Tanzania Details – Trading across Borders in Tanzania – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 24.0 175.0 Export: Clearance and inspections required by agencies other than customs 48.0 250.0 Export: Port or border handling 96.0 735.0 Import: Clearance and inspections required by customs authorities 108.0 300.0 Import: Clearance and inspections required by agencies other than customs 204.0 275.0 Import: Port or border handling 198.0 775.0 Details – Trading across Borders in Tanzania – Trade Documents Export Import Bill of lading Bill of lading Certificate of origin Certificate of origin Commercial invoice Commercial invoice Customs Export Declaration Packing list Release Order Certificate of Conformity Export permit Import Declaration (C41 Form) Fumigation Certificate Delivery order Phytosanitary certificate Authority Letter Letter of Authorization Taxpayer identification number certificate Packing List SOLAS certificate SOLAS certificate Enforcing Contracts The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local rst-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and e ciency in the court system. The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to enforce a contract through the The dispute in the case study involves the breach of a sales contract courts (calendar days) between 2 domestic businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes Time to file and serve the case Page 52   the case from simple debt enforcement. Time for trial and to obtain the judgment SOLAS certificate Doing Business 2018 Tanzania Enforcing Contracts The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local rst-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and e ciency in the court system. The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to enforce a contract through the The dispute in the case study involves the breach of a sales contract courts (calendar days) between 2 domestic businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes Time to file and serve the case the case from simple debt enforcement. Time for trial and to obtain the judgment To make the data comparable across economies, Doing Business uses Time to enforce the judgment several assumptions about the case: Cost required to enforce a contract through the - The dispute concerns a lawful transaction between two businesses (Seller courts (% of claim) and Buyer), both located in the economy’s largest business city. For 11 Attorney fees economies the data are also collected for the second largest business city. - The buyer orders custom-made goods, then fails to pay. Court fees - The value of the dispute is 200% of the income per capita or the Enforcement fees equivalent in local currency of USD 5,000, whichever is greater. Quality of judicial processes index (0-18) - The seller sues the buyer before the court with jurisdiction over commercial cases worth 200% of income per capita or $5,000. Court structure and proceedings (-1-5) - The seller requests a pretrial attachment to secure the claim. Case management (0-6) - The dispute on the quality of the goods requires an expert opinion. Court automation (0-4) - The judge decides in favor of the seller; there is no appeal. Alternative dispute resolution (0-3) - The seller enforces the judgment through a public sale of the buyer’s movable assets. Standardized Case Claim value TZS 9,282,862.00 Court name Dar es Salaam Resident Magistrates Court, Kisutu City Covered Dar es Salaam Sub-Saharan OECD high Indicator Tanzania Africa income Overall Best Performer Time (days) 515 656.8 577.8 164.00 (Singapore) Cost (% of claim value) 14.3 44.0 21.5 9.00 (Iceland) Quality of judicial processes index (0-18) 6.0 6.5 11.0 15.50 (Australia) Figure – Enforcing Contracts in Tanzania and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 61.66: Tanzania (Rank: 58) 58.27: Kenya (Rank: 90) 49.99: Botswana (Rank: 133) Page 53   of judicial processes Quality Business Doing index (0-18) 2018 Tanzania 6.0 6.5 11.0 15.50 (Australia) Figure – Enforcing Contracts in Tanzania and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 61.66: Tanzania (Rank: 58) 58.27: Kenya (Rank: 90) 49.99: Botswana (Rank: 133) 48.14: Regional Average (Sub-Saharan Africa) 45.55: Malawi (Rank: 151) 27.32: Mozambique (Rank: 184) Note: The ranking of economies on the ease of enforcing contracts is determined by sorting their distance to frontier scores for enforcing contracts. