Tribunal rules Board has no jurisdiction over tax waiver appeals

Tribunal rules Board has no jurisdiction over tax waiver appeals

When a taxpayer's claim for a one-third waiver is refused by the Tanzania Revenue Authority, there is already a lot of confusion about what an aggrieved taxpayer can do. A taxpayer who wishes to file an objection against an assessment issued by the Commissioner General must deposit one-third of the amount assessed or tax not in question, or seek a waiver to allow such a deposit, according to our legislation. The ambiguity arises from tax courts' varying opinions about whether a taxpayer should challenge a waiver ruling immediately to the Tax Revenue Appeals Board or must file a second objection before appealing to the Board.

Commissioner General (TRA) vs. Mek One, Tax Appeal Nos. 69 & 70 of 2019, affirmed the Tax Revenue Appeal Tribunal's (Tribunal) earlier position that the Board lacked authority to hear and determine waiver denial appeals because such appeals do not emerge from objection decisions as required by section 16(1) of the Tax Revenue Appeals Act (the TRAA). To affirm its prior stance on waiver petitions, the Tribunal focused on the principle of stare decisis (precedent). The Tribunal also observed that the Court of Appeal's latest decision in Commissioner General, Tanzania Revenue Authority vs. New Musoma Textiles Limited, Civil Appeal No. 119 of 2019, was not applicable in waiver appeals.

The Tribunal claimed that the Current Musoma Case was not directly about a waiver appeal, and that it did not interpret provisions of the TRAA's sections 7 and 16(1), as well as section 53(1) of the Tax Administration Act, 2015 (the TAA), that are relevant in waiver appeals. Taxpayers would be frustrated by the Tribunal's ruling, which came despite the Board's previous rulings stating that it has authority over waiver appeals rendered shortly after the TRA refuses them.

It's worth noting that the Tribunal decided in TPCC vs. Commissioner General, Tanzania Revenue Authority, Tax Appeal No. 8 of 2019, that the Board's power to hear and settle tax cases is limited to objection decisions only. Any other decision, the Tribunal decided, cannot be specifically challenged to the Board without first going through the TRA's objection process.

In the case of PanAfrican Energy Tanzania Limited vs. Commissioner General (TRA), Civil Appeal No. 121 of 2018, the Court of Appeal kicked off the waiver appeals discussion. The Court of Appeal held in this case that section 16(1) of the TRAA, as amended by the TAA, limited the right of appeal granted by section 53(1) of the TAA to only objection decisions. This stance meant that, since waiver denial decisions were not the outcome of objection hearings and therefore were non-objection decisions, all appeals to the Board based on those decisions were unsuccessful.

The Court of Appeal's ruling has been generally viewed as involving the submission of a second challenge to the waiver decision with the TRA before filing an appeal with the Board. The TRA and taxpayer will suffer as a result of this new layer, which the Tribunal has now clearly identified.

This back-and-forth on waiver appeals causes more confusion in Tanzanian tax administration, necessitating both legal and institutional changes.

It now remains for the Court of Appeal to give its final decision on the matter