Digital Business Comparative Guide

1 Legal framework

1.1 Which key legislative and regulatory provisions govern digital business in your jurisdiction?

• The Electronic and Postal Communications Act, 2010 (EPOCA) gives the Tanzania Communications Regulatory Authority (TCRA) the power to:
• • regulate electronic communications systems and services; and
  • issue licences.
• The Electronic Transactions Act, 2015 governs:
• • electronic transactions,
  • e-government services; and
  • the use of secure electronic signatures.
• The Tanzania Communication Regulatory Authority Act, 2003 established the Tanzania Communication Regulatory Authority to cover information and communications technology (ICT) applications.
• The Fair Competition Act, 2003 promotes a competitive market and ensures that the rights of consumers are protected.
• The National Payment System Act 2015 provides the legal framework for payment systems to operate in Tanzania.
• The Income Tax Act (Non-Resident) Electronic Services Provider Regulations, 2022 impose income tax on non-resident electronic service providers.
• The Value Added Tax (Registration of Non-Resident Electronic Service Suppliers) Regulations, 2022 require non-resident suppliers of electronic services to register for value-added tax (VAT) in Tanzania.
• The Cybercrime Act, 2015 criminalises offences related to computer systems and provides for the investigation, collection and use of electronic evidence, and related matters.
• The Electronic and Postal Communications Act (EPOCA) Consumer Protection Regulations, 2018 safeguard consumers using electronic communication services in Tanzania.
• The EPOCA (Quality of Service) Regulations, 2018 require service providers to maintain quality across mobile and internet services.
• The EPOCA (Domain Names Management) Regulations, 2020 provide guidelines for the registration and management of domain names in Tanzania.
• The EPOCA (Digital and Other Broadcasting Networks) Regulations, 2018 establish guidelines for the management and operation of digital networks in Tanzania.
• The EPOCA (Electronic Communications Equipment Standards and E-Waste Management) Regulations, 2020 outline procedures for managing electronic waste in Tanzania.

1.2 Do any special regimes apply (eg, in specific sectors or to certain types of products)?

Yes, there are special regimes that apply to digital businesses in Tanzania, particularly in the areas of taxation and regulation:

• Taxation of electronic services: Non-resident suppliers of electronic services must register for both income tax and VAT if they provide services to consumers in Tanzania. These include services such as:
• • web hosting;
  • software;
  • access to databases; and
  • digital content such as music and films.
• Digital service tax (DST): Non-resident providers of cross-border electronic services must also comply with the DST obligations. These include a 2% DST on all gross payments for electronic services sourced to Tanzania. The Tanzanian Revenue Authority (TRA) has developed a simplified registration framework for these non-resident providers.

As for regulation and oversight, the financial sector is regulated by the apex bank, the Bank of Tanzania (BoT). The BoT provides guidelines, oversight mechanisms and legislative structures to ensure that the financial system is secure and stable, characterised by high levels of integrity.

The Fair Competition Commission (FCC) acts as a watchdog in ensuring that consumer rights are upheld and protected in the field of e-commerce. Its inherent functions include:

• monitoring and regulating the market;
• ensuring the use of fair trading practices; and
• resolving consumer-related disputes between the different parties in the market.

These regimes are designed to ensure that digital businesses:

• contribute fairly to the Tanzanian economy; and
• comply with local tax laws.

1.3 Which bodies are responsible for implementing and enforcing the digital business regime in your jurisdiction? What is their general approach in doing so and what are their key areas of focus?

The main bodies that have authority to enforce and implement laws and guidelines regarding digital business in Tanzania are as follows:

• Tanzania Communications Regulatory Authority (TCRA): The TCRA is responsible for overseeing electronic communications and ensuring that service providers adhere to quality standards and comply with regulatory standards. The TCRA monitors these service providers and issues licences for them.
• Bank of Tanzania (BOT): As the apex bank in Tanzania, the BoT bears the burden of regulating all financial institutions, including fintech platforms and online payment systems. It ensures that transparency, integrity and stability are maintained in the financial system in order to facilitate smooth, efficient and secure payment mechanisms.
• Fair Competition Commission: The FCC's focal task is to guarantee a competitive market environment. The FCC monitors the behaviour of market participants and ascertains that the market runs and functions as per the required guidelines. In the event of anti-competitive practices, the FCC investigates potential transactions that may destabilise a competitive market. It also investigates anti-competitive practices and imposes penalties on parties that violate the competition laws.
• Tanzania Revenue Authority: The TRA oversees the collection of all taxes relevant to digital businesses as mandated by:
• • the Income Tax Act (Non-Resident) Electronic Services Provider Regulations, 2022; and
  • the Value Added Tax (Registration of Non-Resident Electronic Service Suppliers) Regulations 2022.
• It also oversees the taxation of online content creation.