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Enforcing Contracts in Tanzania – Time and Cost Time Cost 1000 950 140 119.0 120 Cost (% of claim value) 800 660 656.8 100 577.8 Time (days) 600 522 69.1 515 80 465 60 400 39.8 41.8 44.0 40 200 21.5 14.3 20 0 0 Botswana Kenya Malawi Mozambique OECD high income Sub-Saharan Africa Tanzania Figure – Enforcing Contracts in Tanzania and comparator economies – Measure of Quality Tanzania 1.5 1.5 0 3 Botswana 2 2.5 0 2.5 Kenya 2 2 0.5 4.5 Malawi 1.5 1 1.5 4.5 Mozambique 2.5 2 0 4.5 OECD high income 2.5 2.9 2 3.6 Sub-Saharan Africa 2 1.1 0.3 3.2 0 2 4 6 8 10 Page 54   12 0 0 Botswana Kenya Malawi Mozambique OECD high income Sub-Saharan Africa Tanzania Doing Business 2018 Tanzania Figure – Enforcing Contracts in Tanzania and comparator economies – Measure of Quality Tanzania 1.5 1.5 0 3 Botswana 2 2.5 0 2.5 Kenya 2 2 0.5 4.5 Malawi 1.5 1 1.5 4.5 Mozambique 2.5 2 0 4.5 OECD high income 2.5 2.9 2 3.6 Sub-Saharan Africa 2 1.1 0.3 3.2 0 2 4 6 8 10 12 Sub-Indicator Score Alternative dispute resolution (0­3) Case management (0­6) Court automation (0­4) Court structure and proceedings (­1­5) Details – Enforcing Contracts in Tanzania Indicator Time (days) 515 Filing and service 60 Trial and judgment 365 Enforcement of judgment 90 Cost (% of claim value) 14.3 Attorney fees 10 Court fees 4.3 Enforcement fees 0 Quality of judicial processes index (0-18) 6.0 Court structure and proceedings (-1-5) 3.0 Case management (0-6) 1.5 Court automation (0-4) 0.0 Alternative dispute resolution (0-3) 1.5 Details – Enforcing Contracts in Tanzania – Measure of Quality Page 55   Alternative dispute resolution (0-3) 1.5 Doing Business 2018 Tanzania Details – Enforcing Contracts in Tanzania – Measure of Quality Answer Score Quality of judicial processes index (0-18) 6.0 Court structure and proceedings (-1-5) 3.0 1. Is there a court or division of a court dedicated solely to hearing commercial cases? Yes 1.5 2. Small claims court 0.0 2.a. Is there a small claims court or a fast-track procedure for small claims? No 2.b. If yes, is self-representation allowed? n.a. 3. Is pretrial attachment available? Yes 1.0 4. Are new cases assigned randomly to judges? Yes, but manual 0.5 5. Does a woman's testimony carry the same evidentiary weight in court as a man's? Yes 0.0 Case management (0-6) 1.5 1. Time standards 0.5 1.a. Are there laws setting overall time standards for key court events in a civil case? Yes 1.b. If yes, are the time standards set for at least three court events? Yes 1.c. Are these time standards respected in more than 50% of cases? No 2. Adjournments 0.0 2.a. Does the law regulate the maximum number of adjournments that can be No granted? 2.b. Are adjournments limited to unforeseen and exceptional circumstances? No 2.c. If rules on adjournments exist, are they respected in more than 50% of cases? n.a. 3. Can two of the following four reports be generated about the competent court: (i) No 0.0 time to disposition report; (ii) clearance rate report; (iii) age of pending cases report; and (iv) single case progress report? 4. Is a pretrial conference among the case management techniques used before the Yes 1.0 competent court? 5. Are there any electronic case management tools in place within the competent court No 0.0 for use by judges? 6. Are there any electronic case management tools in place within the competent court No 0.0 for use by lawyers? Court automation (0-4) 0.0 1. Can the initial complaint be led electronically through a dedicated platform within No 0.0 the competent court? 2. Is it possible to carry out service of process electronically for claims led before the No 0.0 competent court? Page 56   1. Can the initial complaint be led electronically through a dedicated platform within No 0.0 Businesscourt? the competent Doing 2018 Tanzania 2. Is it possible to carry out service of process electronically for claims led before the No 0.0 competent court? 3. Can court fees be paid electronically within the competent court? No 0.0 4. Publication of judgments 0.0 4.a Are judgments rendered in commercial cases at all levels made available to the No general public through publication in o cial gazettes, in newspapers or on the internet or court website? 4.b. Are judgments rendered in commercial cases at the appellate and supreme No court level made available to the general public through publication in o cial gazettes, in newspapers or on the internet or court website? Alternative dispute resolution (0-3) 1.5 1. Arbitration 1.0 1.a. Is domestic commercial arbitration governed by a consolidated law or Yes consolidated chapter or section of the applicable code of civil procedure encompassing substantially all its aspects? 1.b. Are there any commercial disputes—aside from those that deal with public Yes order or public policy—that cannot be submitted to arbitration? 1.c. Are valid arbitration clauses or agreements usually enforced by the courts? Yes 2. Mediation/Conciliation 0.5 2.a. Is voluntary mediation or conciliation available? Yes 2.b. Are mediation, conciliation or both governed by a consolidated law or No consolidated chapter or section of the applicable code of civil procedure encompassing substantially all their aspects? 