Tanzania has taken a bold step toward enhancing its foreign investment landscape by signing a Double Taxation Avoidance Agreement (DTAA) with the Czech Republic. This strategic policy move is expected to accelerate the country’s journey toward becoming a major destination for foreign direct investment (FDI) in Africa.
The agreement, signed in Dar es Salaam by Finance Minister Dr. Mwigulu Nchemba and Czech Ambassador Ms. Nicol Adamcova, is part of broader economic reforms that reflect Tanzania’s commitment to fostering a more transparent, predictable, and investor-friendly environment.
By eliminating the risk of double taxation on income earned in both countries, the DTAA provides legal and tax certainty for investors. It ensures that income such as dividends, interest, royalties, and capital gains is taxed only once, rather than both in Tanzania and in the Czech Republic. This is expected to unlock new flows of capital, encourage cross-border partnerships, and position Tanzania as a reliable hub for investment in sectors such as energy, manufacturing, infrastructure, and technology.
Driving Business Confidence and Global Partnerships
According to Dr. Nchemba, the agreement reflects Tanzania’s ambition to become a key economic player in the region by strengthening bilateral ties and aligning with international best practices. He emphasized that the deal complements President Samia Suluhu Hassan’s administration’s wide-ranging reforms in tax digitization, investment facilitation, and business environment improvement.
Recent government efforts have included the digital transformation of the Tanzania Revenue Authority (TRA), removal of bureaucratic bottlenecks in company registration, and the strengthening of the Tanzania Investment Centre (TIC). These steps are designed to reduce regulatory friction and lower the cost of doing business.
Ambassador Adamcova noted that the agreement is a direct response to increased investor interest from Czech businesses, particularly in areas such as renewable energy, construction, health equipment, and agriculture. “Tanzania is building a reputation as a stable and forward-looking economy in East Africa. This agreement shows that we are ready to deepen our cooperation in mutually beneficial ways,” she stated.
Unlocking Regional Potential
Tanzania’s strategic location along the Indian Ocean and its membership in the East African Community (EAC) and the Southern African Development Community (SADC) give it access to a combined market of over 400 million consumers. The new tax agreement adds further momentum to the government’s efforts to integrate Tanzania into regional and global value chains.
Experts believe that the DTAA will contribute to increasing the competitiveness of Tanzania’s economy by improving its standing in international rankings, such as the World Bank’s Ease of Doing Business Index and the World Economic Forum’s Global Competitiveness Report.
Research by the Organisation for Economic Co-operation and Development (OECD) suggests that countries with tax treaties experience up to 30% higher FDI inflows, largely due to reduced investment risk and clearer tax obligations.
Looking Ahead: A Stronger Investment Climate in Tanzania
This latest policy development is a signal to the international investment community that Tanzania is open for business and serious about staying competitive. As part of its ongoing economic diplomacy, the government plans to negotiate additional tax agreements with other European, Asian, and African countries, fostering a stronger framework for cross-border trade and investment.
Analysts say that with the right infrastructure, policy stability, and investor confidence, Tanzania could see significant gains in job creation, skills transfer, and technology exchange, helping to deliver long-term socioeconomic development.
As Tanzania continues to implement its Third Five-Year Development Plan (FYDP III), which focuses on industrialization, human capital, and economic transformation, agreements like the DTAA are viewed as essential building blocks. Stakeholders across public and private sectors remain optimistic that such reforms will accelerate the country’s emergence as one of Africa’s most dynamic and investment-friendly economies.
