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THE COMPANIES (EXTENSION OF PERIOD FOR SUBMISSION OF INFORMATION OF BENEFICIAL OWNERSHIP) NOTICE GOVERNMENT NOTICE NO. 189 OF 2021 (GN. 189/2021)

1.0       BRIEF BACKGROUND

1.1       Section 7 of the Finance Act, 2020 amends Section 2 of the Companies Act, 2002 and a new concept “Beneficial Owner” is introduced. Beneficial Owner is defined to mean a natural person:

  • who directly or indirectly ultimately owns or exercises substantial control over an entity or an arrangement;
  • who has a substantial economic interest in or receives substantial economic benefit from an entity or an arrangement directly or indirectly whether acting alone or together with other persons;
  • on whose behalf an arrangement is conducted; or
  • who exercises significant control or influence over a person or arrangement through a formal or informal agreement. 

1.2       Section 16 of the Finance Act 2020 further amends Section 451 of the Companies Act 2002 to establish the Register of the Beneficial Owners.

1.3       Section 17 of the Finance Act 2020 moreover amends Section 459 of the Companies Act 2002 by adding immediately thereafter Section 459A, which states that:

(1).      A company incorporated under this Act before the 1st day of July, 2020 shall, within six months from the 1st day of July, 2020 comply with requirements of section 14 (2)(b), and

(2).      The Minister may, by notice published in the Gazette, extend the period of compliance stipulated under subsection (1).

2.0       GN 189/2021

2.1       In exercise of the powers conferred to him/her by Section 459A of the Companies Act, 2002 (as Amended by the Finance Act 2020), the Minister through GN 189/2021 extended time for the beneficial owner to submit their information to the Registrar from 6 months to 12 months.

3.0       MOTIVE BEHIND INTRODUCTION OF THE BENEFICIAL OWNER PERCEPTION

3.1       To assist law enforcement agencies to prevent and or combat tax evasion, money laundry and terrorism financing.

4.0       DISCLAIMER: There is no any professional relationship formed between Lexicon Attorneys Law Company and the reader of this article; for more details please contact your legal attorney.

Written by:

Aneth K.

Intern – Lexicon Attorneys Law Company

Edited by:

Jimmy Mrosso

Partner – Lexicon Attorneys Law Company

 

Date: 25th February 2021

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TAX HIGHLIGHTS FROM THE 2020/2021FINANCIAL BUDGET

  1. No income tax for special economic zones products.
  2. Skills Development Levy reduced to 4%.
  3. Tax Objections to be decided within 6 months.
  4. Withholding tax on banks agents of 10% has been introduced.
  5. Income tax threshold to 270,000 per month from 170,000 to employees
  6. Excise duty on powdered beer and powdered juice.
  7. Capital gain tax on land transfer business.
  8. Minister to have power to exempt capital expenditure on special projects not exceeding Tshs. 1B.
  9. No vat on insurance crops business.
  10. Gross income for cooperatives/saccos to be taxed increased from Tzs. 50m to Tzs. 100m.
  11. Imports duty of 0% on covid related inputs.
  12. Allowable deductions for expenditure on aids / covid 19 contributions
  13. Zero import duty on all packaging /caps for locally produced wines and agriculture produces to be processed within the country.
  14. Vehicle special numbers @ Tshs 500k.