2.c. Are there nancial incentives for parties to attempt mediation or conciliation (i.e., No if mediation or conciliation is successful, a refund of court ling fees, income tax credits or the like)? Resolving Insolvency Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to recover debt (years) To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are Measured in calendar years used: Appeals and requests for extension are included - A hotel located in the largest city (or cities) has 201 employees and 50 Cost required to recover debt (% of debtor’s estate) suppliers. The hotel experiences nancial di culties. Page 57   Measured as percentage of estate value - The value of the hotel is 100% of the income per capita or the equivalent if mediation or conciliation is successful, a refund of court ling fees, income tax credits or the like)? Doing Business 2018 Tanzania Resolving Insolvency Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to recover debt (years) To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are Measured in calendar years used: Appeals and requests for extension are included - A hotel located in the largest city (or cities) has 201 employees and 50 Cost required to recover debt (% of debtor’s estate) suppliers. The hotel experiences nancial di culties. Measured as percentage of estate value - The value of the hotel is 100% of the income per capita or the equivalent Court fees in local currency of USD 200,000, whichever is greater. - The hotel has a loan from a domestic bank, secured by a mortgage over Fees of insolvency administrators the hotel’s real estate. The hotel cannot pay back the loan, but makes Lawyers’ fees enough money to operate otherwise. Assessors’ and auctioneers’ fees In addition, Doing Business evaluates the adequacy and integrity of the Other related fees existing legal framework applicable to liquidation and reorganization Outcome proceedings through the strength of insolvency framework index. The index tests whether economies adopted internationally accepted good Whether business continues operating as a going practices in four areas: commencement of proceedings, management of concern or business assets are sold piecemeal debtor’s assets, reorganization proceedings and creditor participation. Recovery rate for creditors Measures the cents on the dollar recovered by secured creditors Outcome for the business (survival or not) determines the maximum value that can be recovered Official costs of the insolvency proceedings are deducted Depreciation of furniture is taken into account Present value of debt recovered Strength of insolvency framework index (0- 16) Sum of the scores of four component indices: Commencement of proceedings index (0-3) Management of debtor’s assets index (0-6) Reorganization proceedings index (0-3) Creditor participation index (0-4) Sub-Saharan OECD high Indicator Tanzania Africa income Overall Best Performer Recovery rate (cents on the dollar) 21.2 20.3 71.2 93.1 (Norway) Time (years) 3.0 2.9 1.7 0.4 (Ireland) Page 58   Cost (% of estate) 22.0 22.7 9.1 1.00 (Norway) Creditor participation index (0-4) Doing Business 2018 Tanzania Sub-Saharan OECD high Indicator Tanzania Africa income Overall Best Performer Recovery rate (cents on the dollar) 21.2 20.3 71.2 93.1 (Norway) Time (years) 3.0 2.9 1.7 0.4 (Ireland) Cost (% of estate) 22.0 22.7 9.1 1.00 (Norway) Outcome (0 as piecemeal sale and 1 as going 0 .. .. .. concern) Strength of insolvency framework index (0-16) 9.0 6.2 12.1 15.00 (6 Economies) Figure – Resolving Insolvency in Tanzania and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 48.20: Mozambique (Rank: 75) 47.76: Botswana (Rank: 79) 43.11: Kenya (Rank: 95) 39.52: Tanzania (Rank: 108) 33.28: Malawi (Rank: 138) 30.28: Regional Average (Sub-Saharan Africa) Note: The ranking of economies on the ease of resolving insolvency is determined by sorting their distance to frontier scores for resolving insolvency. These scores are the simple average of the distance to frontier scores for the recovery rate and the strength of insolvency framework index. Figure – Resolving Insolvency in Tanzania – Time and Cost Time Cost 5 30 4.5 25.0 22.7 25 4 22.0 22.0 20.5 Cost (% of estate) 18.0 3.0 20 Time (years) 2.9 3 2.6 15 2 1.7 1.7 1.5 9.1 10 1 5 0 0 Botswana Kenya Malawi Mozambique OECD high income Sub-Saharan Africa Tanzania Figure – Resolving Insolvency in Tanzania and comparator economies – Measure of Quality Tanzania 4 3 1 1 Page 59   Botswana 1 3 0 0 0 Botswana Kenya Malawi Mozambique OECD high income Sub-Saharan Africa Tanzania Doing Business 2018 Tanzania Figure – Resolving Insolvency in Tanzania and comparator economies – Measure of Quality Tanzania 4 3 1 1 Botswana 1 3 0 Kenya 3 3 1 2 Malawi 4 3 1 0.5 Mozambique 4 2.5 2 1.5 OECD high income 5.4 2.8 2.3 1.9 Sub-Saharan Africa 4.1 2.3 