Q&A – 6 March 2017
Insurance company filing inflated statements
I know for sure that a certain insurance company is hiding losses in its financial statements. How can the Tanzania Revenue Authority let go of such a company? Are insurance companies not regulated in Tanzania? Who can I report this to?
PR, Dar
If the company is hiding losses, that means it is inflating its statements and likely not evading but paying taxes, which the TRA would likely be happier with. What the company is likely trying to do is not show its dire financial position to its regulator, the Tanzania Insurance Regulatory Authority (TIRA), who can proceed sanction such a poorly performing insurer.
Section 157 of the Insurance Act makes false reporting a serious offence, and states that (1) a person who shall in any statement, return, report, certificate, balance sheet or other document required by or for the purposes of this Act, willfully makes a statement which is false in any material particular commits an offence. Subsection 4 of the same section makes this offence imprisonable for a minimum term of 2 years, or a fine of TZS 5,000,000 or both.
Should you wish to report the insurer, you must inform TIRA and provide the relevant details.
Woman forced to disclose age
I am a beautiful woman and was approached to become a director in a company, which I accepted and got paid for. When the appointment forms were brought, the secretary asked me for my age and I inserted adult. I told the secretary that women never disclose their age to people and this would be a violation of my rights as a woman. The secretary said he would try convince BRELA who have come back and refused. What should I do? Can I sue BRELA?
UU, Dar
Whether you are a beautiful woman or not, or a handsome man, the law requires you, upon being appointed as a director, to disclose your age. You cannot write adult in the appointment form. Further, we do not see a so called violation of your rights as a woman by disclosing your age. Section 195 of the Companies Act states that (1) Any person who is appointed or to his knowledge proposed to be appointed director of a company subject to section 194 at a time before he has attained the age of twenty-one or after he attained any retiring age applicable to him as director either under this Act or under the company’s articles shall give notice of his age to the company.
Subsection 2 states that any person who (a) fails to give notice of his age as required by this section; or (b) acts as director under any appointment which is invalid or has terminated by reason of his age shall be liable to a default fine You thus have two options. First option is for you to dislose your age. Second option is for you not to proceed as a director of the company since you are not able to fulfil one of the requirements under the Companies Act.
You will likely then have to refund the funds that were advanced to you to act as a director. As for suing BRELA, we see no cause of action against BRELA.
The Companies Act dictates what can and cannot be done.
Test wedding
I wish to get married but am scared after all the stories I here about how women change during the marriage. I want to sign the contract of marriage but for only two years, after which I am ready to extend the marriage contract for a further 5 years, and so on. Can I do this as I think there are higher chances my marriage will work better this way. Please guide.
UD, Morogoro
You write about the marriage contract as if it is a lease agreement. It is not. Your soon to be wife is not a property that can be traded like a lease.
Section 12 of the Law of Marriage Act that deals with the duration of marriage states clearly that a marriage, whether contracted in Mainland Tanzania or elsewhere, shall for all purposes of the law of Mainland Tanzania subsist until terminated (a) by the death of either party thereto; (b) by a decree declaring that the death of either party thereto is presumed; (c) by a decree of annulment; (d) by a decree of divorce; or (e) by an extra-judicial divorce outside Tanzania which is recognised in Tanzania under the provisions of section 92.
In short, you either get married and are bound to your wife for life, subject to death or a divorce, or you look for other alternatives. You cannot have this both ways.
Primary mining licence acquisition
We are foreigners and have acquired Primary Mining Licences (PMLs). We intend to develop the area and then apply for a mining licence. Although we managed to get the transfers done, we have learnt that the PMLs cannot be owned by non Tanzanian entities. Is there a way we can cure this?
GH, Dar
Unfortunately you cannot cure this as the Mining Act 2010, which governs PMLs, is very strict. Section 8(2) states that a primary mining licence for any minerals shall not be granted to an individual, partnership or body corporate unless- (a) in the case of an individual, the individual is a citizen of Tanzania; (b) in the case of a partnership, it is composed exclusively of citizens of Tanzania; (c) in the case of a body corporate, it is a company and- (i) its membership is composed exclusively of citizens of Tanzania; (ii) its directors are all citizens of Tanzania; (iii) control over the company, both direct and indirect, is exercised, from within Tanzania by persons all of whom are citizens of Tanzania.
We believe that the Ministry has allowed this transfer in error meaning that you do not legally hold the PMLs. It is advisable that you get a Tanzanian entity to hold these PMLs for you whilst you apply for a ML.
Your lawyer should be able to guide you further.