Incomplete tax audit, assessment issued

We are a company based in Mwanza and have been recently audited by TRA on various taxes covering years of income 2016 up to 2020. After TRA issued the initial audit findings we responded to the findings and scheduled various meetings with the TRA to further clarify our responses. Unfortunately, TRA kept on postponing the meetings and ultimately the meeting has never been held at all. Last week we received assessments covering the years audited. We are unsure whether TRA are allowed to audit us for a period beyond five years ago. We would also like to know if TRA were justified to issue assessments without any meeting with us.
TT, Mwanza

Under the Tax Administration Act, R.E. 2019 (the TAA) TRA have been granted with very wide powers including powers to conduct investigation, tax audits, cease property, entering premises, etc. when administering revenue laws in Tanzania.

According to section 48 of the TAA, the Commissioner General has powers to adjust an assessment in the case of fraud, wilful neglect or serious omission by or on behalf of the taxpayer. This gives the TRA massive powers to go beyond 5 years.

Further, in the conduct of tax audits, TRA are mandatorily obliged to hold an exit meeting with the audited person. According to regulation 21(4)(a) of the Tax Administration (General) Regulation, 2016, an exit meeting with the taxpayer audited is supposed to be held upon the taxpayer filing his response to the initial audit findings. After this meeting, the law requires the TRA to issue the final audit report which may be followed by assessments if any tax liability is established by the said report.

In your case, we see that two procedural steps were skipped, namely holding an exit meeting and issuance of the final audit report prior to issuance of the assessments. This omission by the TRA may be interpreted to mean denial of the right to a fair hearing during the audit, a fact which may vitiate the validity of the assessments. This could be one of the grounds of objection or appeal.