1 0.4 0 2 4 6 8 10 12 14 Sub-Indicator Score Management of debtor's assets index (0­6) Commencement of proceedings index (0­3) Creditor participation index (0­4) Reorganization proceedings index (0­3) Figure – Resolving Insolvency in Tanzania and comparator economies – Recovery Rate Recovery Rate (cents on the dollar) 70 65.5 60 50 40 31.5 27.9 30 21.2 20.3 20 12.5 10 0 Tanzania Botswana Kenya Malawi Mozambique Sub-Saharan Africa Details – Resolving Insolvency in Tanzania Indicator Answer Explanation Proceeding receivership It would be in Bizbank's best interests to start a receivership proceeding (Section 405(c) of Page 60   Tanzania Botswana Kenya Malawi Mozambique Sub-Saharan Africa Doing Business 2018 Tanzania Details – Resolving Insolvency in Tanzania Indicator Answer Explanation Proceeding receivership It would be in Bizbank's best interests to start a receivership proceeding (Section 405(c) of the Companies Act 2002) under mortgage with a view to ultimately sell Mirage in order to recoup the Bizbank's loan. Outcome piecemeal sale The hotel will stop operating and Mirage assets will be sold piecemeal by the BizBank appointed receiver since according to the current market conditions it is hard to sell the business as a going concern. Time (in years) 3.0 The receivership procedure takes approximate 3 years until BizBank is repaid some or all of the money owed to it. The delay is largely due to the possible delaying tactics adopted by Mirage. When the BizBank appointed administrative receiver tries to sell the assets, it is likely that Mirage would file for an injunction at the commercial division of the high court where no exclusive jurisdiction exists to deal with the insolvency case. Then pre-conference trial will set up the speedy track and the mediation period which takes about 3 months. After mediation elapses, a final pre-trial conference (1 month) is established. This follows the first hearing until the final judgment, and the whole process take approximate 2 years taking into consideration of adjournments and possible delaying tactics. Execution order will be granted by the court after 30 days granted to the losing party to appeal have elapsed, and the execution proceedings will take approximately 2 months until BizBank receives the sale proceeds. Cost (% of 22.0 The cost associated with the case would amount to approximately 22% of the value of the estate) debtor's estate. The cost incurred during the entire insolvency process mainly includes court or government agency fees (3%), attorney fees (4%), insolvency representative or receiver fees (4%), fees of auctioneers (7%), fees of accountants, assessors, inspectors and other professionals (3%), and other fees. Recovery rate (cents on the 21.2 dollar) Details – Resolving Insolvency in Tanzania – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 9.0 Commencement of proceedings index (0-3) 3.0 What procedures are available to a DEBTOR when commencing insolvency (a) Debtor may 1.0 proceedings? le for both liquidation and reorganization Does the insolvency framework allow a CREDITOR to le for insolvency of the debtor? (a) Yes, a creditor 1.0 may le for both liquidation and reorganization What basis for commencement of the insolvency proceedings is allowed under the (c) Both (a) and 1.0 insolvency framework? (b) options are available, but only one of them Page 61   needs to be dollar) Doing Business 2018 Tanzania Details – Resolving Insolvency in Tanzania – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 9.0 Commencement of proceedings index (0-3) 3.0 What procedures are available to a DEBTOR when commencing insolvency (a) Debtor may 1.0 proceedings? le for both liquidation and reorganization Does the insolvency framework allow a CREDITOR to le for insolvency of the debtor? (a) Yes, a creditor 1.0 may le for both liquidation and reorganization What basis for commencement of the insolvency proceedings is allowed under the (c) Both (a) and 1.0 insolvency framework? (b) options are available, but only one of them needs to be complied with Management of debtor's assets index (0-6) 4.0 Does the insolvency framework allow the continuation of contracts supplying essential No 0.0 goods and services to the debtor? Does the insolvency framework allow the rejection by the debtor of overly burdensome Yes 1.0 contracts? Does the insolvency framework allow avoidance of preferential transactions? Yes 1.0 Does the insolvency framework allow avoidance of undervalued transactions? Yes 1.0 Does the insolvency framework provide for the possibility of the debtor obtaining credit Yes 1.0 after commencement of insolvency proceedings? Does the insolvency framework assign priority to post-commencement credit? (c) No priority is 0.0 assigned to post- commencement creditors Reorganization proceedings index (0-3) 1.0 