The Export Processing Zones Shon (Amendment) Act, 2006

1. This Act m ay be cited as the Export Processing Zones (Am endments) Act, 2006 and shall be read together with the Export Processing Zones Act, 2002, hereinafter referred to as “the principal A ct” . Short title Cap. 373 PART II G e n e r a l A m e n d m e n t s

2. The principal Act is am ended by deleting the word “A gent” w herever it appears in the Act and substituting for it the word “A uthority” ; G eneral A m e n d ­ m ents 45 J No. 3 A m end­ m ent o f section 2 S ubstitu­ tion o f Part IV Export Processing Zones (Amendments) 2006

3. The principal Act is am ended in section 2 by deleting the definition o f the word “A gent” and substituting for it the follow ing:- “A u th o rity ” m eans the E xport P rocessing Z ones A uthority established under section 12 o f this A ct”.

4. Part IV o f the principal Act is hereby repealed and replaced with the following P art:- T h e E x p o r t P r o c e s s i n g Z o n e s A u t h o r i t y PART IV Establish­ ment o f the Authority

12.—(1) There is hereby established an autonom ous G overnm ent agency to be known as the Export Processing Zones Authority. (2) The Authority shall be a body corporate and shall— (a) have perpetual succession; and a com m on seal; (b) in its corporate name be capable o f suing and being sued; (c) subject to this Act, be capable o f purchasing or otherwise acquiring, and or, alienating movable and immovable property. Objectives and functions of the Authority

13.—(1) The A uthority shall initiate, develop and manage the operations o f the publicly owned export processing zones and for that purpose shall carry out duties and perform the functions as stipulated under this section. (2) For purposes o f initiating, developing and managing operations o f the Export o f the Export Processing Zones, the Authority shall— (a) in consultation with the M inister responsible for lands and the local governm ent authority acquire land in its nam e and erect thereon industrial and com m ercial buildings and lease such buildings to investors for undertaking thereon the Export Processing Zones licensed businesses; 46 No. 3 Export Processing Zones (Amendments) 2006 (b) provide basic in frastru cture for purposes o f operations in the Export Processing Zones; (c) provide within the Export Processing Zones utilities and a system o f sewerage, drainage and removal o f refuse and waste for the benefit o f export processing zones investors and other users; (d) prepare national and international program mes for appropriate prom otion o f the Export Processing Zones; (e) ensure the provision o f security and surveillance, and property equ ipm en t m aintenance availability o f restaurants and food services; and (f) provide com m ercial inform ation for the benefit o f investors in the Export Processing Zones; and (g) provide any other p ublic utility as m ay be necessary for the betterm ent o f operators and investors within the Export Processing Zones or consum ers o f products or services from the Export Processing Zones. (3) In discharging the duties and perform ing the functions referred to in subsection (2), the Authority shall have powers to subcontract any person to execute any duty or perform any function provided for under subsection (2), and in particular, m ay licence private investors to develop Export Processing Zones infrastracture. (4) The A uthority may charge rent, dues and impose fees and charges for services rendered or facilities provided in the Export Processing Zones. (5) The A uthority may, in discharging the powers and duties conferred by this Act, provide such other services, perform such other duties and functions and exercise such powers as may be necessary to attain the spirit o f this Act. No. 3 Export Processing Zones (Amendments) 2006 Establish­ ment o f the Export P rocess­ ing Z ones Council

14.—(1) There is hereby established for the Authority a Council to be known as the Export Processing Zones Council. (2) The Council shall be composed of the following members- (a) the M inister responsible for industries who shall be the Chairm an; (b) the M inister responsible for finance, (c) the M inister responsible for energy; (d) the M inister responsible for lands; (e) the M inister responsible for infrastructure; (f) the M inister responsible for water; (g) the M inister responsible for planning; (h) the A ttorney General; (i) the G overnor o f the Bank o f Tanzania; (j) the C hairm an o f the Tanzania Private Sector Foundation; (k) the Executive Secretary o f the Tanzania National Business Council; and (1) the Secretary General o f the Trade Union Congress o f Tanzania. (3) The Council may co-opt any other person to attend m eetings o f the Council. Functions and pow ers o f the Council

