Compliance with foreign currency use regulations

I have been employed since December 2024 in Tanga and get paid in foreign currency. I have heard that from April 2026 I must be paid in Tanzania Shillings (TZS), however my contract is in foreign currency. Can I still be paid in foreign currency because of my contract which came before the regulations?
MA, Tanga

What a timely question! Unfortunately, the answer is no. All employees, unless there is an exemption in place, must be paid in TZS from April 2026. The contract cannot override the Regulations. Under the Regulations, no one is allowed to conclude a contract for provision of goods or services in Tanzania in foreign currency save only where the contract is on payments that are allowed under regulation 4, which you do not fall under.

Specifically, the Regulations require all contracts providing payment for employment services in Tanzania should be in TZS except those allowed by the Regulations. In short, you will have to be paid in TZS, then purchase foreign currency, if you so wish. Your lawyer can guide you further.

One-third deposit too high, waiver decision too late

I was recently assessed by the Tanzania Revenue Authority (TRA) for a tax liability of TZS 1.8 billion, which meant I was required to pay one-third of that amount approximately TZS 600 million in order to validate my intended objection against the assessment. The amount was simply too high, so I applied for a waiver in accordance with the law to allow me to move forward. However, TRA took a very long time to respond to my waiver application. By the time they finally replied, the timelines for me to proceed with my objection had already lapsed. I now feel completely stuck, as I could not proceed without the waiver and the delay was not my fault. Can I challenge this kind of inaction before the Board?

CK, Dar es Salaam

This is a very practical concern, and one that has recently been clarified by the Court of Appeal. For a long time, there has been uncertainty around whether matters relating to waiver, particularly rejections and delays in determining such applications could be challenged before the Tax Revenue Appeals Board (the Board). The Court of Appeal has now addressed this issue and provided much-needed clarity. Under the provisions of the Tax Administration Act (TAA), a taxpayer is not limited to challenging only objection decisions, but may also challenge other decisions or omissions of the Commissioner General. Reading these provisions of the TAA together with those of the Tax Revenue Appeals Act reveals that the Board’s jurisdiction extends to disputes arising from both action and inaction in the administration of tax laws. This position becomes even clearer when one considers the Tax Administration (General) Regulations. Regulation 95 expressly provides for the making of an application for waiver of payment, while Regulation 96 contemplates that such an application must be determined within a prescribed timeframe. These provisions underscore that a waiver application is not meant to exist in a vacuum. There is a corresponding duty on the TRA to act on it timeously.

The Court of Appeal has recently affirmed that where the TRA fails to act within such a framework, that failure may amount to an omission capable of being challenged. The Court was clear that taxpayers should not be left in limbo, particularly where the delay directly affects their ability to exercise statutory rights, such as proceeding with an objection. This decision provides a timely and practical guidance to the long awaited and much-needed clarification.

In your case, where the delay in determining the waiver application effectively prevented you from proceeding within time, there is a strong basis to challenge that inaction before the Board. However, each case is always decided depending on the circumstances surrounding it. We therefore advise you to consult your tax lawyer for more guidance having studied all the circumstances and correspondences, if any, between you and TRA.

Property sold at below market by bank

I borrowed money from a bank and secured the loan with my house. Due to financial difficulties, I failed to repay the loan on time and the bank decided to auction my house. The house was sold at a very low price compared to its actual value. I have also been informed that no recent valuation was conducted before the sale. The buyer is now claiming that he is a bona fide purchaser and that the sale cannot be challenged. Can I challenge the auction and have it set aside?

WR, Arusha

The law governing mortgages imposes a duty of care on a mortgagee (such as a bank) exercising its statutory power of sale to obtain the best price reasonably obtainable at the time of sale. This means that the bank must ensure that the mortgaged property is not sold at an undervalue. The Court of Appeal of Tanzania has reaffirmed that where a property is sold at a price which is 25% or more below its market value, there ensues a presumption that the mortgagee has breached its statutory duty of care. To comply with this duty, the mortgagee must conduct a fresh valuation of the property prior to sale by a qualified valuer and be approved by the Chief Valuer. The burden of proving that such valuation was conducted lies with the mortgagee.

In your case, if no valuation was conducted, or if the bank cannot produce evidence of such valuation, the sale may be declared unlawful. Additionally, if the property was sold at a price significantly below its market value, specifically if the sale price was 25% or more below the market value, the Court is likely to find that the bank breached its duty of care. Regarding the purchaser’s claim as a bona fide purchaser, the law offers protection only where the sale is lawful. Should it be tainted with illegality, including non-compliance with statutory requirements such as proper valuation, such protection is not available. A purchaser cannot obtain a valid title from an unlawful auction. Therefore, you can institute proceedings in Court to challenge the auction. If the Court is satisfied that the statutory requirements were not complied with, it may declare the auction unlawful and set it aside, notwithstanding the purchaser’s claim of being a bona fide purchaser. Considering the intricacies involved you should consult your lawyer.