Q&A – 13 March 2023
Old wife Tanzanian, new wife foreigner
My wife and I, who are both Tanzanians, own a company which in turn owns a prime property. My wife divorced me and we have had an agreement that I buy her out, which I did, and then transferred the shares to my beautiful new wife who is not a Tanzanian. At the moment, sixty percent of the shares are held by my new wife and I own the remaining forty percent shareholder. I have the right of occupancy (title deed) but have been told that my company cannot continue owning the property as the shareholding is majority foreign? My point is that when I bought the property through my company, the shareholding was local, and I don’t see why this is being raised now with my new wife. Shouldn’t the law be looking at the status only when one purchases and not thereafter? I do not want to upset my new wife as she is very sensitive. How do I handle my wife? Please guide me on what I should do?
Unfortunately, we cannot guide you on how to handle your wife. That is not a legal question and we have no competence in that field. Even the author of this question, being a woman, knows the kind of trouble you may get into. Moreover, the answer below to this question will also not make your new wife very happy.
When you bought the property with the first wife, the company was 100% owned by Tanzanians i.e. you and your first wife. Unfortunately the land laws of Tanzania, particularly the Land Act, do not allow foreigners to own land. Further the law also does not allow a company with majority foreign shareholding to own land unless it is for investment purposes approved under the Tanzania Investment Act. From your explanation, your current wife is not Tanzanian and she now holds 60% of the shares in the company and you hold 40%. That being the case, the majority shareholding of your company is now foreign and hence falls under the restriction provided under the Land Act as explained above.
For your company to now continue owning such land and comply with the laws, it must comply with the requirements of the Tanzania Investment Act and be issued with a derivative right to hold such land for investment purposes only. It is important that you address this as soon as possible as continuing holding such land by your company may be interpreted by the land authorities as breach of the conditions of right of occupancy which may trigger the process for revocation. We advise that you consult your lawyer for further advice.
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.
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.
Adoption of a child
My Aunt has been married for more than nine years and has no child of her own, However her husband and her have been living with a boy of 12 years and they now want to adopt him. A neighbor told them that they can just go to the police and inform them accordingly and they will be able to register the boy as their adopted child. Is that correct? Are there any requirements under the law?
The Law of the Child Act (Act) recognises an open adoption and stipulates a list of requirements that are to be fulfilled before initializing the process. Section 56 of the Act requires the prospective parents to be residing in Tanzania and to be above 25 years of age and at least 21 years older than the child. On top of that, in case of an application by one spouse, the other party has to consent to the adoption. You can’t merely go to the police station and adopt.
The applicant(s) will also be required to visit the District Social Welfare Office so as to be assessed of their suitability to adopt the child and ensure that the child’s views regarding the adoption are ascertained and recorded in the social investigation report.
Further to the above, the applicants will be obliged to submit three referees as well as obtaining parental consent of the parents or guardians of the child they intend to adopt. They will then have to lodge an application letter to the Commissioner for Social Welfare at Dodoma, before filing a petition in Court for purposes of adoption. The key test is always what is in the interest of the child and the suitability of the adopting parents.