Q&A – 15 August 2016

TRA powers to stop me leaving country

We have some tax issues under the Income Tax Act and I am worried that the Tanzania Revenue Authority may stop me from leaving the country for my holiday. We are following all the procedures under the law but with the aggressive tax stand being taken I am worried. Please guide.
CP, Mwanza

You have not provided enough details on the dispute, and what stage of the dispute you are at and what steps you have taken. As is the case in other jurisdictions with revenue authorities from there, TRAs job is to ensure that it safeguards government revenue and it does have powers to stop one from leaving the country.

Section 114 of the Income Tax Act states that (1) Subsection (2) applies where a person fails to pay tax on or before the date the tax is payable. (2) Where this subsection applies, the Commissioner may, by notice in writing to the Director of Immigration, order the Director to prevent the person from leaving the United Republic for a period of 72 hours from the time the notice is served on the Director. (3) The Commissioner shall withdraw a notice under subsection (2) where the person pays the tax or makes an arrangement for payment satisfactory to the Commissioner. (4) On application by the Commissioner, the High Court may extend the period referred to in subsection (2).

TRA have thus a mandate to stop you from leaving the country after informing the Director of Immigration, but that only applies if you have failed to pay tax. For you to pay tax it should either be undisputed, or the Appellate Court rules that it is payable. We have not seen cases of TRA trying to implore this section when the tax is disputed, as seems to be the case here.

In conclusion it is very unlikely that you will be stopped from leaving the country but you need to disclose all details to your tax consultant who can give you the final opinion.

Dislike of guy daughter dating

My girl who is in university is dating this guy whom I cannot stand. After years of raising my girl, having spent so much on her, I want to use the force of the law to stop her seeing him. I have been reading your excellent columns since the beginning and I expect you to please use all your brain cells to guide me what to do.
PP, Dar

We have spent more time than we would have to think about a response that will please use. We have, after using all our brains and brain cells, not found one, and sadly the answer is you cannot do anything. Your daughter is of legal age and can date whoever she wants.

Your only option is to try and get a third party, or a counsellor involved to explain to her what you have explained to us. Our Constitution guarantees a right to personal freedom, right to privacy and personal security, right to freedom of movement and right to freedom of expression, amongst others. Just because you cared for her, which is your statutory duty, doesn’t mean that you can do what you want with her or her boyfriend.

Query from Minister

Our company has received a notice from the Minister of Industry and Trade raising queries on our annual accounts. Is this proper? Does the law allow the minister to intervene with company accounts?
DM, Dodoma

Companies in Tanzania are regulated by several laws and regulations and each one of the regulators have respective powers under the law. For example the Commissioner of TRA is given several powers under the Tax Administration Act, Income Tax Act or other tax laws and regulations and he therefore administers the same as per the law. The same applies with the registrar of companies and minister responsible for Industry and Trade.

The Minister for Industry and trade is given several powers by the Companies Act. One of such powers is to issue a notice to a company if it appears to the minister that the accounts of a company did not comply with the requirements of the law. Although we have not seen it, and it is quite uncommon, but this should be the kind of notice that you have been issued with. Companies are required to issue annual accounts as per section 164 of the companies act. Section 164 requires a copy of the annual accounts, in respect of each accounting period, together with a copy of the Directors’ Report and the Auditors’ Report to be sent to every member of the company (whether he is or is not entitled to receive notices of general meetings of the company), every holder of debentures of the company (whether he is or is not so entitled) and all persons other than members or holders of debentures of the company, being persons so entitled in a period of not less than twenty-one days before the date of the general meeting at which such accounts are to be laid in accordance with the law.

Section 168 of the Companies Act stipulates very clearly that if it appears to the Minister that there is, or may be, a question whether the accounts comply with the requirements of the Companies Act, he may give notice to the directors of the company indicating the respects in which it appears to him that such a question arises, or may arise. Further the notice will specify a period of not less than one month for the directors to give him an explanation of the accounts or prepare revised accounts. If at the end of the specified period it appears to the Minister that no satisfactory explanation of the accounts has been given and that the accounts have not been revised so as to comply with the requirements of the Act, the Minister may if he thinks fit apply to the Court for an order that the company prepare and have audited revised accounts.