Q&A – 30 September 2019

Tax investigation by TRA, Police and PCCB

I have seen TRA, PCCB and even Police conducting tax crimes investigation. I would like to know what specific organ is mandated to conduct investigation of tax crimes. It is so confusing as they seem to be seated together in a so called task force. Who is in charge and why are they not coordinated? Why should I take the same information to different agencies? This is not helping businesses to prosper and much as people are being forced to pay because of penal sanctions, in the medium and long term this is destroying the business environment in the country. Please guide on whether the police and others can follow up tax matters.
FG, Dar

Under the Police Force and Auxiliary Services Act and Criminal Procedure Act, police have the general power to investigate all crimes including tax crimes. Establishment of a specialized investigative agency for a specified crime does not oust Police power to investigate a particular crime for which there is a specialized investigative agency. Police have the power to investigate all tax crimes. However unlike Police, PCCB have limited investigative powers. Under section 7(a) and (b) of the Prevention and Combating of Corruption Act, the PCCB have power to investigate corruption offences and non-corruption offences like tax offences whose commission involve corrupt practices or are committed along with tax crime or involve misconduct by a public official. To that extent PCCB does have such power.

Most tax crimes, though not corruption offences per se, are deemed to be offences involving public officials dealing with administration of revenue like tax assessors, tax auditors and tax investigators. The commission of tax crimes is sometimes associated with corrupt practices. In the case of Mariam Mashaka Faustine and others v AG and others, Misc Civil Cause No. 88 and 95 of 2010, the High Court was of the view that even where the PCCB investigation comes out with non corruption offences only, investigation of those offences does not become unlawful simply because there is no public official whose conduct was investigated or there is no a public official who is charged. Since the High Court gave decision in Mariam Mashaka Faustine’s case, PCCB have conducted several other tax investigations that have led to the institution of high profile tax crime charges in our Courts.

Moreover under section 5(2)(b) of the Tax Administration Act the Commissioner General of TRA has power to investigate tax crimes and may co-opt other investigative agencies in terms of section 19 of the Tax Administration Act. Hence PCCB, TRA and police investigating tax crimes is not illegal per se.

Additionally despite there being three authorities vested with power to investigate tax crimes, the DPP can invoke his power under section 9(1)(e) and 16(2) of the National Prosecutions Service Act, 2008 to form one investigation team comprised of the Police, PCCB and TRA to investigate a tax crime. When these investigative agencies work together, Police normally takes lead because investigation is primarily the function of the police.

On the inconvenience with the multiple agencies asking for tax information, it is true that it is not very healthy for business. This can however be reported to the relevant ministries to streamline the process, although in the last many years there has been a lot of tax fraud that is being investigated.

Registration requirements for homemade popcorn

I make homemade popcorn that I pack and sell to supermarkets. Do I need any approvals as I am a small-scale house wife type operator? Just like the Mama Ntilie’s I do not have any TRA registration at the moment and don’t intend to get one. What do you suggest?
KF, Dar

We are aware that there are many such informal businesses in Tanzania, some of them now quite large and doing reasonably well. Tax registration under our Tax Administration Act is mandatory for such a business as is getting a business licence. As soon as you are selling goods to customers, that becomes a taxable event, no matter how small you claim your business to be. Much as it is something that very few people in your category comply with, we recommend that you do so.

Another required approval is from the Tanzania Food and Drugs Authority (TFDA) which is established under section 4 of the Tanzania Food, Drugs and Cosmetics Act of 2003. TFDA operates as an agency in regulating and controlling of food, drugs and cosmetics in Tanzania. Section 28 of the Act stipulates that no person shall manufacture, import, distribute, sell or expose for sale pre-packaged food unless that food or food product has been registered by the Authority.

Apart from that, the Tanzania Food, Drugs and Cosmetics (Registration of Foods) Regulations number 207 of 2011 restricts the sale of unregistered food products. It also provides for the procedure for application of registration of prepackaged food and it makes it mandatory for the application to be accompanied with the sample of food. After being satisfied that the food product complies with the requirements, the Authority will grant a certificate of registration.

Since you haven’t told us how large your business is, then depending on the number of employees you have, there might be a need to comply with the Occupational Safety and Health Act, better known as OSHA. This law deals with safety and health management actions, taking all measures possible to protect employees from illness or injury, and educating employees on workplace health and safety measures amongst others.

Husband dictates naming of children

I am a married woman living in Dar. My husband and I are educated and work in the public sector. Is there a law that governs naming of children as I would like to name this child of ours, my husband having named all the others?
OL, Mwanza

The Law of Child Act, Act No. 21 of 2009 under Section 6 provides that a child shall have a right to a name, nationality and to know his biological parents and extended family.

Unfortunately, there is no law that dictates whether the father or mother should name the child. There is also no case law for us to guide you on. We suggest you get some elders to sit with you and resolve this. You might be able to resolve this dispute in Court, but the Court system is back logged and by the time your dispute is resolved, you might already have delivered.