Tanzania - Methods of Payment Tanzania-Methods-of-Payment
For business-to-business transactions, most companies (both local and foreign) choose to make payments via check. Banks take 7-14 days to clear checks and collect funds through the central bank’s national payment system electronic clearinghouse. Companies prefer to make payments by check for both internal and external management and control of funds. Companies tend to prefer direct payment in cash for petty transactions. For parties in different cities or regions, direct payments through commercial bank accounts in the form of wire transfers and SWIFT are very common. Payments above TZS 10 Million (about $5,000) cannot be made by check but should be made through electronic transfer. For international trade transactions, documentary credits such as letters of credit (LOCs), documentary collections and drafts are widely used. Prepayment, cash with order and cash-in-advance, are the most desirable terms by local sellers.
Factoring and open account or credit terms are not common in Tanzania, despite understanding by Tanzanian companies that some of the largest U.S. firms will make purchases only on an open account basis.
VAT exemption must be authorized by TRA in advance of individual payments. Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.