Which creditors vote on the proposed reorganization plan? (b) Only creditors 1.0 whose rights are a ected by the proposed plan Does the insolvency framework require that dissenting creditors in reorganization No 0.0 receive at least as much as what they would obtain in a liquidation? Are the creditors devided into classes for the purposes of voting on the reorganization No 0.0 plan, does each class vote separately and are creditors in the same class treated equally? Creditor participation index (0-4) 1.0 Page 62   Does the insolvency framework require that dissenting creditors in reorganization No 0.0 receive Doing at least as Business much as 2018 what they would obtain in a liquidation? Tanzania Are the creditors devided into classes for the purposes of voting on the reorganization No 0.0 plan, does each class vote separately and are creditors in the same class treated equally? Creditor participation index (0-4) 1.0 Does the insolvency framework require approval by the creditors for selection or No 0.0 appointment of the insolvency representative? Does the insolvency framework require approval by the creditors for sale of substantial No 0.0 assets of the debtor? Does the insolvency framework provide that a creditor has the right to request No 0.0 information from the insolvency representative? Does the insolvency framework provide that a creditor has the right to object to Yes 1.0 decisions accepting or rejecting creditors' claims? Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice”. Labor Market Regulation Doing Business presents the data for the labor market regulation indicators in an annex. The report does not present rankings of economies on these indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business. Detailed data collected on labor market regulation are available on the Doing Business website (http://www.doingbusiness.org/data/exploretopics/labor-market-regulation). The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Hiring To make the data comparable across economies, several assumptions (i) whether xed-term contracts are prohibited for about the worker and the business are used. permanent tasks; (ii) maximum cumulative duration of xed-term contracts; (iii) length of the The worker: probationary period; (iv) minimum wage. - Is a cashier in a supermarket or grocery store, age 19, with one year of work experience. Working hours - Is a full-time employee. (i) maximum number of working days allowed per - Is not a member of the labor union, unless membership is mandatory. week; (ii) premiums for work: at night, on a weekly rest day and overtime; (iii) whether there are The business: restrictions on work at night, work on a weekly rest - Is a limited liability company (or the equivalent in the economy). day and for overtime work; (iv) whether nonpregnant - Operates a supermarket or grocery store in the economy’s largest and nonnursing women can work same night hours business city. For 11 economies the data are also collected for the second as men; (v) length of paid annual leave. largest business city. - Has 60 employees. Redundancy rules - Is subject to collective bargaining agreements if such agreements cover (i) whether redundancy can be basis for terminating more than 50% of the food retail sector and they apply even to rms that workers; (ii) whether employer needs to notify are not party to them. and/or get approval from third party to terminate 1 - Abides by every law and regulation but does not grant workers more redundant worker and a group of 9 redundant bene ts than those mandated by law, regulation or (if applicable) collective workers; (iii) whether law requires employer to bargaining agreements. reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment. Redundancy cost Page 63   (i) notice period for redundancy dismissal; (ii) the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice”. Doing Business 2018 Tanzania Labor Market Regulation Doing Business presents the data for the labor market regulation indicators in an annex. The report does not present rankings of economies on these indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business. Detailed data collected on labor market regulation are available on the Doing Business website (http://www.doingbusiness.org/data/exploretopics/labor-market-regulation). The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Hiring To make the data comparable across economies, several assumptions (i) whether xed-term contracts are prohibited for about the worker and the business are used. permanent tasks; (ii) maximum cumulative duration of xed-term contracts; (iii) length of the The worker: probationary period; (iv) minimum wage. - Is a cashier in a supermarket or grocery store, age 19, with one year of work experience. Working hours - Is a full-time employee. (i) maximum