2 Market snapshot

2.1 How embedded is digital business in your jurisdiction?

The integration of digital business in Tanzania has seen substantial progress over the last few years, as follows:

• Regulatory framework: The Tanzanian government has established a well-rounded regulatory framework to support digital business over the last few years, including laws governing everything from e-waste management to domain names and service quality. The framework keeps shifting dynamically due to the multifaceted nature of digital business, which keeps evolving from time to time
• Infrastructure: Suitable infrastructure – such as the National Optical Fibre Backbone, communication towers and other network facilities have enhanced connectivity and digital business – across the country.
• Cost reduction: The government's efforts to reduce communication costs have made digital services more affordable. These include:
• • lowering the average price per minute for in-network calls and data costs; and
  • promoting the widespread adoption of digital business practices.
• Support for startups: Support for startups and social enterprises is provided by organisations such as the Tanzania Investment Centre. This support includes compliance assistance and advocacy for favourable policies, which have contributed to a thriving entrepreneurial ecosystem.

In summary, digital business is well embedded in Tanzania, supported by:

• an accommodating legal framework;
• widespread internet access;
• robust infrastructure;
• affordable services; and
• a supportive ecosystem.

This integration makes it easier for:

• businesses to operate digitally; and
• consumers to access digital services.

2.2 Are the main players domestic, foreign and/or international?

The digital business landscape in Tanzania features a mix of both local and international players, as follows:

• Local players:
• • Tech startups: Numerous Tanzanian tech startups are driving innovation in areas such as fintech, healthtech and agritech. These startups leverage local knowledge and address specific needs within the Tanzanian market.
  • Telecommunications companies: Local telecoms companies play a crucial role in providing the necessary infrastructure for digital businesses, including mobile money services and internet connectivity.
  • Digital service providers: Local companies offering digital marketing, software development and IT services are essential in supporting the digital transformation of traditional businesses.
• International players:
• • Global tech giants: International companies provide cloud services, software solutions and digital tools that are widely used by Tanzanian businesses. These tools help local businesses to scale and improve efficiency.
  • Foreign investment: International investors and venture capital firms are increasingly investing in Tanzanian digital startups, providing the capital needed for growth and expansion.
  • Cross-border services: International digital platforms offer services such as online education, remote work tools and digital payment solutions, contributing to the digital ecosystem in Tanzania.

Together, these local and international players have created a robust digital business environment in Tanzania, which:

• fosters innovation;
• improves efficiency; and
• expands market reach.

2.3 Describe the key features of the following digital business sectors in your jurisdiction: (a) E-commerce; (b) Fintech and (c) Digital health.

(a) E-commerce

E-commerce in Tanzania has experienced significant growth, largely due to the integration of online payment systems. These services provide convenient and secure payment transaction solutions, which are seamlessly integrated into e-commerce platforms. This integration facilitates smoother shopping experiences for consumers, enabling them to make purchases and complete transactions with ease. The widespread use of mobile money has also increased the accessibility of e-commerce, allowing more people to participate in the digital marketplace.

(b) Fintech

The fintech sector in Tanzania has revolutionised financial services by making it easier to:

• transfer money;
• pay bills; and
• manage accounts, including savings.

Mobile money services have played a crucial role in financial inclusion, enabling individuals without traditional bank accounts to participate in the digital economy. Additionally, money lending services offered by companies provide quick access to loans, especially for small-scale borrowers. These services often use alternative data to assess creditworthiness, making it possible for individuals without traditional credit histories to obtain loans.

(c) Digital health

The digital health sector in Tanzania has made significant strides with the introduction of remote healthcare consultation platforms. These platforms allow patients to access medical services and consultations without physically visiting healthcare facilities. This has improved access to healthcare, especially in remote areas. Additionally, the digitisation of patient records has enhanced data management for healthcare providers, ensuring better patient care and streamlined operations. Online pharmacies have also emerged, offering the sale and delivery of medications through digital platforms and thus further integrating technology into the healthcare sector.

