MANAGING TAX RISKS : Tax disputes resolution in Tanzania

Last week we discussed tax dispute resolution mechanism in Tanzania focusingontax objections. We noted that under the Tax Administration Act, 2015 and the Tax Revenue Appeals Act, 2000 if a person is aggrieved by Tanzania Revenue Authority Commissioner General’s decision he may file an objection to the Commissioner General as the first attempt by a tax payer to resolve a tax dispute.

The article looked at tax decisions which can be objected; examples of matters which can lead to an objection; timeframe for filing an objection; requirement to make a deposit for an objection to be admitted and the format of the objection.

Today’s article continues the discussion on tax objectionswith a discussion of key matters for the tax payer to pay attention when filing a tax objection.

Adhering to the Time Limit for Filling Objection

There is a need to adhere to the 30 days’ time limit for filing an objection as provided for in the tax laws.Objections will be rejected if filed outside this period.However, with good reasons and upon application, the Commissioner General can admit a late objectionupon application. These reasons are:

• Absence from the URT

• Sickness

• Other reasonable cause.

However supporting evidences should be attached to substantiate the reasons indicated in the application.Examples of documents include travel documents, medical documents etc.

Objection to each assessment separately

When TRA has issued more than one assessment, the tax payer must ensure that each assessment is objected separately even when the reasons are the same. For instance VAT or income tax assessments may be issued for a number of years. Only objected assessments are admitted by TRA.

Filling objection and refusal for admission

The law requires that objections should be filed to the Commissioner General although practicallyobjections are normally filed at the tax office which has issued the assessment.

Normally objections shall not be admitted if they are filed outside the 30 days period, do not meet the prescribed format i.e. not written in a precise form with stipulations of the grounds in respect of which the objection to an assessment is made.

Also, an objectionshall not be admitted if the prepayment requirement has not been met i.e. the higher of 1/3 of assessed tax or undisputed tax except where the Commissioner General has waived or accepted a lesser amount of deposit.

Further, a tax objection shall not be admitted due to a number of other reasons including for instancefiling an objection which does not raise a question of law or fact relating to the assessment or for instance when the relief sought for by the tax payer cannot be provided on the basis of law or equity or the objection is deemed misconceived.

Admitted objections

After filing an objection, a review will be made by TRA and if the objection has met allrequirements, it will be admitted.The tax payer will be informed that it has been admitted and being processed.

The tax payer should use this period to engage with TRA by providing all the required documents and information to ensure that the tax officers/Commissioner are convinced that the tax assessmentshas weaknesses and require some changes in favor of the tax payer.

Mr Makundi is a partner with Auditax International