THE Commissioner General of the Tanzania Revenue Authority (TRA) has taken the 522m/- tax dispute with Tandrill Limited, a contractor providing drilling services in mines, to the Court of Appeal for final resolution after losing his case before the Tax Revenue Appeals Tribunal last year.
In the appeal, the Commissioner General is asking the Appeals Court to reverse the decision given by the Tribunal on October 1, last year, under the Chairmanship of High Court Judge, Dr Fauz Twaib, and restore the judgment given by the Tax Revenue Appeals Board on April 17, last year.
The Appeals Board had dismissed the appeal by the drilling contractor challenging assessment of tax by TRA Commissioner General amounting to 522,476,714/98 after receiving payment for providing technical services to North Mara Gold Mines Limited for a period of between 2006 and 2010.
According to memorandum of appeal, the Commissioner General states that the Tribunal erred in not holding that North Mara Gold Mines Limited, for which Tandrill Limited provided services, was not entitled to apply withholding tax value of three per cent in deducting tax payable by the company.
The Commissioner General states that Tribunal erred by not holding that North Mara Gold Mines Limited was supposed to apply the withholding tax rule of five per cent in deducting withholding tax payable by the company on technical service fees. Furthermore, the appellant states, "The Tribunal erred in both law and facts in holding to the effect that North Mara Gold Mines Limited was entitled into between the government of Tanzania and Africa Mashariki Gold Mines Limited in deducting withholding tax payable by the respondent (Tandrill) on technical service fees."
The centre of the controversy surrounding the matter involves alleged wrong application of withholding tax rate. Tandrill is a drilling company. Its business includes the provision of drilling services to mining companies in Tanzania. Among its clients was North Mara Gold Mines Limited in Musoma.