3 Technologies

3.1 How are the following digital business technologies regulated in your jurisdiction and what key issues should be borne in mind in relation to each? (a) Online payments (including cryptocurrencies and digital wallets); (b) Artificial intelligence; (c) Connected devices/Internet of Things and (d) Other (eg, cloud services, quantum technology, chip technology).

(a) Online payments

Online payments in Tanzania are governed by the National Payment Systems Act, 2015. This act mandates the licensing and operation of payment systems, including online payment services. All online payment service providers must be registered with the Bank of Tanzania (BoT). Providers must adhere to know-your-customer and anti-money laundering standards

(b) Artificial intelligence (AI)

AI is a relatively new field and comprehensive regulations on new emerging technologies are still being developed as per a recent report issued by the Ministry of Information, Communication and Information Technology. Digital businesses must ensure that AI applications comply with data protection laws to safeguard personal information

(c) Connected devices/Internet of Things (IoT)

IoT technologies are governed by the National Information and Communications Technology (ICT) Policy. The Tanzania Communications Regulatory Authority (TCRA) oversees the regulation of connected devices and IoT infrastructure by:

• ensuring that IoT devices and infrastructure adhere to regulatory standards set by the TCRA; and
• addressing potential security vulnerabilities in connected devices to protect user data and privacy.

(d) Other technologies (eg, cloud services, quantum technology, chip technology)

• Cloud services: These are regulated under the National ICT Policy and the Data Protection Act of 2019. Providers must ensure data security and privacy, complying with local data protection laws.
• Quantum technology: There are no specific regulations for quantum technology in Tanzania.
• Chip technology: This falls under the broader ICT regulatory framework, with specific standards and guidelines issued by the TCRA to ensure compliance and interoperability.

4 Data

4.1 What is the regime in your jurisdiction for regulating the processing of personal data and what specific implications does this have for digital business?

The primary law governing personal data in Tanzania is the Data Protection Act of 2019. The act:

• lays down the obligations of individuals and companies which control and process data;
• stipulates the rights of data subjects; and
• sets out the penalties to be imposed in the event of non-compliance with its provisions.

The effects of the regime on digital businesses are as follows:

• Digital businesses must invest in infrastructure to ensure that:
• • data security guidelines are observed;
  • data subject consent is obtained for the collection of user data; and
  • privacy policies are kept up to date.
• Digital businesses must adopt robust data protection strategies and technologies.
• Compliance is emphasised, as failure to comply leads to exorbitant fines being levied on the contravening parties.

4.2 What is the regime in your jurisdiction for regulating the processing and sharing of non-personal data and what specific implications does this have for digital business?

The processing and sharing of non-personal data are primarily guided by the National Information and Communications Technology (ICT) Policy and various sector-specific guidelines:

• The National ICT Policy provides a framework for the management and use of ICT resources, including non-personal data. It emphasises the importance of:
• • data security;
  • interoperability; and
  • the ethical use of data.
• Electronic Data Sharing and Exchange Guidelines: Issued by the e-Government Authority, these guidelines prescribe the standards for electronic data sharing and exchange among public institutions. They ensure that data is shared securely and efficiently.

The implications for digital businesses are as follows:

• Digital businesses must ensure that non-personal data is processed and shared securely, adhering to the guidelines set forth by the relevant authorities. This includes implementing robust cybersecurity measures to protect data from breaches and unauthorised access.
• Businesses must comply with the standards and guidelines for data sharing and interoperability. This ensures that their systems can effectively communicate with other systems, facilitating seamless data exchange.
• Companies must use non-personal data ethically, respecting the principles outlined in the National ICT Policy. This includes:
• • avoiding misuse of data; and
  • ensuring that data usage aligns with the intended purposes.
• Proper regulation of non-personal data creates a conducive environment for innovation and growth. Businesses can leverage data to:
• • develop new products and services;
  • improve operational efficiency; and
  • enhance customer experiences.

In summary, the regulation of non-personal data in Tanzania is designed to ensure secure, ethical and efficient data processing and sharing.

5 Cybersecurity

5.1 Does your jurisdiction have specific cybersecurity legislation and what implications does this have for digital business?

