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Q&A – 19 June 2017

Local content in oil and gas

How does the law protect local Tanzanian companies to benefit from the oil and gas boom in the country? Is there a local content policy in place that will assist Tanzanian companies to grow, otherwise we will always remain brokers and not suppliers.
UP, Mwanza

The Petroleum Act 2015 provides for local content which would have its own regulations. The Government this year has enacted the Petroleum Local Content Regulations 2017 that were gazetted on 5 May 2017. These Regulations govern local content matters related to petroleum upstream, midstream and downstream activities in Tanzania Mainland.

Regulation 15 provides for procurement of works, goods and services from Tanzanian entrepreneurs and states that a contractor, sub contractor, licencee or any other person shall ensure that preference is given to works, goods and services provided, manufactured or locally available in Tanzania in accordance with the provisions of the Act and these Regulations.

This regulation further states that where goods and services required by the contractor, sub contractor of licensee are not available in Tanzania, such works, goods and services shall be provided by a company which has entered into a joint venture with a local company.

This local company shall mandatorily own shares of atleast twenty five per cent in the joint venture. It is further stated under the regulations that a non local company which intends to provide goods, works or services to a licensee and contractor within the country shall, subject to the Authority’s approval, enter into any other business arrangement which will guarantee a local participation of atleast ten percent shares, interest or equity of the contract value for the provisions of the works, goods and services.

The local content have a number of provisions that protect and promote local businessman. We must however state that the technical expertise that some overseas companies have, has taken them decades to develop and there may still be a number of services that local companies may not be able to provide.

For such an eventuality, and fairly so, these Regulations provide for some flexibility in favour of the oil and gas companies. We recommend that you read these regulations.

TRA sent demand notice to wrong address

Tanzania Revenue Authority sent an assessment of taxes to our old post box address. We only recently found out now that they want to execute against us. What is the protocol for service?
OY, Mtwara

Unfortunately you have not told us what type of tax it is but usually the TRA serve you in person as there is a tax officer who visits you. It seems that either your company does not have a physical address and is dormant or the company has had no engagements with TRA over your tax affairs, which by the way is your statutory responsibility. In the absence of a physical address, the TRA would normally use your last known address.

The key here is whether you had informed TRA of your new address and whether or not your BRELA file is updated with the new address. If you have done neither, under section 82 of the Interpretation of Laws Act, what TRA have done is correct. Section 82 states that (1) where a written law authorises or requires a document to be served by post, whether the word “serve” or any of the words “give”, “deliver”, or “send” or any other similar word or expression is used, service shall be deemed to be effected by properly addressing and posting (by prepaid post) the document as a letter to the last-known address and unless the contrary is proved, to have been effected at the time when the letter would have been delivered in the ordinary course of post. (2) Where a written law authorises or requires a document to be served by registered post, whether the word “serve” or any of the words “give”, “deliver”, or “send” or any other similar word or expression is used, then, if similar word or expression is used, then, if the document is eligible and acceptable for transmission as certified mail, the service of the document may be effected either by registered post or by certified mail.

In order for you to challenge the assessment, you will need to apply for extension of time to file an objection. If you have reasonable grounds, the TRA may consider this application.

Knowledge of existence of Will

I have made a Will and want to know whether there is an automatic way for the beneficiaries to be informed that they are beneficiaries after my death. I also wish to know how my executor will know that I have appointed him as my executor. I do not want the contents of my Will to leak out to anyone including my wife and any other beneficiaries. Is there a particular place that I can use to store my Will?
DL, Dar

Neither your beneficiaries nor executor(s) will know that they are mentioned in your Will if you do not inform them. It is as simple as that. There is no authority that informs them automatically. Our first suggestion is for you to make sure that you ask the executor if he is agreeable to act as the executor.

It is wise to also appoint an alternate executor should the first executor fail to act for some reason. Make sure you also inform this alternate executor. Most people forget to appoint an alternate executor. Secondly, you should make sure that the executor and/or the beneficiaries or someone very trustworthy knows where the Will is stored. The facility you use should only release the Will upon your demise. Some people store their Wills at home.

Others store them in bank vaults with instructions to their bankers to release it to particular people upon ones demise. Others use Will storage facilities. We are not aware of specific Will storage facilities in Tanzania but there are many such facilities outside the country.

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