Tanzania: NBC loses its appeal on 13 billion / – Income tax

THE COURT OF APPEAL dismissed with costs an appeal from the National Bank of Commerce (NBC), contesting income tax payments of $ 13bn / – to the Tanzania Revenue Authority (TRA) from 2005 to 2007.

Chief Justice Ibrahim Juma, Judges Augustine Mwarija and Richard Mziray spoke in favor of TRA's Commissioner General, considering that the appeal against the Tax Revenue's findings Appeals Tribunal on payments was unfounded.

During the hearing, NBC, as the appellant, complained of the decision of the Commissioner General to EMR, as respondent, to refuse to deduct the provision for depreciation of its bad debts arising from the assessment of the years of income 2005, 2006 and 2007.

that the respondent had wrongly rejected the deductibility of bad debts that it was justified to be struck out and deductions were permitted under the financial laws prescribed by the Bank of Tanzania (BoT) In their judgment, the judges reviewed Articles 18 (b), 25 (5) and 39 (d) of the Income Tax Act to determine the provision applicable to the deductibility of the deficiencies of the appellant

. Under section 25 (4) and (5) of the Act, in the preparation of his accounts for the purpose of assessment by the respondent, the appellant has the opportunity to 39 to indicate the claim available to it to take into account the deduction

. the ordinary meaning and harmonious construction show that the intention of the legislature here is that after receiving the accounting reports or declarations of the taxpayer as the appellant, the respondent makes his own assessment and has the final say on whether an item is deductible, "In their view, although sections 25 (4) and (5) provide for the preparation of accounts, statements and deduction proposals, sections 18 and 39 (d) provide at the respondent the power to receive statements and accounts of taxpayers a "Although the appellant sought refuge under section 25 (5) (a) of the Act, we must underline here that (he) has not exhausted its power of evidence, the burden of proving that it has complied with one of the two options that the appellant claims to have respected under the Act, "ruled the judges.

They also determined that the appellant did not Had not indicated which option he had respected They pointed out that the appellant had had the opportunity to present evidence to prove that he complied with Article 25 of the Income Tax Act and that he had exercised the option of refusing to receive the amount claimed from him.

(5) (a) of the Act, only hasty statements were made by his lawyers without even safeguarding the same with the evidence.

"There is also no evidence to support the appellant's claim that the BoT approved a loss of the appellant's loan. For example, in the additional call record, the caller claims to have received approval letters from (BoT) that are not on file, "they noted.

It is stated that the respondent was assessed by the respondent notifies an assessment to pay the income tax of 4,749,673,077 / – for the years 2005, 2006 and 2007. Responding with the assessment, the appellant relied on subsection 12 (1) of the Tax Appeals Act to oppose it. the respondent was wrong to consider its impairment provisions as not being tax deductible, according to the appellant, because of the narrow interpretation of section 25 of the Act. the Income Tax Act by the respondent.

the respondent is held to the assessment, which prompted the appellant to file three appeals before the Dar es Salaam Tax Appeals Board and , later, before the Tax Revenue Appeals Tribunal, where he lost the calls.