Yes, Tanzania has specific cybersecurity legislation that significantly impacts digital businesses:

• The Cybercrimes Act, 2015 provides a comprehensive framework for the prevention, detection and response to cybercrime. It criminalises various offences related to computer systems and information and communication technology (ICT), such as:
• • illegal access;
  • data espionage; and
  • cyberbullying.
• The Tanzania Communications Regulatory Authority Act regulates the use of information technology and telecommunication sectors to ensure compliance with cybersecurity standards. It establishes the Computer Emergency Response Team (CERT), which supports the detection and response to cyber threats.

The implications for digital businesses are as follows:

• Digital businesses are mandated to report cyber incidents to both the Tanzania Communications Regulatory Authority (TCRA) and CERT. This coordination helps to mitigate risks and ensure that cyber incidents are managed effectively. Businesses must also develop and maintain incident response plans to promptly address cybercrime incidents.
• Digital businesses must adopt and maintain robust data protection systems to safeguard against unauthorised access and cyber threats.
• Businesses must conduct regular audits of their cybersecurity measures to ensure their effectiveness.
• Businesses must report any cyber incidents to the TCRA and CERT to facilitate coordinated responses and risk mitigation.
• Digital businesses must develop efficient incident response plans to manage and mitigate the impact of cybercrime incidents promptly.

These legislative measures ensure that digital businesses in Tanzania operate within a secure and regulated environment, thereby protecting both the businesses and their customers from cyber threats.

6 Financial crime prevention

6.1 What provisions govern money laundering and other forms of financial crime in your jurisdiction and what specific implications do these have for digital businesses?

In Tanzania, the primary legislation governing money laundering and other forms of financial crime is the Anti-Money Laundering (AML) Act (CAP 423).

The key provisions of the act cover the following:

• Financial Intelligence Unit (FIU): The act establishes the FIU, which is responsible for collecting, analysing and disseminating financial information to combat money laundering and other financial crimes.
• Customer due diligence: Digital businesses must verify the identity of their customers and maintain accurate records.
• Suspicious transaction reporting: Digital businesses must report any suspicious transactions to the FIU.
• Record keeping: Businesses must maintain records of transactions for a minimum period, typically five years.
• Internal controls and training: Digital businesses must establish internal controls and provide training to their employees on AML measures.

The implications for digital businesses are as follows:

• Compliance costs: Implementing AML measures can be costly for digital businesses, as they need to invest in systems and processes for customer verification, transaction monitoring and reporting.
• Legal consequences: Failure to comply with AML regulations can result in legal penalties, including fines and imprisonment for responsible individuals. Digital businesses must ensure they adhere to all legal requirements to avoid such consequences.
• Enhanced security measures: The implementation of AML measures can enhance the overall security of digital businesses, protecting them from fraud and other financial crimes.

7 Consumer protection

7.1 Do the consumer protection measures in your jurisdiction have specific implications for digital business?

Consumer protection measures in Tanzania have several specific implications for digital business, including the following:

• Data protection and privacy: The Personal Data Protection Act in Tanzania requires digital businesses to ensure the privacy and security of consumer data. This includes:
• • obtaining consent before collecting personal data; and
  • implementing measures to protect this data from unauthorised access.
• Product safety and liability: Digital businesses must ensure that the products they sell online meet safety standards. The government has taken steps to combat counterfeit and substandard goods, which are prevalent in the market. This means that online businesses must be vigilant about the quality of the products they offer.
• Transparency and fair trading: E-commerce platforms must provide clear and accurate information about products and services. This includes:
• • pricing;
  • terms of sale; and
  • return policies.
• Misleading advertisements and unfair trading practices are prohibited.
• Consumer redress mechanisms: There are established mechanisms for consumers to lodge complaints and seek redress if they encounter issues with digital transactions. These include action before the Fair Competition Commission, which handles complaints relating to unfair business practices.
• Telecommunications consumer protection: Digital businesses that operate through telecommunications must adhere to specific regulations that protect consumers from unfair practices, such as:
• • hidden charges; and
  • poor service quality.

8 Taxation

8.1 Does your jurisdiction impose a digital services or similar tax; and/or in light of digital business structures, has it introduced rules to modify the level of presence or connection required to fall under the tax regime? If so, to what extent has your jurisdiction committed to removing these taxes or measures should the Organisation for Economic Co-operation and Development-negotiated Multilateral Convention on a new taxing right (Amount A of Pillar 1) come into effect?

