Institutional Framework for Tax Administration and Tax Dispute Resolution in Tanzania.

1. The Commissioner General (TRA)

The Commissioner General of TRA is an important stakeholder in tax disputes resolution. He has been imposed with mandate to regulated all tax related issues include tax assessment and disputes resolution. Section 50(1) of the Tax Administration Act gives official mandate to Commissioner General to make any tax decisions he think fit include tax assessment. A taxpayer aggrieved by tax assessment of the commissioner may object such tax assessment within 30 days from the date of service of assessment or the commissioner may extend time as he thinks fit for that purpose. Objections will not be admitted unless undisputed tax or 1/3 of the assessed tax is paid whichever amount greater.

As per section 52(1) of the Tax Administration Act, upon admission of an object, Commissioner General may make decision to amend his assessments or he may uphold his previous decision. At this time, a commissioner may call any information from a taxpayer and a taxpayer will be liable to furnish that information to commissioner for the purpose of the dispute. If a commissioner finds that his tax assessments were wrong, he may amend and issue final assessment note to a tax payer or he may make any decision fit which a taxpayer will act upon. In case of refusal of tax objection by a commissioner, a taxpayer in a period of thirty days is required to make submission before a commissioner if he agrees or disagree with amendment of tax assessment or refusal of tax objection where a commissioner will issue a final determination.

2. The Tax Revenue Appeals Board (TRAB)

Section 4(1) of the Tax Revenue Appeals Act[1] establishes the Tax Revenue Appeals Board (TRAB). The Act provides for the structure or composition of TRAB and TRAT as per section 4(2) of the Act. Section 4(2) provides that, TRAB is made up of a team of the following people; chairman who is an appointee of the responsible minister; three vice chairmen wo are appointee of the minister, one of them must be from Zanzibar; and twelve other members who are appointed by the minister form different regions of Tanzania. TRAB is given under section 7 both original and appellate jurisdiction. Section 7 provides on jurisdiction of TRAB while section 7A together with section 16 provides on rights of appeal against the decisions of the Commissioner.

The TRAB have no power to entertain any appeal arising from assessment of tax unless Section 51 of the Tax Administration Act is complied. A person who is aggrieved by the decision rendered by the Commissioner General (TRA) may lodge an appeal to the TRAB. It is the requirement of the law that, notice of appeal has to be served upon the Commissioner General within thirty (30) days following the date on which a notice of final determination of assessment of tax served on the appellant A person who wishes to appeal to the TRAB has to file a written notice of intention to appeal within thirty (30) days from the date of service of notice of final assessment of tax then, the Secretary shall endorse on it the date received and register all relevant particulars.67 Hearing of appeal shall be in public unless a party to a proceedings otherwise applies and the Board directs that the proceedings or part of it, be heard in camera. The research found that, from July 2017 to April 2018 the TRAB registered 436 cases whereby only 147 cases were heard and decided. This shows that, almost 289 cases were still pending in that particular year. Furthermore, the research found that, backlog of tax cases in the TRAB tends to reduce attractiveness of investment in the country. It also affects both taxpayers‟ businesses and revenue collection by the government due to endless lawsuits.

3. The Tax Revenue Appeals Tribunal (TRAT)

This is also a quasi-judicial body established under the Tax Revenue Appeals Act having sole jurisdiction in all appeals arising from decisions of the TRAB. It has supervisory power over the Board thus, it may call for the records of any appeal proceedings of the TRAB. The Tribunal is required by the law to be composed of a chairperson, two Vice-Chairpersons and four members. However, at the time of the study, TRAT was only composed of a chairperson and two members. The two Vice-Chairmen and two other members had not been appointed.[2] Due to inadequate number and composition of Tribunal members limit them to run parallel sessions consecutively. Where a taxpayer is dissatisfied with the decision of the TRAB, an appeal lies to the TRAT. An appeal has to be affected within thirty days from the date of service of the decision and proceedings of the TRAB and the opposite party has to be served with the notice of intention to appeal within fifteen days from the date of the decision.[3] 

The law allows a party who has good reason to apply for extension of time in case he fails to file the notice of intention to appeal within fifteen days.74 Hearing of an appeal is open to the public unless the Tribunal directs otherwise then after hearing of evidences and submission from the parties, the Chairman is required to pronounce the decision and he may certify the copies and furnish to the parties.

The research found that, there are a number of challenges inherent to the TRAT that affect administration of tax in the country. Adjournment of tax appeals, limited financial resources allocated to the TRAT and accessibility to the TRAT are key challenges that affect effective adjudication of tax cases at the TRAT. These challenges affect the ability of the TRAT in resolving disputes promptly hence, delay in resolving tax cases something that affects smooth administration of tax in the country.

4. The Court of Appeal of Tanzania (CAT)

It is the highest appellate court established in 1979. It was established under Article 117(1) of the Constitution of the United Republic of Tanzania[4] vested with the power to hear and determine every appeal brought before it arising from the judgment or decisions of the High Court or from tribunals having similar powers to that of the High Court like the Tax Revenue Appeals Tribunal. In discharging its appellate jurisdiction, the Court of Appeal has to comply with the provisions of the Appellate Jurisdiction Act and the Court of Appeal Rules.[5]

As far as tax appeals are concerned, Section 25(1) of Tax Revenue Appeals Act provides that, a person who is aggrieved by the decision of the Tribunal may appeal to the Court of Appeal. Rule 25 of the Tax Revenue Appeals Tribunal Rules, 2018 provides that, a person who wishes to appeal to the Court of Appeal has to lodge the notice of intention to appeal to the Tribunal within fourteen days and the Registrar of the Tribunal shall transmit the same to the Court of Appeal within seven days. It has to be noted that, the Court of Appeal of Tanzania is bound by procedural technicalities and rules of evidence, something that affects taxpayers‟ compliance with the procedures. This also jeopardizes taxpayers‟ right of accessing fair hearing.

[1] The Tax Revenue Appeals Act, Cap 408 R.E. 2019

[2] A.G. Msando, Resolving Tax Disputes Through Alternative Dispute Resolution (ADR) Processes In Tanzania: Law And Practice, thesis submitted for partial fulfillment of Masters of Laws (LL.M) Degree, University of Dar es Salaam, 2019, 41.

[3] The Tax Revenue Appeals Act Cap 408 [R.E. 2019], Section 16(4).

[4] The Constitution of the United Republic of Tanzania of 1977 as amended time to time.

[5] The Tax Revenue Appeals Act Cap 408 [R.E. 2019], Section 25(2).