Tanzania and Türkiye have signed a double taxation agreement aimed at easing cross-border investment, as both countries seek to deepen economic ties and unlock new capital flows.

The agreement is designed to eliminate the risk of income being taxed in both jurisdictions, a longstanding barrier for investors operating across borders. By providing clearer tax rules and reducing compliance costs, officials say the deal will improve predictability and make Tanzania a more attractive destination for Turkish businesses.

The pact builds on an earlier bilateral investment framework signed in 2011, but one that lacked a comprehensive tax structure. Analysts note that without such agreements, companies often face uncertainty around profit repatriation, dividends and withholding taxes—factors that can deter long-term commitments.

Trade between the two countries has grown steadily but remains imbalanced. In 2024, total trade reached about $281.7 million, with Türkiye exporting the bulk of goods while Tanzania’s exports remain relatively low. Turkish investments in Tanzania are estimated at roughly $300 million across around 30 projects, representing a modest share of total foreign direct investment.

Officials expect the tax agreement to help close that gap by encouraging more diversified investment into sectors such as manufacturing, construction and energy. Countries with similar treaties have historically seen stronger inflows of foreign capital, as investors prioritize jurisdictions with clear and stable tax regimes.

However, the deal also highlights the pace of policy execution. Negotiations took more than eight years to conclude, underscoring the bureaucratic and technical complexities involved in aligning tax systems across countries.

For Tanzania, the agreement signals a broader push to position itself as a competitive investment hub in East Africa, leveraging policy reforms to attract international capital and strengthen strategic partnerships beyond traditional markets.