Dar es Salaam. The government yesterday extended the registration of companies’ beneficial owners for another six months after low compliance and requests from the firms.
Tanzania’s Business Registration and Licensing Agency (Brela) has been receiving the registration since last year.
The minister for Industry and Trade, Prof Kitila Mkumbo, said there were challenges in the registration process and that the companies requested extension of the December 31, 2021 deadline.
“I direct Brela to continue creating awareness among the companies on what is expected of them, its importance and convince them to register their respective beneficial owners,” he said in a statement.
“By virtue of the powers vested in me by the Companies Act, and in response to a plethora of requests by company owners, I have extended the deadline for disclosure of Beneficial Ownership to June 2022. I urge company owners to fulfill their legal obligation within this period,” he said.
Tanzanian firms are required to have registered with Brela persons who either directly or indirectly have substantial control, economic interest or any other economic benefit in the entities.
The Finance Act 2020 amended the Anti-Money Laundering Act, the Companies Act, and the Trustees Incorporation Act to introduce new reporting requirements in respect of beneficial owners. The stated purpose was to ensure access to accurate and up-to-date records of beneficial owners of legal entities for information required, among other things, for tax purposes, control of anti-money laundering, and terrorism financing.
Until January 3, 2022, Prof Mkumbo said only 14,026 companies had complied with the regulatory requirement, representing about 14 percent of the registered firms.
Last week, Brela’s acting director of companies and business names, Mr Meinrad Rweyemamu, said firms that were required to submit the information include all companies incorporated in Tanzania mainland as private companies by limited shares, or public companies with certificate of incorporation.
Foreign companies with branches in Tanzania are not required to submit the information, he said.
“We expect companies to continue submitting their information before the deadline because if competent authorities investigate organs and find out that the company did not fill its beneficial ownership information or filed false or misleading information, the company will have committed an offence and shall upon conviction by a court be liable to a fine of between Sh5 million and Sh10 million,” he said in an interview.
He said companies play a great role in contributing to the economy of the jurisdictions in which they operate but experience has shown that some companies are being misused into committing criminal acts that are not socially acceptable, including money laundering, terrorism financing, corruption and tax evasion.
According to him, the World Bank and other international institutions involved in business supporting have committed to change the situation by introducing the beneficial ownership concept which is supported by the international community.
A beneficial owner is a person who does not necessarily appear in company documents but owns more than 25 percent of the investment or decision-making in the company, he clarified.
At present, every company must keep a register of its shareholders in these companies and these registers are kept open for anyone wishing to search.
However, these registers do not contain information of the beneficiaries of those companies, thus making it difficult to identify the real beneficiaries or owners of those companies, he said.
According to him, the information of the beneficiaries is confidential and will not be disclosed to the public but will be provided to the competent authorities which are primarily institutions involved in investigating and combating criminal activities such as corruption and terrorism.