TANZANIAN GOVERNMENT GIVES AMNESTY FOR PENALTIES AND INTEREST ON OVERDUE TAXES
In an effort to motivate the voluntary payment of outstanding tax liabilities in the 2018/ 2019 financial year, the Commissioner General of Tanzania has been empowered to waive up to 100% of the accumulated penalties and interest liabilities of taxpayers on their overdue taxes.
A taxpayer who successfully applies will receive amnesty, provided that all remaining principal taxes are paid by 30 June 2019. Taxpayers can apply to make these payments in installments.
The amnesty is applicable to all legislative taxes collected by the Tanzania Revenue Authority (TRA), excluding (1) customs and excise duties, and (2) any other revenue that the TRA is mandated to collect on behalf of Local Government, agencies and other governmental departments (such as Gaming Tax, Property Tax and advertising fees).
According to the TRA publication Amnesty on Accumulated Interest and Penalties on Tax Arrears published on 11 July 2018, taxpayers who are eligible to apply must:
- have submitted returns for which taxes are either in whole or partially unpaid; or
- have not submitted returns for which taxes are either in whole or partially unpaid; or
- be a business that has been operating without having finalised its registration with the TRA, i.e. businesses that have not acquired a Tax Identification Number (TIN) or Value-Added Tax Registration Number (VRN); or
- have lodged an objection with the Commissioner General that has not yet reached the Tax Appeals Board; or
- have lodged an objection with the Tax Appeals Board that remains undecided; or
- possess written confirmation that it must pay principal tax, excluding penalties and interest, within the 2018/ 2019 financial year (i.e. by latest
30 June 2019).
Taxpayers wishing to apply for this amnesty must do so within six months of the start of the 2018/ 2019 financial year. The application consists of submitting a duly completed application form, which must be accompanied by a complete and detailed account of the tax liability of the applicant, as well as confirmation that the applicant is willing to pay the principal tax amounts within the 2018/ 2019 financial year.
In addition, if the applicant submitted any objections before the application for amnesty, it must confirm firstly that the assessed taxes are in fact correct and secondly that it will cease all proceedings in connection with the objection.
Taxpayers are only permitted to apply for amnesty within the prescribed 12-month period and any application relying on falsified information will be disqualified from consideration. Amnesty will only be granted once the conditions of the application have been met and once an agreement, stipulating the total taxes owed by the taxpayer and the interest and penalties waived, has been signed by the taxpayer.
As taxpayers would need to surrender their rights in terms of objections they may have lodged, they are urged to seek tax advice as to whether it is appropriate to apply for this amnesty or not.