Yes, Tanzania imposes several taxes on digital services and has introduced specific rules to address the unique aspects of digital business structures, as follows:

• National Payment Systems Act, 2022: This act imposes a levy on all electronic money transactions, including mobile money services and automatic teller machine services. This levy is collected by the local tax authority to ensure that digital financial transactions contribute to the national revenue.
• Income tax on digital businesses: The Income Tax Act was amended by the Finance Act, 2022 to define ‘digital businesses' and include them under the tax regime. They require non-resident persons earning income from digital services in Tanzania to pay a 2% tax on their gross income.
• Withholding tax on digital content creators: The Finance Act, 2024 imposed a withholding tax on payments made to digital content creators. This rule mandates that individuals or entities paying for digital content must withhold a portion of the payment as tax and remit it to the tax authorities.
• Taxation of digital assets: Owners of digital assets, such as cryptocurrencies and non-fungible tokens, must pay taxes
• Value-added tax on electronic services: Non-resident suppliers of electronic services to Tanzania must register with the Tanzania Revenue Authority (TRA) for value-added tax purposes.

Commitment to Organisation for Economic Co-operation and Development (OECD) Multilateral Convention: Currently, Tanzania has not established specific frameworks to mitigate tax concerns in the event that the OECD-negotiated Multilateral Convention on a new taxing right (Amount A of Pillar 1) comes into effect. This means that Tanzania's existing digital service tax measures will remain in place until any international agreements necessitate changes.

8.2 What are the main tax measures, trends and developments in your jurisdiction with implications for digital businesses?

The government has introduced several new taxes to address the gaps in digital business and allow for the development of the digital business sector. These include the following:

• Digital services tax (DST): Tanzania has introduced a 2% DST on the gross payment for digital services provided in the country. This tax affects various digital services, including:
• • streaming platforms;
  • online advertising; and
  • digital marketplaces.
• Value-added tax (VAT) on digital services: Digital services are subject to VAT at a rate of 18%. This applies to services such as e-books, software and online courses, ensuring that digital transactions contribute to the national revenue.
• Income tax for digital content creators: Digital content creators must now pay an income tax of 3%-5%. This policy aims to formalise the digital content sector and increase its economic contribution.

We expect to see more developments over the coming months relating to new digital businesses (eg, cryptocurrency, artificial intelligence), including robust frameworks that support economic development in this sense.

9 Cross-border trade

9.1 Have any legal measures been implemented to facilitate digital cross-border trade in your jurisdiction?

In Tanzania, several legal measures have been implemented to facilitate digital cross-border trade, as follows:

• Electronic Transactions Act: This act provides a legal framework for electronic transactions, including the recognition of electronic contracts and signatures, which are crucial for digital trade.
• Data Protection and Privacy Regulations: These regulations ensure that personal data is handled securely, which is vital for building trust in digital transactions.
• Cybercrimes Act: This act addresses issues related to cybercrime, providing a safer environment for digital businesses.
• e-Government Act: This act promotes the use of information and communication technologies in government services, indirectly supporting digital trade by improving the efficiency and transparency of government processes.

9.2 What specific challenges or concerns does digital cross-border trade present in your jurisdiction that digital businesses should bear in mind?

Digital businesses in Tanzania should be aware of several challenges and concerns, as follows:

• Data privacy and security: Ensuring the protection of personal data and securing digital transactions against cyber threats is a significant concern.
• Regulatory compliance: Navigating the complex landscape of international regulations and ensuring compliance with various data protection laws can be challenging.
• Digital infrastructure: Gaps in digital infrastructure, such as inconsistent internet connectivity and limited access to advanced technologies, can hinder the growth of digital trade.
• Cybersecurity threats: The increasing sophistication of cyberattacks poses a constant threat to digital businesses.

10 Brand protection

10.1 How are brands protected in your jurisdiction? Are there any specific challenges or considerations for digital businesses to bear in mind?

In Tanzania, brand protection is primarily governed by the Trade and Service Marks Act, 1986. This act provides a comprehensive framework for the registration and protection of trademarks. The act allows for the registration of trademarks, granting the owner the exclusive rights to use the trademark. This exclusivity includes the right to take legal action against any infringers. The act also extends protection to well-known marks, regardless of whether they are registered in Tanzania. However, these marks must meet the criteria for being recognised as well known within the country.

