Q&A 19 November 2012

Tax case at Court of Appeal

We have a pending appeal at the Court of Appeal on a tax matter. Tanzania Revenue Authority (TRA) has gone ahead and issued exactly the same assessment as the appeal but for a different year. We have challenged this second decision before the Tax Revenue Appeals Board (“Board”). Is it not redundant for this Board to continue hearing this appeal when we are waiting for a final judgment from the Court of Appeal on exactly the same matter? Can TRA issue an assessment for something that is being challenged?
GH, Dar

We start by answering your second question whether TRA can issue an assessment for a matter whose interpretation is pending before the Court of Appeal. Our reading of the relevant tax statutes is that TRA is not disallowed to issue an assessment even if the matter is at the Court of Appeal. Hence, we do not see anything wrong with that.

As for the Board entertaining this second decision by TRA, please note that there is a decision by the Board exactly on this point where the Board adjourned proceedings sine die before it pending the decision from the Court of Appeal. The Board held in this decision that “we are of the opinion that indeed prudence and common-sense dictates that the hearing of the present appeals be adjourned until such a time when the Court of Appeal of Tanzania will have made a decision in an appeal which is pending before it in which parties therein and the main issue involved are the same as those obtaining in the present appeals. Whichever decision is made therein, it is going to pave way for a proper finalization of the appeals now before this Board.”

Based on the above decision, you can make an application for the matter at the Board to be adjourned pending the appeal.

Fake pistol, now in trouble

My son was about to be arrested for an offence, I panicked and threatened the police with a fake pistol. The police lowered their weapons and surrendered believing that my pistol was real. I was later arrested and we were both taken to the police station. We have now been taken to Court. How do I manage this?
AK, Kigoma

The Arms and Ammunition Act clearly states that if any person makes or attempts to make any use at all of a firearm or imitation firearm with intent to resist or prevent the lawful apprehension or detention of himself or any other person that person shall be guilty of committing an offence and upon conviction liable to imprisonment for six years.

From the said provision of the law, your conduct is an offence and if convicted you will be imprisoned for six years. You should seek legal advice.

Fraudulent pretence of marriage

I had a girlfriend of over four years with whom I parted and we went our separate ways because of huge differences. She then developed a mental condition and I decided to take care of her as her family is not based in Dar. After she recovered, I had developed love for her again and since she had no memory to realize if what I was saying was the truth or not, she stayed on with me when I told her we had been married. We had children and now we have started having problems again. One day after an argument I told her the truth and asked her to leave the house. She reported me to the police and I now have a criminal case against me. How can such a matrimonial issue become a criminal matter. Don’t the police have anything else to do?
PO, Dar

This is a very unique scenario and believe it or not is provided for under the penal code which clearly states that, any person who willfully and by fraud causes any woman who is not lawfully married to him to believe that she is lawfully married to him and to cohabit or have sexual intercourse with him in that belief is guilty of a felony, and is liable to imprisonment for ten years.

We recommend you get yourself legal help as the issue is not as simple as you make it to be.

Refusal by TRA to admit appeal

I have been assessed with an astronomical amount of VAT. In fact that amount is so exorbitant that if I am forced to pay this, it will lead to my company’s insolvency. I filed the usual objection proceedings with the TRA and asked for a waiver against depositing the 1/3 amount of the assessment as a deposit. The TRA have come back strongly refusing the waiver. I don’t have the money to pay- what should I do? How can I be condemned unheard simply because I don’t have the cash flow to pay the deposit to fight my case. Please guide.
IL, Arusha

You have followed the correct procedure by filing objection proceedings with the Commissioner General. It is also provided for under the law that one has to pay 1/3 of the assessed amount or the tax amount that is not in dispute, whichever is higher. In your case you are objecting to the entire assessed amount and hence 1/3 of the assessed amount will apply.

You say that TRA has not accepted your application for waiver. Your next best bet is to file an application before the Tax Revenue Appeals Board for a waiver. Whilst the 1/3 is sparingly granted, and you will realize why from a government collection point of view, this waiver may be obtained from the Board.

Reasons like lack of cash flow, over utilized bank facilities, good previous tax payment record, strength of the appeal, current financial position of the company amongst others can be used by you to get this waiver. You can also plead that the underlying policy of the government is to facilitate and encourage trade not to hinder it. You can argue that if you are forced to pay this exorbitant amount and are forced to shut down, people will lose jobs and TRA will also lose revenues. Your lawyers can guide you further.