Oman. In a significant development, the governments of Tanzania and the Sultanate of Oman have signed an agreement aimed at eliminating double taxation and preventing tax avoidance.
The agreement, known as the “Agreement for the Elimination of Double Taxation with Respect to Taxes on Income and Prevention of Tax Avoidance and Evasion,” was signed in Muscat, Oman, this week, by Tanzania’s Minister for Finance, Dr Mwigulu Nchemba, and the Chairman of the Oman Tax Authority, Mr Nasser Al-Jashmi.
Dr Nchemba emphasized that the signing of this agreement marks an important step in President Dr Samia Suluhu Hassan’s efforts to open up Tanzania’s economy and attract international investment.
He further explained that the agreement will ensure that investors and businesses engaged in activities between Tanzania and Oman are only taxed once, rather than being subject to double taxation on the same income.
“This will help eliminate previous barriers to business growth in both countries,” Dr Nchemba stressed.
Oman’s exports to Tanzania totaled $100.32 million in 2023, according to the United Nations COMTRADE database on international trade.
Key products exported to Tanzania include mineral fuels, oils, distillation products, plastics, fertilizers, aluminum, and machinery, among others.
In contrast, Tanzania’s exports to Oman amounted to $16.27 million during the same period.
Some of the main products exported from Tanzania to Oman include meat and edible meat offal, residues and waste from the food industry, animal fodder, edible fruits, nuts, citrus fruit peels, melons, and edible vegetables, among others.
The data reveals a significant trade imbalance between Oman and Tanzania, with Oman exporting far more to Tanzania than the reverse.
Again the data suggests that Tanzania is heavily reliant on imports from Oman, particularly in sectors like energy, machinery, and fertilizers, which are essential for Tanzania’s industrial and agricultural development.
On the other hand, Tanzania’s exports to Oman are more focused on agricultural products, such as meat, fruits, and vegetables, indicating that Tanzania has a comparative advantage in these sectors.
The trade imbalance could highlight opportunities for Tanzania to diversify its exports to Oman and other markets, while potentially increasing investment in industries where it can boost production and add value.
The agreement between Tanzania and Oman, particularly in eliminating double taxation, could also create conditions to reduce this imbalance over time by fostering greater investment and trade diversification.
The agreement is also expected to encourage significant investment from Oman into Tanzania, particularly from large companies owned by royal families, as well as private investors.
This investment is anticipated to contribute to the growth of Tanzania’s production sectors, industrial development, and the creation of more jobs for Tanzanians.
Additionally, Tanzanian investors will now be able to invest in Oman without facing tax-related barriers, benefiting from protection under the agreement to avoid double taxation.
This opens up significant opportunities for Tanzanian businesses to expand into international markets, especially in the Gulf region.
Overall, Dr Nchemba highlighted that the agreement is expected to open a new chapter of economic cooperation between Tanzania and Oman.
