Tanzania: Star Media Appeal Against TRA Dismissed With Costs

THE Court of Appeal has dismissed with costs of the appeal launched by Star Media (Tanzania) Limited, challenging assessment of tax imposed on them by the Tanzania Revenue Authority (TRA) for 2013, 2014 and 2015 years of income amounting to over 8.4bn/-.

Justices Stella Mugasha, Winfrida Korosso and Ignas Kitusi ruled against the media organ, the appellant, after observing the appeal lodged to oppose the findings of the Tax Appeals Revenue Tribunal (Tribunal) lacked merits.

"... we have no justification for interfering with the decision of the Tribunal. Accordingly, we find no merit in this appeal. We dismiss it in its entirety, with costs," they declared in favour of TRA, the respondent.

During hearing of the appeal, the counsel for the appellant had contended, among others, that his client was denied the right to be heard when the TRA, the respondent, determined the objection as regard to the assessment of the tax in question.

In their deliberations, the justices of the appeals court held that having scrutinized section 52 of the Tax Revenue Appeals Act the respondent acted within the law and the appellant's insinuation of denial of a hearing is a vain attempt lacking legal support.

They noted that section 52(1) of the Act empowers the respondent to request for more evidence and acting under those powers, he wrote to the appellant on May 29, 2017 requiring submission by her of duly signed audited financial statements.

According to the justices, on June 6, 2017, the respondent wrote to the appellant a letter intimating an intention to confirm the assessments after the appellant's failure to submit the said statements.

They held, therefore, that the very request for evidence in the form of duly signed audited financial statements was an opportunity for the appellant to be heard by substantiating her objection.

"Even when no statements were submitted, the record shows that the respondent did not unilaterally confirm the assessments. Rather, it wrote to the appellant and gave her 30 days within which she could make submissions in opposition to the proposed confirmation," the justices said.

They concluded, therefore, that since the appellant made no submissions for the respondent to consider, she could not blame anyone for the self-inflicted injury that resulted.

"What we gather from the provisions of section 52 of the Act is that the right of a taxpayer to be heard is inherent in it, and the entire appellant as well as the respondent needed to do was to comply with that provision," the justices said.

To conclude, they agreed with the Tribunal that there was no illegality and that in any event, not every time illegality is raised, it should entitle a party to extension of time. After all, they said, the decision of the Tribunal was in the exercise of its discretionary powers which is rarely questioned by a superior court.

The appeal arose from the decisions of the Tax Appeals Board (Board) and the Revenue Tax Appeals Tribunal (Tribunal) in which the Board dismissed the appellant's application for extension of time and the Tribunal dismissing the subsequent appeal that sought to challenge the Board's decision.

On March 31, 2017, the respondent in exercise of its statutory powers, served the appellant with tax assessments for the years of income 2013, 2014 and 2015 raising a demand for a total of 8,443,993,166/-.

The appellant objected to the assessment and the objection was admitted by the respondent after payment of 150m/- by the appellant.

Prior to the determination of the objection, the respondent had written to the appellant requiring her to submit to its audited financial statements for the years under scrutiny, and to do so within three days.

However, the appellant could not do so within time on the ground that the statements were in the office of the Controller and Auditor General (CAG), and she wrote the respondent to disclose that predicament.

On June 6, 2017, the respondent informed the appellant in writing that it had determined the objection by refusing to vary or amend the assessment of 8,443,993,106/- and that it intended to confirm it.

The appellant had a right of appeal against the respondent's decision and should have lodged a notice of appeal within 30 days under Rule 3 (1) and (2) of the Tax Revenue Appeals Board Rules, 2018. However, for some reason, she did not lodge that notice within the time stipulated by law.

On August 25, 2017, the appellant lodged at the Board, an application for extension of time within which to lodge a notice of appeal against the respondent's decision. The Board dismissed the application and the appellant's first appeal to the Tribunal to challenge the dismissal bore no fruits.

The Board ruled that the appellant had not shown reasonable cause for the delay as required by section 16 (5) of the Tax Revenue Appeals Act as at the time he informed the respondent by a letter of August 17, 2017, that the statements were in the CAG's office, the objection had already been determined.

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