Digital businesses in Tanzania should be mindful of several challenges and considerations related to brand protection, as follows:

• Enforcement of rights: While the legal framework provides robust protection, enforcing these rights can be challenging, especially in the digital realm where infringement can occur across borders.
• Cybersecurity: Protecting trademarks in the digital space requires robust cybersecurity measures to prevent unauthorised use and counterfeiting.
• Regulatory compliance: Digital businesses must ensure compliance with both local and international trademark laws, which can be complex and vary significantly between jurisdictions.
• Consumer trust: Building and maintaining consumer trust is crucial. Ensuring that trademarks are well protected and consistently used helps in establishing a reliable brand image.
• Awareness and education: Digital businesses should stay informed about the latest developments in trademark law and best practices for brand protection to effectively safeguard their intellectual property.

11 Innovation

11.1 How is innovation in the digital business space protected in your jurisdiction? What key issues should digital businesses bear in mind in this regard?

The Patents (Registration) Act (Chapter 217) together with the Copyright and Neighbouring Rights Act (Chapter 218) are the laws that protect innovations in Tanzania. The digital business realm is highly characterised by new technological improvements, in both adoption and formulation.

The Patents (Registration) Act:

• specifies:
• • what inventions are patentable; and
  • what does not qualify as a patentable invention; and
• sets out the procedure for patent application, whereby once a patent is granted, the holder is granted exclusive rights to the invention which enable it to prevent others from exploiting the patented invention without its permission.

In relation to digital businesses, the Copyright and Neighbouring Rights Act provides protection for software and databases, including domain names – all of which are important and invaluable requirements to the operations and growth of digital businesses. Software, for instance, is the backbone of digital business platforms such as e-commerce platforms and mobile money payment systems.

Digital businesses must ensure that their intellectual property is safeguarded by applying for protection under the abovementioned acts.

12 Competition

12.1 Does the applicable competition regime in your jurisdiction have specific implications for digital business?

In Tanzania, the competition regime is governed by the Fair Competition Act, 2003. For digital businesses, there are several specific implications to consider:

• Market dominance and abuse: The act prohibits the abuse of market dominance, which can be particularly relevant for digital businesses that may quickly gain significant market share. Practices such as predatory pricing, exclusive dealing and refusal to supply can be scrutinised under this law.
• Merger control: Digital businesses involved in mergers and acquisitions must comply with the merger control provisions of the act. This includes notifying the Fair Competition Commission (FCC) of any mergers that meet the specified thresholds to ensure that they do not substantially lessen competition.
• Anti-competitive agreements: The act prohibits agreements that prevent, restrict or distort competition. These include price-fixing, market-sharing and bid-rigging agreements.
• Consumer protection: The act also includes provisions to protect consumers from unfair trade practices, which is crucial for digital businesses that rely on consumer trust. These include:
• • misleading advertising;
  • unfair contract terms; and
  • other deceptive practices.

Specific challenges and considerations for digital businesses include the following:

• Regulatory compliance: Navigating the complex landscape of competition laws can be challenging, especially for digital businesses operating across multiple jurisdictions.
• Rapid market changes: The fast-paced nature of the digital economy means that competition authorities must continuously adapt their approaches to address new business models and technologies.
• Data privacy and security: Ensuring compliance with data protection regulations while maintaining competitive practices can be a delicate balance for digital businesses.
• Innovation versus regulation: Striking a balance between fostering innovation and barring anti-competitive practices is crucial in ensuring digital businesses thrive while also maintaining healthy competition,

13 Employment

13.1 Does the applicable employment regime in your jurisdiction have specific implications for digital business?

In Tanzania, the employment regime presents unique challenges and requirements for digital businesses. Key points to consider include the following:

• Navigating local employment laws: Digital businesses must comply with Tanzanian employment laws, which can be intricate, particularly when managing remote workers or cross-border operations.
• Wage and hour compliance: Employers must follow the Employment and Labour Relations Act, 2004, which sets out regulations governing:
• • minimum wage;
  • overtime; and
  • working hours.
• Ensuring occupational health and safety: Under the Occupational Health and Safety Act, 2003, employers are responsible for maintaining a safe work environment, including remote workspaces. This involves:
• • addressing ergonomic issues; and
  • ensuring that safety standards are met.
• Data security and privacy: The Data Protection Act, 2022 requires employers to safeguard personal data collected from employees. This includes:
• • implementing strong cybersecurity measures; and
  • adhering to data protection regulations.
• Social protection and employment relations: The rise of digital work has introduced new forms of employment, such as gig and platform work, which often lack the same regulatory oversight and social protection as traditional jobs. This creates challenges for social protection systems based on formal employment.
• Legal implications of new work forms: Digital businesses must be aware of the legal implications of hiring gig workers or freelancers, as these employment forms may not be fully covered under traditional employment laws.

