Q&A – 18 June 2018

Tax amnesty in Tanzania

In the recent budget speech by the Minister for Finance, I have learnt that there is a tax amnesty for taxpayers going back indefinitely based on amounts that you believe are payable. How does this work as I wish to apply for it?
UU, Dar

This is a question that we only just received and because of its timing, we have taken up answering it despite the backlog of pending questions. We start by reproducing what the English version of the budget speech stated in terms of this tax amnesty. The Honourable Minister said the following: Honourable Speaker, I propose to make amendment in the Tax Administration Act, CAP 438 in order to introduce Tax Amnesty. The proposed 100 percent amnesty on interest and penalties will exist for six months starting from 1st July 2018 up to 31st December 2018. This measure is expected to improve tax compliance by 10 percent and hence enable the Government to collect the outstanding principal amount. The amendment in the Tax Administration Act is expected to increase Government revenue by TZS 500,000M.

Unless we see the final Finance Act and the specific amendments that have been made to the Tax Administration Act, we cannot give you specific answers. However, borrowing from other jurisdictions, we will give you some principles of what an amnesty entails.

Tax amnesty is generally a limited time opportunity for a specified group of taxpayers to pay a defined amount, in exchange for forgiveness of a tax liability (including interest and penalties) relating to a previous tax period or periods and without fear of criminal prosecution. In some cases, laws that extend amnesty also impose harsher penalties on those who are eligible for amnesty but do not take it. Tax amnesty is one of voluntary compliance strategies to increase tax base and tax revenue. Tax amnesty is different from other voluntary compliance strategies in part where tax amnesty usually waives the taxpayers tax liability.

In the present speech it is unclear whether the tax amnesty will apply to all assessments past, present and future, and whether it will apply to those assessments which are under the tax dispute mechanism, be it at objection or the tax Courts. It is also unclear if it will apply to taxpayers who are already or soon to be placed under investigation. You must note that the amnesty is for a period of only 6 months expiring end of this year, and applies to interest and fines only, which do constitute a large amount in assessments.

The tax amnesty is not based on amounts you think are payable but on the principal amount that you might be disputing. You will need to wait for the Finance Act to be sure what is covered and what is not, and how it plays into your tax affairs. It is, indeed, a welcome gesture by the Government which many taxpayers should take up. With the current strictness in tax law implementation, and non-compliance by a number of taxpayers, we expect it to be quite successful, of course, subject to the final wording of the Finance Act.

Marriage for fixed period

Can I enter into an agreement, like any other agreement, to get married for few years, and if I am happy then we can extend for another few years. We can provide for all terms and conditions in the agreement including what we will do with the children and assets we acquire. We need to be realistic in this modern era especially with these difficult women. Please guide.
YI, Moshi

To begin with, the Law of Marriage Act provides the following under duration of marriage: A marriage, whether contracted in Mainland Tanzania or elsewhere, shall for all purposes of the law of Mainland Tanzania subsist until determined– (a) by the death of either party thereto; (b) by a decree declaring that the death of either party thereto is presumed; (c) by a decree of annulment; (d) by a decree of divorce; or (e) by an extra-judicial divorce outside Tanzania which is recognised in Tanzania under the provisions of section 92.

There is no provision in the law that allows you to marry for few years and then decide whether you want to continue with marriage or not. Marriage is a bond, and your wife is not a commodity that you can exchange after few years. The only way for you to exit a marriage is by way of a divorce if you are both alive at the time.

As for women being difficult, as a female attorney answering this I must state that an objective test must be applied. The difficulty mainly arises because of the behaviour of men. Men do not respect the workload women carry in raising the children and working for the betterment of the family. I have read your other part of the question that we have not published and believe you might need some serious counselling for you to respect women before you tie the knot. Without such counselling, your short term marriage, if one was available, would not last very long either. I wish you luck.

HIV status to spouse

Is it necessary for a husband to inform his wife of the results of his HIV test? Is that not breach of his privacy?
IO, Mwanza

The HIV & AIDS (Prevention and Control) Act 2008 unambiguously states that (1) Any person who has knowledge of being infected with HIV after being tested shall- (a) immediately inform his spouse or sexual partner of the fact; and (b) take all reasonable measures and precautions to prevent the transmission of HIV to others. (2) The person referred to under subsection (1) shall inform his spouse or his sexual partner of the risk of becoming infected if he has sex with such person unless that other person knows that fact.

It is therefore mandatory for such a person to inform his spouse or sexual partner of his HIV positive status and if he does not, he could be held as trying to intentionally transmit the disease and be liable to imprisonment of between 5 to 10 years.