15.—(1) The C ouncil shall be responsible for the perfom ance o f the functions and m anagem ent o f the affairs o f the Authority. (2) For the proper discharge o f the functions o f the Authority, the Council shall, subject to any directions on m atters o f general policy which the M inister may give in that behalf, have the responsibility and power:- (a) to develop Export Processing Zones' policies and to give general policy directions in relation to the develop m ent and operations o f the E xport Processing Zones; (b) to approve plans and program mes related to the and developm ent o f Export estab lish m en t Processing Zones; No. 3 Export Processing Zones (Amendments) 2006 (c) to advice the Minister pursuant to section 3 o f this Act; (d) to determine priority sectors to be prom oted in a particular Export Processing Zone; (e) to approve specific financing requirements for the development o f Export Procesing Zones; (f) to approve the budgets o f the A uthority; and (g) to approve structure and manning levels o f the Authonty. (3) procedure. The Council shall have powers to regulate its own

16.—(1) The Council shall hold four regular meetings every year and may hold more m eetings if the business o f the Authority so requires. (2) Five members shall constitute a quorum for a m eeting o f the Council. (3) The Chairman shall preside at all m eetings o f the Council at which he is present (4) W here the Chairm an is absent, the m em bers present shall elect one o f their num bers to be the Chairm an o f that meeting. (5) The decision o f the Council shall be by majority votes o f the mem bers present and voting, and in the event o f an equality o f votes, the Chairm an o f the m eeting shall have a casting vote.

17.—(1) The Council shall, after consultation with the Minister, appoint a Director General o f the Authority on such term s and conditions as the Council may determine. M eetings and decisions o f the Council D irector General and other e m ploy­ ees (2) The Director General shall be the C hief Executive O fficer o f the Authority and shall be directly responsible to the Council for the day to day adm inistration o f the affairs o f the Authority. 49 No. 3 Export Processing Zones (Amendments) 2006 (3) The D irector General shall be the Secretary- o f the Council and may participate in its deliberations, but shall not be entitled to vote on any resolution or other m atters before the Council. (4) The Council may appoint or em ploy senior officers o f the A uthority on such term s and conditions as the Council may approve. Sources o f funds

18.—(1) The sources o f funds for the Authority shall include:- (a) sum s o f m oney as may be appropriated by the Parliam ent for that purpose; (b) returns on investm ents in the Export Processing Z ones’ infrastructure and industrial sheds; (c) borrowing; (d) such do n ations, grants or bequeaths as the from any person or A uthority m ay organization associated with in the Export Processing Zones as provided for in this Act; its duties receive (e) proceeds from rent and other service charges derived from the activities in the Export Processing Zones; and (f) any other m oneys received by or made available to the A uthority for the purposes o f perform ing its functions under this Act. Use o f the Authority funds

19.—(1) The funds o f the Authority shall be used fo r- (a) initiating, developing and m anaging Export Processing Zones infrastructure in accordance w'ith the provisions o f this Act; (b) providing utilities in the Export Processing Zones; 50 Export Processing Zones (Amendments) 2006 (c) reh abilitating and m aintaining Processing Z ones’ infrastructure; and E xport (d) discharging liabilities arising out o f im plem en­ tation o f this Act. (2) N otw ithstanding the provisions o f subsection (1), the Authority shall retain all the moneys accrued for its continuous use in carrying out its functions.

20.—(1) The funds o f the A uthority shall be m anaged in accordance with the provisions o f the Public Finance Act, 2001. r (2) The funds o f the A uthority shall be audited by the C ontroller and A uditor General or an Auditor appointed by him to act on his behalf. (3) The Authority shall prepare an annual report on the implementation o f the Export Processing Zones operations and subm it the sam e to the M inister, who shall lay the report before the N ational Assem bly.” M anage- men[ and auditing o f the funds o f the Authority Cap. 348 Cap 373

5. The Principal Act is am ended in Part V to VII which relates to sections 15 to 29 by renum bering those sections as section 21 to 35 respectively. R enu­ m bering o f sec­ tions 15 to 29 as sections 21 to 35

