Q&A – 20 May 2024

Taxation of a divorce property

My husband and I recently finalized our divorce and have divided several properties between us as part of the divorce. Of course, I got the largest share since I have custody of our two children. Someone informed me there are tax implications even for divorce properties. How can this be? Divorce is hard, why would the Tax Authority also want to make life harder? Please educate me on the position of the law.
BK, Mwanza

It is true that divorce is hard especially when children are involved. When property changes ownership from one person to another, the Tax Authority treats this as a transfer. In this transfer, one party is treated as having realized the assets hence obtaining income and the other party having incurred an expenditure to obtain the asset. Nonetheless, special rules apply to this kind of transfer for tax purposes. Section 43 of the Income Tax Act [Cap. 332 R.E 2019] states where on divorce settlement or bona fide separation agreement an individual transfers an asset to a spouse or former spouse and an election of this subsection to apply is made by the spouse or former spouse in writing- (a) the individual is treated as deriving an amount in respect of the realization equal to the net cost of the asset immediately before the realization and (b) the spouse or former spouse is treated as incurring expenditure of the amount referred to in paragraph (a) in acquiring the asset.
Your lawyer may guide you further on this. We recommend you stay fully compliant.

Pilot licence for drones

I am an event photographer. The Tanzania law on drones is very new and unfortunately, most of us are not aware of it. For example, I registered a drone for use in Tanzania but I don’t know if I also need a licence to operate this drone. I want to be compliant. Please guide me.
PC, Mara

Matters concerning drones are regulated by The Civil Aviation (Remotely Piloted Aircraft Systems) Regulations, 2018 (GN. No. 758 of 2018) (the Regulations). The Regulations were adopted in 2018 to regulate the operation of Remotely Piloted Aircraft Systems (RPAS) in Tanzania but it is true many people are not aware of them.
In regards to your question, regulation 46 states that a person shall not fly a RPAS for commercial or private purposes, without a valid licence issued by the Authority in accordance with these Regulations. According to the Regulations, an applicant for RPAS Pilots Licence shall (a) be at least 21 years old; (b) hold a current medical certificate; (c) demonstrate English language proficiency; (d) hold a radio telephony licence; (e) have completed a course of training approved by the Authority; and (f) have passed a knowledge and skills test. Further, where applicable, RPAS pilot shall hold an appropriate rating for the type of operations they will perform including-(a) type rating; (b) instrument rating; (c) night rating; and (d) instructor rating.
We advise that you consult your lawyer to make yourself aware of the compliance requirement under the Regulations.

Privacy of women in a civil suit

I am a married woman residing in Tanga. Recently, a summons was issued by a Court directing that I appear as a witness in a civil suit. The challenge is that according to the commandments of my religion, married women are not allowed to appear in public unless fully covered and accompanied by their husbands. Is there a way to accommodate my need for privacy?
Kindly guide me.
SH Tanga

Civil suits are governed by the Civil Procedure Code [CAP. 33 R.E. 2019] (the Civil Procedure Code). The privacy of women enjoined by religion or custom is respected by the Civil Procedure Code. Section 83 provides that women who, according to their religion or local custom, do not appear in public shall, when appearing or required to appear in Court pursuant to any process issued by the Court, be accorded such facilities for maintaining their privacy as may be reasonable and practicable. Nonetheless, the law is clear that this section does not exempt such women from arrest in execution of civil process. In that regard, the Court that summoned you is required to accommodate your need for privacy. Giving prior information to the Court about your religious needs will assist in the hearing preparations.

Death of a party to an Arbitration Agreement

I was appointed as administrator of my father’s estate. He was a prominent businessman who also had many disputes with his business associates. Unfortunately, there is a new case against him that has been instituted in Court. The dispute stems from a contract for delivery of goods which also contained an arbitration clause. My concern is shall we proceed with this dispute in Court because my father is now dead or should we refer it to arbitration as previously agreed in the Contract? Please guide me.
ML, Dar es Salaam

We are sorry to hear about your loss. Matters concerning arbitration in Tanzania are governed by the Arbitration Act [CAP. 15 R.E. 2020] (the Arbitration Act). According to section 13 of the Arbitration Act, unless otherwise agreed by the parties, an arbitration agreement is not discharged by the death of a party and may be enforced by or against the personal representative of that party. However, this shall not affect the operation of any enactment or rule of law by virtue of which a substantive right or obligation is extinguished by death.

Death does not discharge the arbitration agreement, and the law requires that the dispute is resolved by arbitration as agreed by the parties. We have not reviewed the contract you mentioned, so we cannot comment whether the parties had agreed otherwise. Your lawyer can guide you further.