Legal Digest – November 2015

Magufuli wins election, Zanzibar elections suspended

Tanzanians voted in presidential and general elections on 25 October 2015 in what was expected to be a tight race between the presidential candidate John Magufuli (CCM) and Edward Lowassa (CHADEMA). According to the National Electoral Commission (NEC) the total registered voters were 23,161,440 while those who casted their vote were 15,589,639. Out of the casted votes, valid votes were 15,193,862 and rejected votes were 402,248.

The NEC completed releasing the presidential and parliamentary results on 29 October 2015 and the chairman of NEC, Judge (rtd) Damian Lubuva announced Tanzania’s fifth president elect, John Magufuli (CCM) and Vice President elect Mrs. Samia Suluhu Hassan (CCM) having beaten their nearest rival (CHADEMA) by over 2.8 million votes.

According to the NEC, Mr. Magufuli (CCM) got 8,882,935 Votes (58.46 %) while Mr. Lowassa (CHADEMA) got 6,072,848 Votes (39.97 %) and other parties followed with less than 1% of the total votes. President-elect Mr. Magufuli is expected to take his oath of office on 5 November 2015 at Uhuru Stadium in Dar es Salaam.

On 28 October 2015, the Zanzibar Electoral Commission (ZEC) annulled elections citing “violations of electoral law”. ZEC chairman Jecha Salim Jecha said the polls were “nullified” and must be carried out again. Pressure has mounted on ZEC to reverse their decision on polls.

Possession of government trophies economic offence- Court of Appeal

In a unanimous ruling of the Court of Appeal, Justices of Appeal Engela Kileo, Ibrahim Juma and Augustine Mwarija ruled that the possession of government trophies is an economic offence under the Economic and Organised Crimes Act of Tanzania.

The matter was appealed by the Director of Public Prosecution who was aggrieved by the decision of the High Court directing the accused to apply for bail at the Resident Magistrates Court since the offence that the accused were charged with was not an economic crime. The accused had applied for bail from the Resident Magistrates Court which had ruled that it did not have jurisdiction  to hear bail applications for such offences.

Institute of Chartered Secretaries and Administrators (ICSA) launch Tanzania branch

ICSA, the chartered membership and qualifying body for professionals working in governance, risk and compliance, including company secretaries, has launched a branch in Tanzania on 26 October 2015. The establishment of the ICSA branch will help the development of good governance and train our professionals to promote sustainability and economic growth.

The Chief Executive of ICSA, Mr. Simon Osborne welcomed the addition of Tanzania branch to the other branches in the region. He further reiterated that “ICSA seeks to encourage the adoption globally of good governance practices as ultimately good governance helps economies grow. Chartered secretaries play a vital role in this by ensuring that companies and other organisations implement good governance practices, act responsibly and operate with integrity. The launch of a branch in Tanzania highlights our belief that East Africa has great potential as a region that can achieve long-term, sustainable growth.”

Reduced lawsuits due to increased efficiency

Tanzania Revenue Authority has indicated that the introduction of online payment system has significantly decreased lawsuits of fraud and corruption. The online system has helped to accelerate the pace at which tax is paid since tax payers can simply pay their levies from their offices or homes using internet connected devices and allows submitting the tax returns online.

Arusha hosting 2nd African Judicial Dialogue

A three-day African Judicial Dialogue is expected to be held in Arusha from 4-6 November 2015. The Dialogue shall bring together over 200 delegates, including but not limited to African Chief Justices, Presidents of Supreme Courts and Constitutional Courts, academia and national judiciaries.

According to a press release issued by the African Court, the dialogue is jointly organized by the African Court on Human and Peoples’ Rights and the African Union. The three-day Dialogue shall assist to enhance judicial administration and ensure quality justice for Africans across the continent.

Businessman charged under Cyber Crimes Act, 2015

A businessman was charged at Kisutu Resident Magistrates’ Court with five counts of publishing false information. According to the prosecution, the accused who has been charged under the new Cyber Crimes Act used social media networks for posting false information through Facebook with the intent to mislead and threaten the public during the election period.