13.2 What rules and restrictions apply to remote working in your jurisdiction?

The Tanzanian laws do not have specific laws that apply to remote working, which instead is mostly governed by individual company policies. Companies and their employees can come up with various inclusions which address different aspects of remote work, depending on the nature of their business. The policies must also ensure fundamentals such as:

• confidentiality and data protection; and
• the monitoring of workers' performance as they undertake working from home.

Employers have since integrated these provisions into employee contracts and tailored them accordingly. The Law of Contract Act (RE 2019) is the main guiding act on this issue. However, such contracts must also be aligned with other relevant laws, such as the Employment and Labour Relations Act, 2004. For instance, despite workers working from home, employers must also ensure adherence to occupational health and social welfare of workers (eg, maternity benefits).

Since there are no legal frameworks to fall back onto, these contracts outline in detail the important aspects surrounding remote working, inclusive of the rights and responsibilities of employees.

13.3 How can digital business attract specialist talent from overseas where necessary?

Attracting specialist talent from overseas is essential for digital businesses in Tanzania. Specialist talent can be attracted in the following ways:

• Competitive compensation and benefits: Offer attractive compensation packages that align with global standards. These should include:
• • competitive salaries;
  • health insurance;
  • retirement plans; and
  • bonuses.
• Relocation assistance: Provide comprehensive relocation packages to ease the transition for international hires. These should include:
• • moving expenses;
  • temporary housing; and
  • assistance with finding permanent accommodation.
• Supportive work environment: Foster an inclusive and welcoming workplace culture. Offering language classes and cultural training can help international employees to integrate more smoothly.
• Remote work opportunities: Leverage the flexibility of remote work to attract talent who may prefer to work from their home countries or other locations.
• Streamlined visa and immigration processes: Collaborate with immigration experts to simplify the visa application process for potential hires. Providing legal assistance can make your company more attractive to international talent.
• Career development opportunities: Highlight the potential for career growth within your company. Offering training programmes, mentorship and clear career progression paths can attract ambitious professionals.
• Utilise global talent platforms: Use international job boards, recruitment agencies and professional networks to reach a wider pool of candidates. Platforms such as LinkedIn, Indeed and specialised tech job boards can be particularly effective.

By implementing these strategies, digital businesses in Tanzania can effectively attract and retain specialist talent from overseas, ensuring that they remain competitive in the global market.

14 Environmental, social and governance (ESG)

14.1 What specific challenges or concerns does digital business present from an environmental perspective? What key considerations should be borne in mind in this regard?

Digital businesses face several environmental challenges:

• Energy consumption: The rapid growth of data centres and digital devices has led to increased energy consumption. Data centres, in particular, require significant amounts of electricity to operate and cool.
• E-waste: The frequent upgrading of digital devices contributes to e-waste. Proper disposal and recycling of these devices are critical to minimise environmental impact.
• Resource depletion: The production of digital devices often involves the extraction of rare metals and minerals, which can lead to resource depletion and environmental degradation.
• Carbon footprint: The overall carbon footprint of digital businesses can be substantial, especially when considering the entire lifecycle of digital products, from manufacturing to disposal.

Key considerations include the following:

• Adopt renewable energy: Utilise renewable energy sources to power data centres and offices.
• Implement e-waste management: Develop and follow e-waste management protocols to ensure proper disposal and recycling.
• Sustainable sourcing: Source materials responsibly and consider the environmental impact of supply chains.
• Energy efficiency: Invest in energy-efficient technologies and practices to reduce overall energy consumption.

14.2 What specific challenges or concerns does digital business present from a social perspective? What key considerations should be borne in mind in this regard?

Digital businesses present several social challenges:

• Job displacement: Automation and digital transformation can lead to job displacement, particularly in industries that rely heavily on manual labour.
• Digital divide: There is a risk of exacerbating the digital divide, where certain populations may lack access to digital technologies and the Internet.
• Privacy concerns: The collection and use of personal data by digital businesses raise significant privacy concerns. Ensuring data protection and privacy is crucial.
• Ethical use of technology: The ethical implications of using technologies such as artificial intelligence and big data analytics should be carefully considered to avoid misuse.