number of working days allowed per - Is not a member of the labor union, unless membership is mandatory. week; (ii) premiums for work: at night, on a weekly rest day and overtime; (iii) whether there are The business: restrictions on work at night, work on a weekly rest - Is a limited liability company (or the equivalent in the economy). day and for overtime work; (iv) whether nonpregnant - Operates a supermarket or grocery store in the economy’s largest and nonnursing women can work same night hours business city. For 11 economies the data are also collected for the second as men; (v) length of paid annual leave. largest business city. - Has 60 employees. Redundancy rules - Is subject to collective bargaining agreements if such agreements cover (i) whether redundancy can be basis for terminating more than 50% of the food retail sector and they apply even to rms that workers; (ii) whether employer needs to notify are not party to them. and/or get approval from third party to terminate 1 - Abides by every law and regulation but does not grant workers more redundant worker and a group of 9 redundant bene ts than those mandated by law, regulation or (if applicable) collective workers; (iii) whether law requires employer to bargaining agreements. reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment. Redundancy cost (i) notice period for redundancy dismissal; (ii) severance payments due when terminating a redundant worker. Job quality (i) whether law mandates equal remuneration for work of equal value and nondiscrimination based on gender in hiring; (ii) whether law mandates paid or unpaid maternity leave; (iii) length of paid maternity leave; (iv) whether employees on maternity leave receive 100% of wages; (v) availability of ve fully paid days of sick leave a year; (vi) eligibility requirements for unemployment protection. Details – Labor Market Regulation in Tanzania Answer Hiring Page 64   Fixed-term contracts prohibited for permanent tasks? Yes days of sick leave a year; (vi) eligibility requirements for unemployment protection. Doing Business 2018 Tanzania Details – Labor Market Regulation in Tanzania Answer Hiring Fixed-term contracts prohibited for permanent tasks? Yes Maximum length of a single xed-term contract (months) No limit Maximum length of xed-term contracts, including renewals (months) No limit Minimum wage applicable to the worker assumed in the case study (US$/month) 54.5 Ratio of minimum wage to value added per worker 0.4 Maximum length of probationary period (months) 6.0 Working hours Standard workday 9.0 Maximum number of working days per week 6.0 Premium for night work (% of hourly pay) 5.0 Premium for work on weekly rest day (% of hourly pay) 100.0 Premium for overtime work (% of hourly pay) 50.0 Restrictions on night work? No Whether nonpregnant and nonnursing women can work the same night hours as men Yes Restrictions on weekly holiday? No Restrictions on overtime work? No Paid annual leave for a worker with 1 year of tenure (working days) 20.0 Paid annual leave for a worker with 5 years of tenure (working days) 20.0 Paid annual leave for a worker with 10 years of tenure (working days) 20.0 Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 20.0 Redundancy rules Dismissal due to redundancy allowed by law? Yes Third-party noti cation if one worker is dismissed? Yes Third-party approval if one worker is dismissed? Yes Third-party noti cation if nine workers are dismissed? Yes Third-party approval if nine workers are dismissed? Yes Retraining or reassignment obligation before redundancy? No Page 65   Third-party Doing approval Business 2018 if nine workers are dismissed? Tanzania Yes Retraining or reassignment obligation before redundancy? No Priority rules for redundancies? No Priority rules for reemployment? Yes Redundancy cost Notice period for redundancy dismissal for a worker with 1 year of tenure 4.0 Notice period for redundancy dismissal for a worker with 5 years of tenure 4.0 Notice period for redundancy dismissal for a worker with 10 years of tenure 4.0 Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 4.0 Severance pay for redundancy dismissal for a worker with 1 year of tenure 1.0 Severance pay for redundancy dismissal for a worker with 5 years of tenure 5.0 Severance pay for redundancy dismissal for a worker with 10 years of tenure 10.0 Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 5.3 Job quality Equal remuneration for work of equal value? Yes Gender nondiscrimination in hiring? Yes Paid or unpaid maternity leave mandated by law? Yes Minimum length of maternity leave (calendar days)? 