18 February 2013

Tanzania: TRA Demands Sh3 Billion in Taxes From Fastjet

PROBLEMS are piling up on Fly540 Tanzania which has been rebranded to FastJet, as the Tanzania Revenue Authority (TRA) is demanding unpaid taxes amounting to 2.8 bn/-.

The TRA claim comes a few days after the Tanzania Airports Authority (TAA) had demanded the airline to pay over 570,668,242/- and 95,360.50 US Dollars in outstanding landing and parking charges.

The TAA letter dated February 12 this year also requires the airline to provide the authority within three working days a clear position regarding the clearance of the outstanding debt.

In the latest move, TRA claims in the letter whose copy was availed to 'Daily News' that the airline has not met its obligations which include tax liabilities such as Pay As You Earn (PAYE) as per payroll analysis amounting to 456,317,637/- and PAYE difference with accounts worth of 987,517,985/-.

Other categories of tax claims include; Skills Development Levy (SDL) amounting to 117,872,376 /-, SDL per differences with final accounts worth of 237,004,317/- , final rental tax of 70,877,283/-, stamp duty amounting to 15,708,037/- and departure tax of 951,562,012/-.

Dated December 3, 2012, the document states that the scope of TRA audit of tax liabilities facing the airline had included corporate tax remittances from 2009 to 2011, PAYE and SDL starting from January 2009 to November 2012 and Rental and Stamp Duty from 2009 to 2012.

According to TRA, the preliminary audit of all categories of taxes outlined above are yet to be paid by the company which was registered as an airline known as Fly540 Tanzania on May 29th in 2008. The TRA document further states that the audit was intended to induce voluntary compliance through effective and efficient tax audit programme and to utilize audit opportunities to educate, foster customer care hence build trust, confidence and improved compliance to tax payer, FastJet.

Fastjet is incorporated in England and Wales under the companies Act 1985 with its registered office at Gatwick Airport in the UK. FastJet's Africa Operations, previously Lonrho Aviation (BVI) Ltd, have been licensing the Fly540 brand from Five Forty Aviation since 2008.

FastJet's Africa Operations now fly three Fly540 branded planes in Angola and two in Ghana. It flew two planes using the Fly540 brand in Tanzania until November 2012 when the new company took over its operations in the country.

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