Lawyers appeal for amendment of Marriage Act, 1971

What has been criticized for the last two decades on the law of Marriage Act of Tanzania, which continues to deprive children of their basic rights, was stated yet again by human rights lawyers when marking the African Human Rights Day. The lawyers correctly stated that the Law of Marriage Act of 1971 was in direct collision with the Law of the Child Act of 2009. The present marriage law allows, amongst others, girls to be married at a young age depriving them of education.

Lawyers have accused the Ministry of Community development, gender and children of not doing anything for the past twenty years. It is to be seen if the new Minister for Women and Children will be able to quickly, at least, amend some sections of the present law of Marriage Act before totally overhauling it.

Uchumi supermarket closure

Tight market conditions have forced the closure of Uchumi Supermarket in Tanzania. The management have stated that the company is set for liquidation so that all their obligations are settled. Uchumi supermarket is a successful brand in neighbouring Kenya but has failed in Uganda and Tanzania.

Court of Appeal calendar 2016 released

The Court of Appeal has issued its 2016 Court session calendar with Court sessions beginning 4 February 2016.


Around the World

Modern Slavery Act, 2015
On 28 October 2015, the UK Government published the Modern Slavery Act 2015 (Transparency in Supply Chains) Regulations 2015 and the Modern Slavery Act 2015 (Commencement No 3 and Transitional Provision) Regulations 2015. The combined effect of these two regulations is to implement s54 of the Modern Slavery Act 2015 from 29 October 2015 and is relevant to all corporates.

Under Section 54 of the Act, a commercial organization must prepare a slavery and human trafficking statement for each financial year of the organization. The Modern Slavery Act 2015 (Transparency in Supply Chains) Regulations 2015, sets the amount of total turnover at £36 million. It also provides that total turnover will be determined by taking into account the global turnover of the organization and its subsidiary undertakings.

India sets up tax simplification panel
The Government of India has recently announced that it has constituted a committee tasked with recommending ways to reduce disputes between corporate taxpayers and the tax authority and improve the overall tax framework. The ten-member committee is chaired by former Delhi High Court judge R.V. Easwar and includes experts from the legal, tax, and finance professions. Under its terms of reference, the committee is charged with identifying provisions and phrases in the Income Tax Act 1961 that are leading to litigation due to differing interpretations. It will also propose changes aimed at simplifying tax compliance and bringing about more legal certainty, but without “substantially” impacting on the tax base or tax revenue.

Singapore tops World Bank’s doing business report
Singapore has once again been ranked by the World Bank as the number one jurisdiction in the world in terms of ease of doing business. New Zealand, Denmark, South Korea, and Hong Kong were the next best jurisdictions for doing business, according to the World Bank’s Doing Business 2016 report. The report ranked Singapore in fifth place in terms of how easy it is for a business to comply with taxes. Businesses in Singapore have to make six tax payments per year, it said. On average it takes a business in Singapore 83.5 hours per year to fulfil its tax obligations, and the total tax rate is 18.4 percent of profits. Of the five highest ranking jurisdictions on the ease of doing business table, Hong Kong has the most efficient business tax regime, according to the report. Businesses located in Hong Kong take 74 hours and three payments per year to comply with taxes, and the total tax rate is 22.8 percent of profits.

Serious Fraud Office investigating ‘money-laundering’ related to FIFA
The Serious Fraud Office is looking into potential money-laundering offences in the UK related to FIFA corruption. David Green, the director of the SFO, said that although the Bribery Act had been introduced too late to catch any offences committed during bidding for the 2018 and 2022 World Cups, it is actively reviewing recent information related to possible money-laundering.

California woman burned by exploding e-cigarette charger awarded nearly $2m
A California woman badly burned by an exploding electronic cigarette charger was awarded nearly $2m by a jury in a product liability suit. Jennifer Ries of Corona was on her way to the airport in March 2013 when she plugged in her VapCigs e-cigarette charger and it spewed hot metal that ignited her dress. She was scarred for life by second-degree burns, according to the lawsuit.

Namibia to Introduce Solidarity Tax
Namibia’s President, Hage Geingob, has announced that a “solidarity tax” is to be introduced to further the Government’s anti-poverty policy. The new tax will be payable in the 2016/17 fiscal year by both individuals and companies with income above a certain threshold. The additional revenue is intended to contribute to a welfare fund. Details of the tax will be released later. It is not known if it will be structured as a surtax on income that is, levied in addition to the current income tax rates or whether it will take some other form of Tax.