Dar es Salaam – Tanzanian companies are required to submit their beneficial ownership information by April 15, 2025, as mandated by the Finance Act No. 8 of 2020.
Failure to comply may result in penalties between Sh5 million and Sh10 million, along with restrictions on essential business activities.
The Finance Act, which initially required compliance starting January 1, 2021, has seen its deadline extended several times, with the latest push now set for April 15, 2025.
Authorities emphasize that stringent penalties for non-compliance will be enforced, including restrictions on submitting annual returns, altering company details, obtaining company status reports, registering charges, accessing online registration systems, and more.
The push for beneficial ownership disclosure is integral to enhancing corporate transparency and accountability in Tanzania. Industry experts indicate that historical global financial systems have suffered from opacity, allowing individuals and entities to mask ownership through convoluted structures. This lack of transparency is closely associated with corruption, money laundering, and tax evasion, undermining trust in both private and public sectors.
Tanzania’s economy is growing in sectors such as mining, agriculture, and tourism but faces challenges from illicit financial flows. By implementing beneficial ownership disclosure requirements, Tanzania aims to bolster trust and accountability within its corporate environment, aligning with its economic ambitions to transition to a middle-income economy.
Enhanced corporate governance and transparency are critical for attracting foreign investment while curbing corruption and tax evasion. Furthermore, transparency is expected to improve tax enforcement, ensuring companies fulfill their fiscal responsibilities and strengthen domestic resource mobilization.
It has been pointed out that transparency will foster legitimate investments, increase investor confidence, and promote international cooperation in combating financial crimes.
Experts stress the necessity of a robust verification system for ownership records, particularly to prevent financial crimes and enhance national security. The verification of ownership also ensures adherence to national laws and curbs criminal activities like money laundering.
The Beneficial Ownership Information law is crucial for identifying the true owners of businesses, with past implementations highlighting its necessity amid concerns from various sectors. Instances have been noted where foreign investors bypass investment laws by using local citizens as proxies to register businesses, leading to potential tax evasion and regulatory avoidance.
The implications extend beyond economic issues, raising national security concerns. By disguising their identity, individuals involved in illegal activities may exploit legitimate businesses for personal gain, making strict enforcement of the beneficial ownership law essential for safeguarding both the economy and national security.
Public accessibility to beneficial ownership information is fundamental for true transparency, particularly for international companies with multiple stakeholders. Without sufficient ownership disclosures, understanding the real beneficiaries behind Tanzanian operations becomes challenging, hindering accountability and due diligence.
As the April 15, 2025 deadline approaches, compliance with beneficial ownership regulations is critical for Tanzanian companies to avoid penalties and operational restrictions.