84.0 Receive 100% of wages on maternity leave? Yes Five fully paid days of sick leave a year? Yes Unemployment protection after one year of employment? No Minimum contribution period for unemployment protection (months)? n.a. Business Reforms in Tanzania In the year ending June 1, 2017, 119 economies implemented 264 total reforms across the di erent areas measured by Doing Business. Doing Business has recorded more than 2,900 regulatory reforms making it easier to do business since 2004. Reforms inspired by Doing Business have been implemented by economies in all regions. The following are the reforms for Tanzania implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2018 Dealing with Construction Permits: Tanzania made dealing with construction permits easier by implementing a one-stop shop and streamlining the building permit process. Registering Property: Tanzania made registering property more expensive by increasing the land and property registration fee. DB2017 Getting Credit: The credit bureau in Tanzania expanded credit bureau borrower coverage and began to distribute credit data Page 66   from retailers. Minimum contribution period for unemployment protection (months)? n.a. Doing Business 2018 Tanzania Business Reforms in Tanzania In the year ending June 1, 2017, 119 economies implemented 264 total reforms across the di erent areas measured by Doing Business. Doing Business has recorded more than 2,900 regulatory reforms making it easier to do business since 2004. Reforms inspired by Doing Business have been implemented by economies in all regions. The following are the reforms for Tanzania implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2018 Dealing with Construction Permits: Tanzania made dealing with construction permits easier by implementing a one-stop shop and streamlining the building permit process. Registering Property: Tanzania made registering property more expensive by increasing the land and property registration fee. DB2017 Getting Credit: The credit bureau in Tanzania expanded credit bureau borrower coverage and began to distribute credit data from retailers. Paying Taxes: Tanzania made paying taxes more complicated by increasing the frequency of ling of the skills Development Levy and more costly by introducing a workers’ compensation tari paid by employers. DB2016 Trading across Borders: Tanzania reduced the time for both exporting and importing by implementing the Tanzania Customs Integrated System (TANCIS), an online system for downloading and processing customs documents. DB2015 Starting a Business: Tanzania made starting a business more di cult by increasing registration fees. Getting Credit: Tanzania improved access to credit information by creating credit bureaus. Paying Taxes: Tanzania made paying taxes more complicated for companies by introducing an excise tax on money transfers. On the other hand, it made paying taxes less costly by reducing the rate of the skill and development levy. Trading across Borders: Tanzania made trading across borders easier by upgrading infrastructure at the port of Dar es Salaam. DB2014 Getting Credit: Tanzania improved its credit information system through new regulations that provide for the licensing of credit reference bureaus and outline the functions of the credit reference data bank. Resolving Insolvency: Tanzania made resolving insolvency easier through new rules clearly specifying the professional requirements and remuneration for insolvency practitioners, promoting reorganization proceedings and streamlining insolvency proceedings. DB2013 Starting a Business: Tanzania made starting a business easier by eliminating the requirement for inspections by health, town and land o cers as a prerequisite for a business license. Dealing with Construction Permits: Tanzania made dealing with construction permits more expensive by increasing the cost to obtain a building permit. Trading across Borders: Tanzania made importing more di cult by introducing a requirement to obtain a certi cate of conformity before the imported goods are shipped. DB2012 Trading across Borders: Tanzania made trading across borders faster by implementing the Pre-Arrival Declaration (PAD) system and electronic submission of customs declaration. Page 67   DB2010 DB2012 Doing Business Trading Tanzania 2018 Tanzania across Borders: made trading across borders faster by implementing the Pre-Arrival Declaration (PAD) system and electronic submission of customs declaration. DB2010 Dealing with Construction Permits: Tanzania made dealing with construction permits more di cult by introducing changes that resulted in additional procedures and cost. DB2008 Starting a Business: Tanzania made starting a business easier by creating business registration centers in all the local authorities and by making the company seal optional. Page 68   Starting a Business: Tanzania made starting a business easier by creating business registration centers in all the local authorities 2018 the and by making Doing Business company seal optional. Tanzania Page 69