Q&A – 12 October 2020

Fraudulent transfer of credit in electronic account

If someone fraudulently transfer credit from my mobile account or my bank account to his or someone else’s account, does that not amount to stealing? I was shockingly told that it doesn’t.
HG, DSM

No, it does not amount to stealing but it is still a criminal offence. Stealing is dishonest taking of someone’s property capable of being stolen. Fraudulent transfer of credit stored in any form of computer system is not theft; it is obtaining credit by false pretence contrary to section 305(a) of the Penal Code. It does not matter that the offender transferred the credit to his/her account or to the account of the third party. This section was amended in 2011 by Act No.3 of 2011 to curb the fraudulent transfers of credit from computer systems. Alternatively, the person can be charged with computer fraud contrary to section 12 of the Cyber Crimes Act, 2015. Either way such a fraudulent transfer is a criminal offence.

Non-renewal of work permit

I am country manager in a foreign company in Tanzania. In January 2016, we signed a 10 year employment contract with three expatriates and obtained two years’ work permits for them. Their work permits were subsequently renewed making an aggregate of their validity to five years. The last renewed employment contracts are expiring in December, 2020. Is there any statutory limit in renewing work permits? In case our application for further renewal is refused by the Labour Commissioner what do we do? And what will be fate of the 10 year employment contracts with the expatriates if they are refused extension of their work permits?
OL, Mwanza

According to section 12(4) of the Non-Citizens (Employment Regulation) Act, 2015 a work permit should be valid for a period of two years but it can be renewed provided the aggregate period of original grant and renewals does not exceed 5 years. Only investors whose investments have great value to the economy of Tanzania or well-being of the Tanzanians can have their expatriates granted work permits or renewals   exceeding 5 years. You can make an application for another renewal to extend the validity of the work permits beyond an aggregate of 5 years if you can prove that the contribution of your company to the economy and well-being of Tanzanians is of great value. Should the application for the renewal be refused, you have the right to appeal to the Minister for Labour whose decision shall be final.

Employment contracts of expatriates is subject to grant and/or renewal of the work permits and residence permits. Where the residence or/and work permits are refused, the contract is deemed to have been automatically terminated. The employer is not bound to give a notice of termination or pay one month’s salary in lieu of notice. All the employer can do is to pay the expatriate his/her other statutory dues like repatriation cost to his country of recruitment, severance pay, leave pay if there is unused leave and payment for any work done before the refusal of the work permit. It is an offence to allow an expatriate to work after the expiry of his/her work permit.

Termination of employee convicted of criminal offence

I am HR Manager in one of the hotel companies in Arusha. Last year one of our room attendants stole a laptop computer from a guest room. We reported the incident to the Police for investigation and she was arrested and charged. Last week she was convicted. Since the date of her arrest she was interdicted though she was under full pay. What is the procedure for terminating her employment? Do we need to a conduct disciplinary inquiry?
SS, Tanga

There is no need to conduct a disciplinary hearing. Disciplinary inquiry was meant to afford an employee his/her fundamental right to be heard before he/she is condemned by the employer for a misconduct. Where the employee has been heard by a criminal Court and convicted of a criminal offence which also materially constitutes a misconduct, it will be superfluous to conduct a disciplinary hearing unless the offence for which the employee was convicted by the Court is different from the offence for which the employer intends to terminate her/him. Where the offence for which the employee was convicted is materially the same as the misconduct for which the employer wants to terminate her/him, the employer shall be entitled to rely on the criminal conviction to terminate the employment. The standard of proof in criminal prosecution is higher than the standard of proof in disciplinary inquiry. So conviction in criminal charge is enough proof of a misconduct. You can accordingly proceed.

Receiver to inform TRA of appointment

I was appointed as a Receiver in a company few months back and have been informed by the Tanzania Revenue Authority that I should have notified them of my appointment. Is that a legal requirement as the Companies Act is silent on this?
RK, Dar

The Tax Administration Act in section 66 makes it mandatory to inform the TRA of your appointment within 14 days of such appointment. The TRA may also then serve you a notice specifying an amount that appears to be sufficient to provide for any tax due or that will become due by the company.

As Receiver, and after liquidating the company, you must ensure that the correct amount of tax is remitted to the TRA. Should you fail to set aside an amount as required by the TRA, you may become personally liable to pay to the TRA on account of the company, although you can then claim this back from the company.