CAG’s Report: Sh382.6trn tied up in court system
What you need to know:
- Taxes tied up in the appeal machinery pending rulings jumped by 8595 per cent to Sh382.6 trillion (more than $100 billion) in the year ending June 2018 compared to the same period in the previous year as a result of the Acacia Gold tax case with the government, a 2017/18 Controller and Auditor General report has revealed.
Dodoma. Taxes tied up in the appeal machinery pending rulings jumped by 8595 per cent in the year ending June 2018 compared to the same period in the previous year, a 2017/18 Controller and Auditor General report has revealed.
“My audit has established that TRA had long outstanding cases at various tax appeals machinery amounting to Sh382.6 trillion waiting for rulings from cases worth 4.4 trillion in 2016/17,” said Prof Mussa Assad in Dodoma.
This significant increase in tax cases, he said, was attributed to increased public awareness of the existence of Tax Revenue Appeal Board (TRAB) and amendments of Tax Revenue Appeals Board Rules in 2018 which simplified the procedures of appealing to determination of tax disputes.
The report also connected the trend with existence of four Acacia Mining tax cases worth Sh374.7 trillion which account for 98.08 percent of cases at TRAB.
The bone of the case is an accusation of the company that it entered into a sophisticated scheme of tax evasion, aimed at saving millions of dollars in income tax, penalties and interests.
Prof Assad said his report established inefficiency in handling and resolving tax objections cases by the taxman management.
“I noted that the taxman has objection applications with total taxes of Sh77.8 billion filed by taxpayers that were outstanding beyond the allowable period as specified in TRA Service Charter,” reads a report in part.
Adding: “Delay in settlement of tax objection applications have a negative impact on revenue collections targets since these cases tie up a substantial amount of money.”
The report suggested that the government should have sufficient human and financial resources at TRAB and Tax Revenue Appeals Tribunal (TRAT) to enable those institutions to hear and clear outstanding tax appeal cases.
It added that by calling for an increase of the number of competent staff will enhance the capacity of TRA in dealing with tax objections, collection of tax arrears and assessed taxes.
