TRA sues TPA over tax default

THE Commissioner General of the Tanzania Revenue Authority (TRA) has taken to the Court of Appeal the dispute of non-payment of about 3bn/- income tax by the Tanzania Ports Authority (TPA) for the income years between 2001 and 2005.

He is challenging a judgment issued by the Tax Revenue Appeals Tribunal on August 29, last year, by Vice-Chairman Hussein Mataka and two other members, who had ruled in favour of TPA regarding the matter. The TRA chief has advanced five grounds to support his.

“The appellant (the Commissioner General) would pray to the court for an order of quashing the whole decision of the tribunal and all orders arising from,” reads part of appeal documents filed in court last week.

It is alleged that between June 30, 2004 and February 23, 2006, the appellant issued to the TPA, the respondent, with five tax assessments for the year of income between 2001 and 2006, totalling 2,932,763,158/-.

Such assessments were duly objected to by the respondent. After what appeared to be a protracted objection process, save for some slight adjustments in the impugned assessments, the appellant issued and served the respondent with notices of final determination of tax, apparently confirming the disputed assessments.

Having been dissatisfied, the respondent filed an appeal to the Tax Revenue Appeals Board, challenging the legality of the assessed taxes, saying that they are either time barred, need to be amended so as to be in accordance with the respondent’s returns or are generally not tenable at law.

On February 15, last year, the board gave its decision, allowing partly the appeal in question to the extent that the items relating to the years of income 1992 to 2004 were time barred. But the board dismissed the rest of the claims by the TPA.

The commissioner general was dissatisfied by such a decision and crossed over to the tribunal to oppose the findings by the board. After hearing the arguments from the parties, the tribunal dismissed the appeal and allowed a cross-appeal lodged by TPA regarding the subject.

It was at that point when the appellant decided to seek the intervention of the Appeals Court. He is alleging that the tribunal erred in law and facts in holding that the demand for tax for the year 1992 and 2004 was time barred and in failure to consider the doctrine of estoppels as raised by the appellant.

The appellant alleges that the tribunal erred in law and facts in holding that the Income Tax Act 1973 provided for taxation on accrued basis and that the foreign exchange gains and losses for the year of income 1992 to 2004 inclusive must be treated on accrual basis as provided for under the Act.

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