Q&A – 11 June 2012
Suing daladala driver
Can I sue a driver of a daladala who causes an accident on salender bridge and because of his negligence thousands of people are blocked in traffic and get late to work which costs the country billions of shillings worth of time. If I was the President of Tanzania I would allow such a claim against the daladala driver and his owner. Does our law allow that?
FE, Dar
Under the rule of negligence and law of tort, there are a few questions you must ask yourself. Does the daladala driver owe you a duty of care? If he does, then the next question is was he in breach of that duty? If he was in breach, and it caused you damages, then you can recover from him.
When the daladala driver causes an accident, he does not do so intentionally. It is an accident just like any other accident. He does owe a duty to the person he has hit, but does that duty extend to you who has not suffered any physical damage? The answer is in the negative. Generally in the law of tort, you can only extend him having a duty to you if you were injured. You can claim that it was an economic injury to you but such economic loss is far too remote and it would lead to absurdity and opening of the floodgates. If Judges accepted such cases, the poor daladala driver would have to compensate billions of shillings to all those affected; both public policy and fairness principles would be defied if that were the case.
In the upshot and very unfortunately so, you have no claim against the daladala driver. We are not aware of any jurisdictions that would allow your suggestion. When you become President, you might want to consider enacting a special law on this; however at present the law does not support your thoughts.
Tax avoidance versus tax evasion
I was in an asset purchase transaction and planned the taxation in a manner that I would not be liable to pay VAT. TRA has come down saying I evaded taxes, However my approach utilized a provision in the VAT Act. Is that really evasion even if it means that the provision works in my favour?
OK, Dar
Your issue relates to a widely debated subject that of tax avoidance versus tax evasion. The issue related to that of tax avoidance and tax evasion is common in every tax jurisdiction. While this practice cannot be eliminated, it can only be minimized.
What you have done is found a loophole in the tax law and have taken advantage of it to reduce or eliminate your taxation on the asset purchase.
Tax avoidance is an arrangement whereby the taxpayer offers very less or no income to tax and without contravention of the tax laws. Tax avoidance takes advantage of any loopholes and weaknesses, deficiencies and loose or vague clauses in the tax legislations to minimize or eliminate tax liability. Tax avoidance is not punishable in law and is permissible in almost all tax jurisdictions. However where a transaction is sham and not genuine, it cannot be considered to be a part of tax planning or legitimate avoidance of tax liability.
On the other hand tax evasion involves a taxpayer’s deliberate contravention of the tax law in order to minimize or eliminate tax liability altogether. Tax evasion is the application of fraudulent practices in order to minimize or eliminate tax liability.
In your instance it may be an issue of interpretation, for which TRA can clarify its position. If you are unhappy with TRA’s decision, you can appeal to the Tax Revenue Appeals Board.
Lastly we must state that one has to be very careful while planning their taxes as there is a very thin line between tax avoidance and tax evasion.
Keeping drivers records
I own two taxis in the city of Dar es Salaam and employ two drivers. Last month one of my drivers was involved in an accident and ran away and is still at large to this date. Strangely, police officers came to me and requested written records of the name and driving license number of the driver who ran away. I do not have such records although I know only know his name. The police informed me that it is an offence not to keep such written records. I feel this is more of a labour issue than a traffic offence. How can I stop this harassment?
RT, Dar
An employer should not only keep his/her employee’s records for the purpose of compliance with the laws only but the records may save a number of other useful purposes. For instance, what if the employee steals from you and you have no records to assist in tracing him or her?
Principally, although for different goals, both the Road Traffic Act and the Employment and Labour Relations Act, require the employers to keep records of their employees.
In your case, reference is drawn to the provisions of Section 79 of the Road Traffic Act which makes it mandatory for an employer of a driver of a motor vehicle or trailer to keep written record of that driver’s name and his driving license number. It is obvious that you did not do this.
Section 113 states that any person who contravenes or fails to comply with provisions of the Road Traffic Act is guilty of an offence punishable through a fine or imprisonment. This means that when Section 79 is read together with Section 113 of the Road Traffic Act, you will be found guilty to have committed an offence and may be fined or imprisoned.
The police are right in what they are telling you and we don’t see it as harassment. On a different note, we advise you to start keeping records of you drivers to ensure compliance of the law as well as for your own good in running your business. Keeping employees records is not just a matter of law but it reflects high standards of management in a business. Keeping your drivers records doesn’t only apply to you as a taxi driver owner- it applies to everyone who employs a driver.
As for the current issue, we suggest you consult your lawyers