TANZANIA has signed an agreement with the Czech Republic aimed at avoiding double taxation and preventing fiscal avoidance and evasion in respect to income tax.

Dr. Mwigulu Nchemba, the Finance minister, at the signing ceremony in Dar es Salaam yesterday, said the agreement uplifts investment openings and economic growth. Countries with effective double taxation treaties attract up to 30 percent more foreign direct investment (FDI), he said, citing data from the Organisation for Economic Co-operation and Development (OECD).

“This agreement is a catalyst for transformation. It eliminates the risk of the same income being taxed in two jurisdictions,” he said, elaborating that it protects profits, enhances investor confidence and fosters fair taxation policies.

Tanzania and the Czech Republic enjoy a long-standing diplomatic relationship, starting from the Czech Republic’s independence in 1993, which has over the years expanded into tangible economic cooperation.

The UN Comtrade database indicates that bilateral trade between the two nations reached $16.2m in 2022, with growing interest in sectors such as machinery, electrical equipment, transport technology and agriculture.

The minister praised President Samia Suluhu Hassan for preparing the framework for the agreement by initiating reforms that have significantly improved Tanzania’s business environment.

The reforms include simplifying business registration and licensing processes, digitizing tax and customs systems, reforming land and labour regulations, and establishing special economic zones with strategic incentives for large-scale investors, he stated.

As a result of these efforts, Tanzania is now recognized as one of the leading investment destinations in Sub-Saharan Africa, he said, citing a 2023 report by KPMG, an international audit firm, ranking the country third on the continent behind South Africa and Nigeria for reforms in the business environment.

With projected GDP growth of 6.0 percent in 2025 and strategic access to over 400 million consumers in East and Southern Africa, Tanzania is positioning itself as a regional trade and investment hub, he declared.

Nicol Adamcová, the Czech Republic non-ambassador based in Nairobi, hailed the long-standing and productive partnership between the two countries, underlining that the agreement enables Tanzanian investors to operate in the Czech Republic without facing tax-related restrictions.

The pact reflects a high level of mutual trust between the two countries, she said, noting that without that trust, time and effort would have to be invested for the negotiations.

The agreement is clear evidence of the stable business environments and investment climate in both countries, she said, affirming that the double taxation agreement is expected to pave the way for deeper bilateral cooperation and increased private sector engagements.