6. Section 21 o f the principal Act as renumbered is am ended:- (a) in sub-section (1) by deleting the whole o f sub-section (1) and substituting for it the follow ing- A m e n d ­ m ent o f section 21 2 1 .- ( l) A n investor in the Export Processing Zones shall be entitled to the following incentives- (a) subject to com pliance with applicable condi- tions and procedures, accessing the Export credit guarantee scheme; “ Incenti- ves granted lor in^ the Export Process­ ing Z ones No. 3 Export Processing Zones (Amendments) 2006 (b) remission o f customs duty, value added tax and any other tax charged on raw materials and goods o f capital nature related to the production in the export processing zones; (c) exemption from payment o f corporate tax for an initial period o f ten years and thereafter a corporate tax shall be charged at the rate specified in the Income Tax Act, 2004; Cap 332 (d) exem ption from paym ent o f w ithholding tax on rent, dividends and interest for the first ten years; (e) exemption from payment of all taxes and levies imposed by the local government authorities products produced in the Export Processing Zones for a period o f ten years; (f) exem ption from pre-shipm ent or destination inspection requirem ents; (g) on site customs inspection o f goods in the Export Processing Zones; (h) provisions o f business visa at the point o f entry to key technical, management and training staff for a maximum of two months; thereafter the requirements to obtain a residence pennit; according to the Immigration Act, 1995 shall apply; Cap 54 (i) remission o f custom s duty, value added tax and any other tax payable in respect o f importation o f one adm inistrative vehicle, ambulances, fire fighting equipment vehicles and up to two buses for employees’ transportation to and from the Export Processing Zones; (j) treatm ent o f goods destined into Export Processing Zone as transit cargo; (k) exemption from value added tax on utility and wharfage charges; entitlem ent to an initial autom atic immigrant quota o f up to five persons during the start up period and thereafter, any application for an extra person shall be subm itted to the Authority w^hich shall, in consultation with the Im m igration Departm ent and C om m issioner for Labour, authorize any additional persons deemed necessary' taking into consideration the availability o f qualified Tanzanians, com plexity o f the technology em ployed by the investor and agreem ents reached with the investor; 52 No. 3 Export Processing Zones (Amendments) 2006 (m) access to com petitive, m odem and reliable services available w ithin the Export Processing Zones; and (n) unconditional transferability through any authorized dealer bank in freely convertible currency of:— (i) (ii) net p ro fits or d ividends attrib utab le to the investm ent; paym ents in respect o f loan servicing where foreign loan has been obtained; (iii) royalties, fees and charges in respect o f any technology transfer agreem ent; (iv) the rem ittance o f proceeds (net o f all taxes and other obligations) in the event o f sale or liquidation o f the b u sin ess en terp rises o r any interest attributable to the investm ent; and (v) paym ents o f em olum ents and other benefits to foreign personnel em ployed in connection w ith the business enterprise. in T anzania (b) in sub-section (3) by deleting the word M inister” and substituting for it the w ord “ C ouncil”; (c) in sub-section (4) b y - (i) deleting the word “M inister” and substituting for it the word “ C ouncil”; and (ii) deleting the phrase “ he shall subm it proposals for endorsem ent by the Council before forwarding such proposals” and substituting for it the phrase “shall subm it proposals” .

7. Section 22 o f the principal A ct as renum bered is am ended- (a) in sub-section (1), by deleting the w'hole o f sub-section (1) and the marginal notes and substituting for them the following:- A m end- m ent o f section 22 53 No. 3 Export Processing Zones (Amendments) 2006 Restric- tion on exporta- tion o f goods into custom s territo ry by Export process_ ing Z ones

22. (1) Goods w hich are subject to exemption from taxes within an export processing zone shall not be taken out o f the ZQne e x c e p t ; _ (a) as exports outside the custom s territory; (b) a s exports into the custom s territory subject to :- (i) necessary permits being obtained from the custom s authority; (ii) paym ent o f all applicable levies and other charges; im port duties, (iii) com pliance with all custom s procedures; and (iv) the per centum o f such exports not exceeding total annual tw enty per centum o f the the production o f the establishm ent. investors w ithin (b) in sub-section (2), by deleting the word “Agent” and sub­ stituting for it the word “C ouncil”. Passed in the National Assem bly on the 16th February, 2006. D a m i a n S. F o k a , Clerk o f the National Assembly 54