Key considerations include the following:

• Reskilling and upskilling: Invest in training programmes to help workers adapt to new digital roles.
• Promote digital inclusion: Implement initiatives to bridge the digital divide and ensure equitable access to technology.
• Data privacy and security: Establish robust data privacy and security measures to protect personal information.
• Ethical guidelines: Develop and adhere to ethical guidelines for the use of emerging technologies.

These considerations are essential for digital businesses to address the environmental and social challenges they face, ensuring sustainable and responsible growth.

14.3 What specific challenges or concerns does digital business prevent from a governance perspective? What key considerations should be borne in mind in this regard?

Digital businesses face several governance challenges and concerns that need careful consideration:

• Data privacy and security: Protecting customer data from breaches and unauthorised access is a major concern. Digital businesses must comply with data protection regulations and implement robust cybersecurity measures.
• Regulatory compliance: Navigating the complex landscape of regulations – including those related to taxation, anti-money laundering and consumer protection – can be challenging. Non-compliance can lead to legal penalties and reputational damage.
• IP protection: Ensuring that digital products and services are protected from infringement is crucial. This includes:
• • securing patents, trademarks and copyrights; and
  • addressing issues related to digital piracy.

Key considerations include the following:

• Robust governance framework: Establish a comprehensive governance framework that includes policies, procedures and controls to address the unique challenges of digital businesses.
• Compliance programmes: Develop and implement compliance programmes to ensure adherence to relevant laws and regulations. Regular audits and assessments can help to identify and mitigate compliance risks.
• Cybersecurity measures: Invest in advanced cybersecurity technologies and practices to protect against data breaches and cyber threats. Regularly update security protocols and conduct employee training.
• Ethical guidelines: Develop ethical guidelines for the use of technology and data. Ensure that business practices align with societal values and contribute positively to the community.

15 Trends and predictions

15.1 How would you describe the current landscape for digital business and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

The digital business landscape in Tanzania is rapidly evolving, driven by increasing internet penetration and mobile usage. Key trends and anticipated developments include the following:

• Digital payments: The adoption of digital payment systems is expanding, with online payment systems playing a crucial role in financial inclusion and digital transactions.
• E-commerce growth: The e-commerce sector is experiencing substantial growth, driven by increased internet access and a growing middle class. Online marketplaces and digital platforms are becoming more popular.
• Government support: The Tanzanian government is actively promoting digital transformation through strategic policies and infrastructure development. The 2024/25 fiscal Finance Act reflects a forward-thinking approach, positioning Tanzania as a regional leader in digital innovation.

Anticipated developments in the next 12 months include the following:

• Legislative reforms: There are ongoing discussions about updating digital business regulations to enhance:
• • data protection;
  • cybersecurity; and
  • consumer rights.
• These reforms aim to create a more secure and trustworthy digital environment.
• Infrastructure investments: Continued investments in digital infrastructure – including expanding broadband access and improving mobile network coverage – are expected. These efforts will further support the growth of digital businesses.
• Innovation hubs: The establishment of innovation hubs and tech incubators is anticipated to foster entrepreneurship and support startups in the digital sector.
• Digital skills development: Initiatives to enhance digital literacy and skills among the workforce are likely to be prioritised. This will help to bridge the skills gap and support the growth of the digital economy.

16 Tips and traps

16.1 What are your top tips for digital businesses in your jurisdiction and what potential sticking points would you highlight?

• Understand the privacy laws: Ensure that your business complies with the laws on the collection and processing of data as required by the Data Commission and the Data Protection Act, to protect user data and avoid legal issues.
• Engage legal counsel: Having knowledgeable legal advisers is crucial. They can help you to understand and comply with various digital business laws, including the Electronic and Postal Communication Act and other relevant regulations.
• Obtain relevant licences: Ensure that you have the necessary licences to operate. This includes:
• • registering your business name with the Business Registration and Licensing Agency; and
  • obtaining any specific licences required for your industry.
• Stay updated on regulatory changes: The digital landscape is constantly evolving. Regularly review updates from regulatory bodies such as the Tanzania Communication Regulatory Authority to stay compliant with new laws and regulations.
• Implement secure payment options: Ensure that your payment systems are secure and comply with local regulations. This builds trust with your customers and protects your business from fraud.
• Focus on customer experience: Providing exceptional customer service and adapting to local preferences can help to build long-term relationships and customer loyalty.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.